Present: Fisher C.J. and Akbar J.  1930

DORASAMY v. FERNANDO.

238-D. C. (Inty.) Kandy, 35,005.

Insolvency-Deed in fraud of creditors-Action to set aside brought by proved creditor-Insolvency Ordinance, ss. 51, 71, and 109.

An action may be brought, during insolvency proceedings, by a proved creditor to set aside a transfer made by the insolvent in .-:,- fraud of creditors.

APPEAL from order of the District Judge of Kandy. The facts appear from the judgment.

Weerasooria, for first defendant, appellant.

Navaratnam, for plaintiff respondent..

February 28, 1930. FISHER C.J.-

In this case the plaintiff (the respondent) is a creditor of one de Silva, the first defendant, the appellant, is also a creditor of de Silva, and the second defendant is de Silva's assignee in insolvency. The plaintiff prayed for a declaration that a transfer by de Silva in favour of the first defendant be declared null and void and that the land which was the subject-matter of the transfer should be vested in the assignee and be declared liable to be sold to meet the claims of the creditors of the insolvent. The date of the transfer is December

11, 1926, and on December 16, 1926, the first defendant filed a petition for the sequestration of the estate of William de Silva in Consequence of which the latter was declared insolvent. Both the appellant and the plaintiff-respondent proved their debts in the insolvency. On March 18, 1927, the present action was brought. The insolvent subsequently received a certificate, the issue of which was suspended for a period of one year which had expired prior to the hearing of the action. The only point which has so far been considered by the learned Judge, and the only point for our decision on this appeal, is embodied in the following issue: " Can the plaintiff maintain this action inasmuch as the insolvency proceedings of William de Silva were pending at the date of the institution and an assignee having been appointed in such proceedings ? ''

The question whether the decision of the learned Judge, which on the face of it leaves the action still to be tried, is one from which an appeal lies was not argued before us, and I do not think it is necessary to express an opinion on the point.

Clearly the plaintiff has an interest in seeing that all assets which are available or can be made available for creditors should be got in, and the transfer which is impeached is alleged to have been made with the intention and to have had the effect of putting the property in question out of the reach of the general body of creditors. It would certainly seem that the plaintiff has a prima facie right to bring this action, and the question is whether there is anything in the Insolvency Ordinance which precludes him from exercising it. It was said that the plaintiff's cause of action, if any, vested in the assignee on his appointment by virtue of section 71 of the Insolvency Ordinance. In my opinion, an action against a transferee to set aside the transfer on the ground that the transferor acted fraudulently is not an action which can be brought by the transferor himself, and therefore could not vest in the assignee under the section referred to.

It was further contended for the appellant that the case is covered by section 109 of the Insolvency Ordinance. I do not think that contention can prevail. That section contemplates a claim which can be expressed or assessed in money, and that cannot be said of the present action.

In my opinion, the reasoning set out by the learned District Judge in his judgment entirely justifies the conclusion at which he arrives.

The appeal is dismissed with costs. AKBAR ,J.-

The plaintiff-respondent sued the first defendant-appellant to have a deed of sale executed by one William de Silva set aside on the ground that it was executed in fraud of creditors. This William de

Silva, it appears, had been declared insolvent and