Transfers made with intent to defeat creditors are voidable under Section 53 of the Transfer of Property Act, and the burden of proof lies on the claimant to demonstrate bona fide purchase.

Sathish Ninan, J. The claim petition filed by the petitioners under Order XXI Rule 58 of the Code of Civil Procedure was allowed in so far as it related to the claim of the 2nd claimant alone. Challenging that part of the order which declined relief to the 1st claimant, they are in appeal.

2.Respondents 1 and 2 in the appeal are the plaintiff and the defendant respectively, in the suit. The claim petitioners-appellants and the defendant are siblings.

3.Since the appeal relates only to the claim of the first claimant, the facts relating to the same alone are being adverted to.

4.The suit for money (Rupess 40 lakhs) was filed by the plaintiff on 18.07.2013. He secured an attachment before judgment over an extent of 14.12 Ares of property. The suit was decreed exparte on 22.09.2015. Though a claim petition was filed thereafter, it was later withdrawn and the claim petition was filed on 21.12.2016.

5.The first claimant claims title over 6.59 ares from the larger extent of property under attachment. An extent of 14.12 Ares of property belonged to one Vasudevan Pillai, the father of the claimants and the defendant. Vasudevan Pillai had executed Ext.A1 Will dated 07.07.2005. As per Ext.A1 an extent of 3.35 ares +

3.24 ares = 6.59 ares was bequeathed in favour of the defendant as included in item No.1 therein. An extent of

3.35 ares was bequeathed in favour of the claimant No.2, and an extent of 6.95 ares included in item No.3 was bequeathed in favour of claimant No.1. A life interest was reserved in Ext.A1 Will in favour of his wife Aananthabhai Amma. Vasudevan Pilla died on 23.10.2007 and title was vested with the respective legatees.

6.On 25.03.2009, the defendant borrowed an amount of Rs.40 lakhs from the plaintiff. On 27.03.2009 and 28.04.2009, the defendant executed Exts.A2 and A3 Sale Deeds in favour of his sister the first claimant, transferring the entire 6.59 Ares of property bequeathed to him under Ext.A1. Claiming title under Exts.A2 and A3, the claim petition under Order XXI Rule 58 was filed seeking lifting of the attachment.

7.The plaintiff/first respondent herein filed an objection contending that the entire proceedings are collusive, that the alienations relied on are after the availing of loan by the defendant. It was also contended that transfer of property if any effected is void and in violation of the provisions of the Transfer of Property Act .

8.The execution court found that the properties belonging to the second claimant are not liable for attachment, as she obtained title under Ext.A1 Will. As regards claimant No.1, it was found that Exts.A2 and A3 conveyances in her favour by the defendant are transfers in fraud of creditors under Section 53 of the Transfer of Property Act .

9.We have heard Sri.M.Narendrakumar, the learned counsel for the appellants-claim petitioners and Sri.P.B.Krishnan, the learned Senior Counsel for the first respondent-plaintiff.

10.The points that arise for determination are, (i) Is their lack of pleadings of “fraudulent transfer”, resulting in prejudice to the appellant ? (ii) Does the finding of the execution court that Exts.A2 and A3 are transfers in fraud of creditors warrant interference ? (iii) Is the evidence on record sufficient enough to find that the first claimant is a bonafide purchaser for value ?

11.The learned counsel for the appellants contend that a plea under Section 53 of the Transfer of Property Act was never raised before the execution court in the counter filed by the decree holder-plaintiff. Till the evidence was over, the court did not raise any issues or point for trial. The appellants-claimants are seriously prejudiced thereby since they lost the opportunity to raise a plea of bona fide purchaser for value. The plea raised could at best be understood only as one of ‘sham’ transaction, it is argued.

12.A reading of the objections filed by the plaintiff-decree holder to the claim petition indicates that, at paragraphs 5 and 7 therein it has been contended that,