The judgment established the principle that when fraud by the transferor is proven, the burden shifts to the transferee to prove good faith and lack of involvement in the transferor's fraudulent intent.

( 1 ) THESE four appeals are directed against the common judgment and decree dated September 25, 1974 made by the civil Judge at Mandya in O. S. Nos. 21 of 1969 and 62 of 1970. Both the suits were by creditors, apparently under Section 53 of the transfer OF PROPERTY ACT, 1882. The creditors have impeached the bona fides of transfer of plaint 'a', 'b' 'c' schedule properties effected by their debtor-Channiah.

( 2 ) TO avoid confusion, we consider it would be convenient to refer to the parties by their array in O. S. No. 21 of 1969. Channiah-defendant-1 is the father of defendants 4 to 7. He was an 'a' class P. W. D. Contractor and the owner of 'a', 'b' 'c' schedule properties. Defendant-3 is the brother of Channiah, but taken in adoption by his uncle. Defendant-2 is a businessman with whom channiah used to buy his requirements. 'a' schedule consists of a house at mandya Town; 'b' schedule consists of six items out of which 5 are agricultural lands and one is a village house and 'c' schedule also consists of 5 items out of which one is again a village house and the rest are agricultural lands.

( 3 ) ON Mach 28, 1966, Channiah sold under Ex. D-1 the 'a' schedule property for Rs. 60,000/- in favour of defendant-2 on July 22, 1966, he sold 'b' schedule properties to defendant-3 for Rs. 10,000/- under Ex. D-2. On July 25, 1966, he sold 'c' schedule properties to defendants 4 to 7 for Rs. 5,000/- under Ex. D-20. In 1964 and 65, Channiah continually had taken few loans from plaintiffs. He could not or did not repay those loans. In 1967 and 68, plaintiffs filed suits and obtained decrees to recover their dues. On coming to know of the alienations of 'a' 'b' 'c' schedule properties made by channiah, plaintiffs instituted O. S. No. 21 of 1969 on March 26, 1969 and another set of creditors instituted O. S. No. 62 of 1970 on October 12, 1970, for a declaration that the alienations in favour of the defendants were intended to defraud the creditors and as such they were not binding on them or other credi'tors.

( 4 ) BROADLY stated, the common contention taken by the defendants - alinees in their written statements was that the sale deeds in their favour were genuine; that they were not parties to the design, if any, of Channiah to defraud his creditors and, at any rate, they are bona fide purchasers for value in good faith. Channiah although filed his written statement justifying the alienations of 'a' 'b' 'c' schedule properties did not participate in the proceedings.

( 5 ) PLAINTIFFS in support of their case have examined as many as six witnesses. The first plaintiff has been examined as p. W-1; third plaintiff as P W-2; fourth plaintiff as P. W-3 and second plaintiff as P. W-4. P. Ws-5 and 6 are two other creditors. They have also produced documents Exts. P-1 to P-16. On the side of the defendants, defendant-2 has been examined as D. W-8; defendant-3 as D. W-4 and Kempamma, guardian of minor defendants 5 to 7 has been examined as D. W-7. In all, for the defendants there are 8 witnesses besides documents got marked as Exts. D-1 to D-48.

( 6 ) THE trial Court on a consideration of all the oral and documentary evidence produced by the parties has written a lengthy judgment, the conclusions may be summarised as follows : (i) The considerations paid under exts D-1, D-2 and D-20 were not proved to be inadequate ; (ii) Defendant 1 has paid full consideration of Rs 60,000/- but there was no good faith on his part. He has not made reasonable enquiries as to why Channiah was selling his house. The house sold to defendant-1 was, no doubt, subjected to two prior mortgages, but there was no pressure by the mortgagees to redeem the mortgages. Defendant-2 has helped Channiah to convert his property into cash with an intent to avoid the demands of his creditors. Since defendant-2 has discharged the two prior mortgages on the house property-one to Ramakrishna Iyer and another to Vishalakshiamma-, he should be subrogated to the extent