Veeraswami, C.J.- Defendants 1 and 2 are the appellants. They purchased the suit property on 15th December, 1953 from the legal representatives of one Krishna-swami Pathar. The plaintiff in execution of a decree obtained against Krishnaswami Pathar purchased the very property on 8 th February, 1960. The defendants having obstructed and succeeded, a suit was brought to set aside the summary order. Both the Courts below have concurred in finding that the sale in favour of the defendants was a fraudulent preference within the meaning of section 53 of the Transfer of Property Act. In coming to that decision they were largely influenced by Abdul Majid Lebhai v. Papathi Ammal1. They understood the decision as laying down the proposition that the test of fraudulent preference was to see whether the debtor retained with him any amount, however, small, for his benefit, so that to that extent the creditors stood to be defeated. When the second appeal came before Alagiriswami, J., in the first instance, he too perhaps thought that that was the effect of the decision and, on that view, he considered that the decision must be reconsidered. He, therefore, referred the matter to a Division Bench.

2. It seems to us that the Courts below as well as Alagiriswami, J. were not entirely correct, if we may say so, in understanding Abdul Majid Lebbai v. Papathi Ammal1, in that way. The judgment in that case does not show that however small the benefit may be that was retained by the debtor, that would in itself be proof of fraud. It would be obvious from the judgment that what influenced the decision in that case was the fact that the vendor had been arrested, but on payment of a small sum was released and the execution petition was pending. The Court thought that the fact that the sale deed was executed after his arrest and before the adjourned date of the execution petition clearly suggested that it was executed with a deliberate intent to frustrate the appellant in that case and defeat and delay the creditors of the second respondent in that case. That was the main reason the sale was held to be a fraudulent preference. But, in addition to that fact reliance was also placed on retention with the debtor of a sum of Rs. 78 out of the sale consideration of Rs. 600. The intention of Abdul Majid Lehbai v. Papathi Ammal1was not to lay down a proposition that, however small the benefit retained by the debtor out of the sale consideration might be it would be sufficient by itself to hold the transaction to be a fraudulent preference. As a matter of fact, Errachi Reddiar v. Vellayya Reddiar2, made a correct approach to Abdul Majid Lehbai v. Papathi Ammal1. Whether any transaction is a fraudulent preference will depend upon the facts in each case.

3. Where a debtor has several creditors and some property and if he transfers that property to one of the creditors without any further circumstances appearing that may be a preference, but it cannot be said to be a fraudulent preference. It has been repeatedly held that it is not improper for a debtor to prefer his creditor among the many in order to discharge his debt by transfer of property. There should be something more than mere preference and the facts must establish that the preference is a fraudulent one. In Mushar Sahu v. Lala Hakimlal3, the Privy Council observed:

"The transfer which defeats or delays creditors is not an instrument which prefers one creditor to another, but an instrument which removes property from the creditors for the benefit of the debtor. The debtor must not retain a benefit for himself. He may pay one creditor, and leave another unpaid."

4. That is how in Abdul Majid Lebhai v. Papathi Ammal1, the reference was made to the retention of a benefit by the debtor. The emphasis in that case was not that however small the benefit may be, it would be sufficient to hold the transaction to be a fraudulent preference. In the Privy Council case it was found that the transfer made was for adequate

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