PALANISWAMY J.

The only question that arises for determination in this appeal filed by defendants Nos. 2 to 13 is whether the sales of the suit properties by the first defendant, which is a public limited company, in favour of the second defendant-firm, of which the partners are defendants Nos. 3 to 13, were effected with intent to defeat or delay the Union of India and other creditors of the first defendant-company. The Union of India, represented by the Commissioner of Income-tax, Madras, laid the suit under section 53 of the Transfer of Property Act on its own behalf and on behalf of other creditors, if any, of the first defendant-company for a declaration that the sale deed, exhibit B-1, dated February 27, 1961, in respect of the plaint mentioned immovable properties and the sale of the movables by the first defendant-company in favour of the second defendant-firm were invalid and not operative and not binding on the plaintiff and other creditors of the first defendant-company as having been made to defeat the just claims of the plaintiff and other creditors. It was also prayed that the said transfers may be declared not binding upon the creditors of the first defendant-company and that the plaintiff was entitled to recover arrears of income-tax due from the first defendant-company from out of the plaint schedule properties. The suit has been decreed by the trial court is prayed for, and hence this appeal The first defendant-company was incorporated in the year 1946 with the object of carrying on the business of seed crushers, oil extractors, etc. The first defendant-company did not make any profit in the business. In the year 1952, the first defendant-company entered into a partnership with the second defendant-firm, called Rajeswari & Co., arinstarted a factory called Rajapalayam Cotton Pressing Factory, in which the first defendant company had 7 out of 16 shares. The partnership was re-constituted in the year 1954. Even as per the re-constituted firm, the first defendant-company continued to have 7 out of 16 shares. The first defendant-company, in its own activities, incurred loss, but the partnership earned profits, in which the first defendant-company got its share. The first defendant company claimed set-off of the profits so earned against the loss incurred in its own business. One Gnanaprakasam, an Income-tax Officer of Virudhunagar, who was on the eve of his retirement, allowed the set-off. But his successor, Thirunavukarasu, who was examined as P.W.1 in this case, found that the set-off was improper and ought not to have been allowed, his view being that, on account of the loss incurred by the first defendant-company, it ceased to carry on its business, that the loss automatically lapsed and that, therefore, there was no scope for carrying forward the loss and setting off the loss against the profits earned by the first defendant-company in a different venture. On this basis the matter was reopened under section 34 of the Income-tax Act, and a sum ofRs. 28, 240.96 was levied as income-tax by order dated October 4, 1961, by reopening the assessments of the years 1956-57 to 1959-60. But even before this order was passed, the first defendant-company sold away all its immovable properties in favour of the second defendant under exhibit B-1 on February 27, 1961, for Rs. 1, 30, 000 and also sold all its movable properties and goodwill in favour of the second defendant-firm for Rs. 40, 000 on

March 2, 1961. It is in these circumstances that this suit was instituted for the reliefs indicated above

Though the suit is purported to be one under section 53 of the Transfer of Property Act and though the plaintiffs, Union of India, was given permission to sue on its behalf and on behalf of the creditors of the first defendant-company, the plaint allegations do not make out necessary averments to bring the case within the scope of section 53 of the Transfer of Property Act. In paragraph 10, it is alleged that the sale