Transfer made by insolvent liable to be impugned as in fraud.

The Official Assignee, Madras, has taken out this application by Judge’s Summons under section 7 of the Presidency Towns Insolvency Act (hereinafter referred to as the Act), to declare that the site at No. 3/2-A, College Road, Nungambakkam, Madras, and the building put up thereon are the sole and exclusive property of Dinshaw K. Tehrani, the second respondent insolvent, that the deed of release dated 27th August, 1955, executed by the insolvent in favour of his wife, the first respondent, is sham and nominal and was not intended to confer any title upon the first respondent and that the entire property vests in the Official Assignee and is available for the benefit of the creditors. In the alternative, the Official Assignee has prayed that if it is considered necessary the deed of release may be set aside as fraudulent as against the creditors made with the intention of defeating and delaying the creditors. The Official Assignee has also prayed for delivery of possession of the property. The second respondent, who was engaged in the business of producing cinema films, was adjudged insolvent on his own application on 2nd December, 1964. He admitted debts to the tune of Rs. 3,20,343-58. In the petition to adjudge him insolvent he stated that the property in question was purchased in the joint names of himself and his wife, that he had no beneficial interest therein, the same having been -exclusively acquired out of his wife’s own funds and that his name was included only nominally. The site originally belonged to one Md. Shamsuddin Sahib. He conveyed it under the sale deed Exhibit P-1 dated 5th July, 1948 for Rs. 21,595-11-8 in favour of both the respondents. The endorsement made by the Sub-Registrar upon that registered sale deed says that on behalf of the two respondents one Purushotham handed over a crossed cheque drawn on the Chartered Bank of India in favour of the vendor for Rs. 21,595-11-8. That cheque had been issued by late Advocate Rangachari. After purchasing the site, a superstructure was put up on it. The two respondents jointly executed a simple mortgage deed on 12th July, 1952, in favour of the Midland Insurance Company for a sum of Rs. 25,000 for the purpose of the construction. On 27th August, 1955, the second respondent insolvent executed the release deed Exhibit P-3 in favour of his wife, the first respondent, reciting inter alia that the beneficial interest in the property exclusively belonged to the first respondent, that it was her money that was used for the purchase of the land, that the name of the husband insolvent was included in the sale deed for the purpose of convenience merely with a view to obviate the necessity of the personal attendance of the wife in interviewing the public authorities for mutation of names in the revenue registers, securing actual possession of the plot, effectuating sub-division, etc. that it was not intended that the insolvent should have any manner of right, title or interest in the site, that the first respondent wife had applied and received the necessary quota for purchase of steel requirements for the construction, that the first respondent was dealing with the property as her own that in view of the inconvenience which the wife was experiencing she pressed her husband to execute a proper deed of release and relinquishment and that in order to dispel the cloud of doubt upon the exclusive title of the wife, the husband executed the deed of release. After this release, the property came to stand solely in the name of the wife, the first respondent.

2. The case of the Official Assignee is that the insolvent had trouble with the income-tax authorities for his unaccounted wealth, that the entire consideration for the purchase of the plot was found only by the insolvent, that the insolvent’s wife had no wherewithal to purchase the property, that with a view to put off the scrutiny by the income-tax authorities, the insolvent included his wife’s name in the purchase o