A fraudulent conveyance is a transfer of property made with the intent to hinder, delay, or defraud creditors or other persons having an interest in the property.

JUDGMENT: This second appeal is preferred against the decree and judgment of the learned District Judge of North Accot in A. S. No. 183 of 1954, modifying the decree and judgment of the learned District Munsiff of Ami in O. S. No. 159 of 1953.

2. The facts are :-Annamalai Mudaliar, the second defendant, had become indebted to his own sister Muniammal, the first defendant, on a promissory note dated 16-8-1949. The brother and sister have not been getting on well. On the foot of that promissory note the first defendant filed O. S. No. 262 of 1951 against the second defendant and obtained a decree on 20-9-1951. It was an instalment decree. The first instalment was payable on 15-10-1951. The first defendant was taking steps to attach the only property belonging to the judgment-debtor second defendant viz., a soda-water manufacturing shop run under the name and style of "Baby Soda Factory" in Arni Bazaar. There was obstruction by the judgment-debtor more than once. The attachment was duly effected on 8-4-1952.

3. The plaintiff Thyagaraja Mudaliar who is a Javuli merchant of the locality and belonging to the same community as the defendants, came forward with a claim petition purporting to have purchased the Baby Soda Factory under a sale deed Ex. A-1 said to have been executed by the first (second?) defendant on 1-10-1951 and registered within a week thereafter.

The items of consideration for this sale deed are stated to be Rs. 155 due on account of the credit purchase of piecegoods by the first (second?) defendant in the Javuli shop of the plaintiff in connection with the marriage of his daughters, evidenced by Ex. A-2, and a sum of Rs. 345 said to have been paid in cash to the vendor, totalling Rs. 500. The debt of Rs. 155 seems to be a true one.

4. This claim petition was dismissed by the learned District Munsif of Arni Mr. P. Paramasiva Mudaliar. Thereafter the plaintiff filed the suit out of which this second appeal arises for vacating the said claim order.

5. The trial Munsif dismissed the suit on the ground that though the second defendant owed Rs. 155 to the plaintiff under Ex. A-2, the payment of Rs. 345 in cash is a fictitious amount made up for the purpose of taking a fraudulent conveyance from the first (second?) defendant in collusion, in order to defraud the first defendant from realizing the fruits of her decree. On appeal by the defeated plaintiff the learned District Judge came to the following conclusion :

"It is certainly true that, that in an action of this character, the burden lies upon the claim petitioner (appellant) to prove that the claim order was liable to be set aside. But it seems to me that though the sale as such might not be binding on the decree-holder............... because the movables are alleged to be worth far more than the sum of Rs. 500 paid by the appellant under Ex. A-1 and also because the evidence tends to show that the sale was not given effect to, in the sense that the son of the judgment-debtor still appears to be in possession and control of the machinery and the business, nevertheless this is a case in which it is abundantly clear that the appellant parted with the consideration Rs. 500 in order to obtain some kind of charge or security, the appellant being a prior creditor of the judgment-debtor in respect of an amount of Rs. 155. Under those circumstances, the question is whether, as stressed by the learned Counsel for the appellant, the appellant is at least not entitled to a charge or lien for Rs. 500 upon the machinery and accessories, the decree-holder................. being at liberty to proceed against the movable properties, subject to this charge."

The learned District Judge then persuaded himself that he could allow the appeal to the limited extent of holding that the appellant has at least established a right to a lien or charge over the property conveyed under Ex. A-1 to the extent of Rs. 500, though the property probably being worth double this amount, the title of t