The court clarified that a claim for genuine consideration exists even in fraudulent transfers, and a dismissal of such claims without examination is impermissible.

JUDGMENT

It is against dismissal of a claim petition, the owner of the property came up in appeal. Claim petition was preferred under Order XXI Rule 58 C.P.C. during the pendency of the suit as against 'attachment before judgment' over the property under Order XXXVIII Rule 5 C.P.C..

2. It is an admitted case that even prior to the 'attachment before judgment', the property was transferred by the defendant to the claimant almost seven months prior to the order of 'attachment before judgment'. The questions came up for consideration before the trial court are whether the document of transfer, Ext.A1 would stand hit by Section 53 of the Transfer of Property Act and whether the appellant/ claimant has got right, title and interest over the property attached. Interestingly, the extent of jurisdiction that can be exercised under Rule 58 of Order XXI C.P.C. was not taken up or considered by the trial court.

3. The very case advanced by the plaintiff is that the document of transfer – Ext.A1, which is the subject of 'attachment before judgment', though executed seven months prior to the attachment, being a fraudulent transfer intended to defeat and delay the creditors of the defendant, would stand voidable at the option of any of the creditors by virtue of Section 53 of the Transfer of Property Act . A Full Bench of this Court in Verizon Builders and Developers Ltd. v. Jyothi Susan John ( 2019 (1) KLT 100 (F.B.) ) had laid down the legal position that it is permissible under Order XXI Rule 58 C.P.C. to go into the application of of the and to adjudicate the dispute either by way of a claim petition or objection to the attachment already effected in the trial stage or at the execution stage.

4. The claimant purchaser has no blood relation or any other relation with the seller defendant except the fact that both of them belonged to the very same community. The transfer was effected by way of an assignment deed (sale deed) enumerating the consideration at Rs.35 lakhs. According to the plaintiff, the said document would stand vitiated being a fraudulent transfer intended to defeat the creditors of the defendant and it is a collusive one. It was also submitted that there is no consideration for the said document and the consideration stated in the document is fictitious. In the document, an amount of Rs.23,93,000/- (Rupees Twenty Three Lakhs Ninety Three Thousand only) was adjusted towards sale consideration on the assertion that it is the outstanding amount due to the claimant/purchaser from the defendant. Out of the balance sale consideration, an amount of Rs.8,57,000/- was reserved with the claimant/purchaser for discharging the bank liability over the property, thereby an amount of Rs.32,50,000/- was adjusted out of the total sale consideration of Rs.35 lakhs and a cheque for the balance sale consideration, which comes to Rs.2,50,000/- was given in lieu of cash. All these were made mentioned in the document. But no evidence was adduced to show even the encashment of the cheque for Rs.2,50,000/-. There is also no evidence for the outstanding amount alleged by the claimant/purchaser made mentioned in the document, which comes to Rs.23,93,000/- (Rupees Twenty Three Lakhs Ninety Three Thousand only). In fact, no amount was paid in cash or through transfer of account or through any bank account as on the date of alleged sale or just prior to it. There is only a claim and assertion in the document with respect to the outstanding amount to the purchaser/claimant fr