Back
High Court Of Calcutta
Padma Khastgir
UNION OF INDIA (UOI) - Appellant
Versus
RAM PEARY DEBI KANORIA - Respondent
Suit 851 Of 1961
Decided On : 09/19/1983
TRANSFER OF PROPERTY ACT - VOIDABLE TRANSFER - SECTION 53 - FRAUDULENT CONVEYANCE - SINGLE CREDITOR - MAINTAINABILITY OF SUIT - NOTICE UNDER ORDER 1, RULE 8, CIVIL PROCEDURE CODE - INCOME-TAX ACT, SECTION 281 - APPLICATION.
Fact of the Case:
The Union of India filed a suit for a declaration that two deeds of settlement, both dated 22nd March 1957 and 25th March 1967, were not binding upon the creditors, including the plaintiff, of Smt. Rampeary Debi Kanoria. The original defendant, Ram Peary Debi Kanoria, had executed the deeds of settlement during the pendency of income-tax proceedings against her, transferring a total amount of Rs. 1 lakh to her grandchildren. The plaintiff claimed that the transfers were made with the intent to defeat or delay the creditors, particularly the income-tax department, which had a substantial claim against Ram Peary Debi.
Finding of the Court:
The court found that the transfers were made fraudulently with the intent to defraud the creditors. The court held that Section 53 of the Transfer of Property Act, which provides for the voidability of transfers made with the intent to defeat or delay creditors, is applicable even in cases where there is only a single creditor. The court also held that the plaintiff, as a single creditor, had the right to file a suit under Section 53 of the Transfer of Property Act to set aside the fraudulent transfers.
Issues: 1. Is the suit maintainable as framed? 2. Are the deeds of Settlement dated 22nd March. 1957 and registered on 25th March, 1957 void and not binding upon the plaintiff? 3. To what relief, if any, is the plaintiff entitled?
Ratio Decidendi: The court held that Section 53 of the Transfer of Property Act is applicable even in cases where there is only a single creditor. The court also held that the plaintiff, as a single creditor, had the right to file a suit under Section 53 of the Transfer of Property Act to set aside the fraudulent transfers. The court further held that the provisions of Section 281 of the Income-tax Act, which provides for the voidability of transfers made during the pendency of income-tax proceedings, also applied to the case.
Final Decision: The court passed a decree in terms of prayers (b) and (f) of the plaint, declaring the two deeds of settlement to be void and not binding upon the creditors, including the plaintiff.
( 1 ) UNION of India filed a suit for a declaration that the two deeds of settlement both dated 22nd of March. 1957 and 25th of March, 1967 were not binding upon the creditors including the plaintiff of Smt. Rampeary Debi Kanoria.
( 2 ) THE original defendant Rant Peary Debi Karioria was the widow of Ram Ballav Kanoria. For the purpose of income-tax she was assessed at Benaras previously. But since the assessment year 1952-53 she waa being assessed at Calcutta. The assessment for the year 1952-53 was completed on or about 29th March, 1957 and a sum of Rs. 1,90,000/- was included in the said assessment as undisclosed and secreted income. There were outstanding dues towards income-tax from the said Ram Peary Debi Kanoria. Full particulars had been given in para 2 of the plaint. The said Ram Peary Debi Kanoria failed and neglected to pay the said sum assessed against her.
( 3 ) DURING the course of assessment for the year 1951-52 she collusively with the intent to delay or defeat the creditors including the plaintiff executed two deeds of trust purporting thereby to convey two different sums of Rs. 50,000/- to the defendant Hariram Dhurka and Shyam Sundar Dhurka as trustees under the said deeds for the benefit of the grand son and grand daughter of the said Ram Peary Debi Kanoria who were beneficiaries under as said deed of settlement. There was no consideration whatsoever for such transfer and the said settlement were entered into safely for the purpose of defeating the claim of the creditors. The said Ram Peary Debi Kanoria died. As a result her death was recorded and the heirs and legal representatives of the said defendant had been substituted and brought on the record. As such legal heirs and representatives they are under an obligation to discharge the income-tax dues of the original defendant Ram Peary Debi Kanoria. The said sons had been directed to hand over the said sum to the beneficiaries Dinesh Kumar Kanoria and Urmila Debi Kanoria, the defendants Nos. 4 and 5 upon attainment of the age of majority. Inasmuch as the defendants were interested in denying the right, title and interest of the plaintiff the instant suit was filed.
( 4 ) IN the written statement it was stated that an appeal was preferred from the assessment year 1952-53 on 10th April, 1957 and the said appeal was disposed of on June 28. 1958. A sum of Rs. 4,90,080/- according to me defendants was wrongly and illegally assessed as purported to be undisclosed or secret income of the said Ram Peary Debi Kanoria as such Ram Peary Debi was under no obligation to pay the same to the plaintiff. According to the defendants at the time of the execution of the said two deeds of trust the original defendant No. 1 had no creditors as a result the said two deeds of settlement executed bona fide with the intention of providing for the grand children of the original defendant No. 1. Under the circumstances the suit filed by the plaintiff was vexatious, and harassing and as a result should be dismissed with cost. The following issues were raised and settled at the trial : --ISSUES 1. Is the suit maintainable as framed? 2. Are the deeds of Settlement dated 22nd March. 1957 and registered on 25th March, 1957 void and not binding upon the plaintiff? 3. To what relief, if any, is the plaintiff entitled ?
( 5 ) THE plaintiff gave evidence through Barun Kumar Chakraborty, a tax assistant in the Income-tax department who proved with the help of the demand register the taxes due and payable by Smt. Ram Peary Debi Kanoria.
( 6 ) AMAR Nath Ghosal proved with the help of the demand register being Ext. 'f' which was an extract from the demand collection register.
( 7 ) TAPAN Kumar Chakraborty. the Income-tax Officer gave evidence that Ram Peary Debi was an assessee of his ward and from the demand collection register he gave evidence that demands were made in respect of the outstanding dues from Ram Peary Debi Kanoria Such demands were outstanding from 1945-46
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
