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2004 Supreme(Bom) 455

BOMBAY HIGH COURT AT PANAJI, GOA
N.A. BRITTO, J.
Shri Carlota Fernandes - Appellant
Versus
Mr. Mukund Shamba Naik & Ors. - Respondents
First Appeal No. 11 of 1997
Decided on : 23rd March, 2004

Advocates Appeared:
Mr. Sudin Usgaonkar, Advocate, for the appellant;
Mr. J.P. Mulgaonkar, Advocate, for the respondents No. 1, 2, 4, 5, 6, 7, 8, 9 and 10.

A single creditor could file a suit under Section 53 of the Transfer of Property Act, 1882 to set aside a fraudulent transfer. The finding as to the fraudulent nature of a transaction cannot be based on suspicion and conjectures but must be inferred from the circumstances proved in a given case.

Headnote:

Gift Deed - Fraudulent Transfer - Transfer of Property Act, 1882, Section 53

Fact of the Case:

The case involved a dispute over a property known as 'Gharbhat' and a Gift Deed dated 8.11.1990 made by Defendants No. 2 and 3 in favor of plaintiffs No.9 and 10, which was alleged to be made with the intent to defeat or delay the creditors of the defendants No. 2 and 3 as contemplated by Section 53 of the Transfer of Property Act, 1882.

Finding of the Court:

The court found that the Gift Deed was made with the intent to defeat the decree which defendant No. 1 was likely to obtain in the said Civil Suit against defendant No. 2. The court concluded that the Gift Deed was fraudulent and ordered its cancellation.

Issues: The main issue was whether the Gift Deed was made with the intent to defeat or delay the creditors of the defendants No. 2 and 3 as contemplated by Section 53 of the Transfer of Property Act, 1882.

Ratio Decidendi: The court held that a single creditor could file a suit under Section 53 of the Transfer of Property Act, 1882 to set aside a fraudulent transfer. It also emphasized that the finding as to the fraudulent nature of a transaction cannot be based on suspicion and conjectures but must be inferred from the circumstances proved in a given case.

Final Decision: The appeal was allowed, the Judgment and Decree of the learned Civil Judge, Senior Division was quashed and set aside, and the suit filed by the plaintiffs was dismissed. The counter-claim filed by the defendant No. 1 was decreed with costs, and the registration of the Gift Deed was ordered to be cancelled by the Sub-Registrar of Bardez.

JUDGMENT

N.A. Britto, J.––This appeal is filed by the defendant No.1 in Special Civil Suit No. 156/1991/A against the Judgment dated 30.9.1996 of the learned Civil Judge Senior Division, Mapusa by which the said learned Civil Judge Senior Division dismissed the counter-claim filed by the defendant No. 1 and decreed the Suit filed by the Plaintiffs.

2. Some facts are required to be stated to dispose of the present Appeal and for that purpose the parties hereto shall be referred to by their names as they appear in the cause title of the said Civil Suit.

3. The plaintiffs Nos. 1, 3, 5, and 7 along with the defendant No. 2 in the said Civil Suit were brothers who purchased a property known as "Gharbhat" bearing Survey No. 110/2 by Sale Deed dated 8.11.1990 from one Maria Belmira Lourdes Alda de Rocha and others.

4. The defendant No. 1 as plaintiff filed Special Civil Suit No. 2/88/A for recovery of a loan given to defendant No.2 in the sum of Rs. 85,075.20 and the said Suit came to be decreed by Judgment dated 13.11.1990 of the learned Civil Judge Senior Division, Mapusa in the said sum of Rs. 85,075.20 with interest at the rate of 10% per annum.

5. The defendant No. 1 applied for execution of the said Decree in the said Special Civil Suit No. 2/88/A and in the said execution sought for attachment of the share of the said defendant No.2 in the said property "Gharbhat" and the learned Civil Judge Senior Division, by his Order dated 10.2.1991 ordered the said attachment.

6. In the meantime the defendant No. 2 along with his wife the defendant No.3, just five days prior to the said Judgment in Special Civil Suit No. 2/88/A by Gift Deed dated 8.11.1990 gifted in favour of plaintiff No.9 Pramod, the brother-in-law of the said defendant No. 2, his 1/5th share in the said property "Gharbhat", and, as recited in the said Deed of Gift the said Gift was made by the said defendant No.2 as donor in favour of the said plaintiff No.9, the donee, out of love and affection.

7. The case of the plaintiffs was that since the time of purchase of the said property "Gharbhat", the plaintiffs, except plaintiffs No.9 and 10, were continuously residing in the said residential house situated in the said property and were the co-owners of the same in actual physical possession and enjoyment. The plaintiffs stated that the defendant No. 2 was not keeping mentally well and raised unnecessary quarrels with plaintiffs No. 1 to 8 and for that reason the defendant No. 2 was not residing along with the plaintiffs Nos. 1 to 8 even from the time of purchase of the said property. The plaintiffs further stated that the defendants No. 2 and 3 by the said Gift Deed dated 8.11.1990 transferred their undivided 1/5th share to the said property in favour of the plaintiffs No. 9 and 10 and therefore the Defendants No.2 and 3 did not have any share in the said property.

8. The plaintiffs stated that they came to know from reliable source about the execution proceedings bearing No. 9/91/A filed the defendant No. 1 against defendant No. 2 and after having made inquiries, came to know that the defendant No. 1 had filed Special Civil Suit No. 2/88/A against defendant No.2 for the recovery of the decretal amount and the said Suit was decreed by Judgment and Decree dated 13.11.1990 which was sough to be executed wrongfully in seeking to sell the said property in public auction when the defendant No. 2 did not have any right or title to the said property. The plaintiffs, therefore, filed the Suit for :––(a) Declaration that the Order of attachment of sale in auction of the said property in the said execution proceedings was null and void; and also (b) for permanent injunction to restrain the defendants from interfering in the suit property in any manner whatsoever.

9. The defendants No.2 and 3 did not contest the said suit, but the defendant No. 1 contested the suit by stating that the defendants No.2 and 3 had executed the said Gift Deed with the intent to defeat and delay the recovery of m


























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