V.A.Appuhamy, V. Belin Nona

1952 Present: Choksy A.J.

V. A. APPUHAMY Appellant, and BELIN NONA, Respondent

S. C. 193-C. R. Kegalle, 18,327

Paulian action-Alienation in fraud of creditors-Fraud of purchaser-Requirement of proof thereof.

Where a deed of sale is impeached by a judgment-creditor on the ground that it was executed by the judgment-debtor in fraud of creditors, there must be proof of fraud not only on the part of the judgment-debtor but also on the part of the purchaser, at least where the consideration has been paid.

APPEAL from a judgment of the Court of Requests, Kegalle.

C. R. Gunaratne, with T. B. Dissanayake, for the plaintiff appellant.

H. W. Jayewardene, for the respondent.

Cur. adv. vult.

February 6, 1952. CHOKSY A.J.-

The first defendant obtained a decree against the second defendant in C. R. Kegalle 17,277 on the 1st May, 1947, for a sum of Rs. 149. It appears that the claim in that action had been referred to arbitration. The arbitrator made an award on 12th November, 1946, in favour of the first defendant. This award was made a decree of Court on the 1st May, 1947. In pursuance of that decree the first defendant who was the judgment-creditor issued writ against the defendant in that action (who is the second defendant in the case under appeal). Under the writ he seized the land which the plaintiff had purchased upon deed No. 794 dated 27th March, 1947, which deed was registered on the 8th April, 1947. The plaintiff in the present action claimed the property but his claim was dismissed, presumably on the ground that he did not have possession of the property as the question of possession is the all-important question in a claim inquiry. He therefore instituted this action under 247 of the Civil Procedure Code for a declaration of title to 25/48 share of the land and for a declaration that the said share is not liable to seizure and sale under the writ in C. R. Kegalle 17,277 at the instance of the first defendant to this action, in view of the plaintiff's purchase upon his deed No. 874. Among the questions tried in the action was whether the deed in favour of the plaintiff had been executed in fraud of creditors.

The plaintiff has appealed against the dismissal of his action by the learned Commissioner of Requests. The second defendant (who was the judgment-debtor in the earlier action) gave evidence for the first defendant and with very remarkable readiness owned up that he had sold interests in the land to the plaintiff in order to save the land from seizure. He even went to the extent of stating that he expressly told the plaintiff that he was selling the land for the purpose of preventing its seizure at the instance of the present first defendant. Not being content with this very cleansing confession, the second defendant proceeded to add that the plaintiff had promised to re-transfer this land to the second defendant on the latter re-paying the former the consideration paid for the land. He proceeded to supply the first defendant with further

evidence on factors which would be necessary to enable the first defendant to successfully defeat the claim of the plaintiff by alleging that the land was a valuable planted land worth about Rs. 1,500. He completed the tale of fraud by stating that he did not own any other lands on the date of the execution of the transfer in favour of the plaintiff. The consideration on the face of the deed is said to be Rs. 200. It is not clear from the evidence of the second defendant whether only the interest which he sold, namely, 25/48 shares, is of the extent of three acres and is worth Rs. 1,500 or whether he meant to say that the entire land was three acres in extent and was worth about Rs. 1,500. According to the second defendant only Rs. 100 out of the consideration was paid to him at the time of the execution of the transfer. He also stated that he had sold his shares in some other lands to the plain

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