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Syed Mahamad Maliha Vs. Choudhuri Mahammad Ismail Khan and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1927Cal766
AppellantSyed Mahamad Maliha
RespondentChoudhuri Mahammad Ismail Khan and anr.
Cases ReferredMahammadunissa Begum v. J.C. Bachelor
Excerpt:
- .....sale by the receiver of 3 karsha holdings which were held by shah mafazzal hossain who had been adjudged insolvent, and ordering the exclusion of these properties from the schedule of the insolvent's property. the appellant is the contesting creditor. it appears that the insolvent made an agreement with the appellant for the sale of these very properties (in which the insolvent had an eight annas share) for rs. 2,000 and he took rs. 900 as earnest money. the sale was not completed. the insolvent was unable to pay the appellant but he gave him a handnote. the appellant brought a suit on the handnote and obtained a decree on 9th may 1917. he applied for execution on 8th may 1920.the insolvent put in an objection under section 47 civil p.c. alleging payment of rs. 801 in cash. the.....
Judgment:

Roy, J.

1. This is an appeal from the order of the District Judge of Bakarganj setting aside his previous order directing the sale by the Receiver of 3 Karsha holdings which were held by Shah Mafazzal Hossain who had been adjudged insolvent, and ordering the exclusion of these properties from the schedule of the insolvent's property. The appellant is the contesting creditor. It appears that the insolvent made an agreement with the appellant for the sale of these very properties (in which the insolvent had an eight annas share) for Rs. 2,000 and he took Rs. 900 as earnest money. The sale was not completed. The insolvent was unable to pay the appellant but he gave him a handnote. The appellant brought a suit on the handnote and obtained a decree on 9th May 1917. He applied for execution on 8th May 1920.

The insolvent put in an objection under Section 47 Civil P.C. alleging payment of Rs. 801 in cash. The objection was disallowed on 27th November 1920, and the application for execution also struck off. The appellant filed his second application for execution on 24th January 1922 and the insolvent was arrested on 24th January 1922. On the next day he filed his application for insolvency. He was adjudged an insolvent in due course and a Receiver appointed. Soon after the contesting creditor (the appellant) moved the Receiver in respect of these 3 Karsha properties and asked him to sell the properties.

2. It appears that the insolvent had in the meantime surrendered these holdings to Choudhuri Mahammad Ismail Khan the landlord who is his relative and in whose service he was at one time. The deed purports to have been executed on 3rd April 1920. It was registered on 17th June 1920. It will be noticed that the first application for execution by the appellant was on 8th May 1920, i.e. between these two dates. The Receiver held an enquiry and reported to the Judge that the deed of istafa might be declared to be a benami document. The Judge agreed and directed the Receiver to sell the properties. The insolvent appeared and filed an objection but he was overruled. Thereafter Choudhuri Ismail Khan appeared and the learned Judge held an enquiry and passed the order from which this appeal has been preferred,

3. There is another circumstance which has to be stated. It is this. On 2nd April 1921 a bainapatra was executed by the insolvent and his wife in favour of Ismail Ohoudhuri for sale of nine other properties (which were talukdari tenures) for a sum of Rs. 3000. It was stated that 8 items of these properties belonged to the insolvent but that he had transferred them to his wife in lieu of her dower and the 9th item was purchased by the wife from her own money. The actual conveyance was executed by the insolvent and his wife on 12th June 1920. The istafa in question and the kabala were registered on the same day viz., 17th June 1920. The contesting creditor appellant does not challenge the sale of the talukdari tenures. His case is that the istafa or surrender was a collusive transaction. The question for decision is whether this deed of surrender executed by the insolvent in favour of Ismail Choudhuri within 2 years of his Application for insolvency is voidable against the Receiver.

4. The contention was advanced before the learned judge that the kabala and the istafa ware part of the same transaction. The learned Judge accepted this plea and he held that Ismail Choudhuri did gat an actual surrender. He was of opinion that

it is extremely probable that Mahomed Iamail Choudhuri was aware fiat the insolvent had already promised to sell these lauds to the contesting creditor and that the latter had advanced money on this understanding.

5. He thought

it is possible that Mahomed Ismail Choudhuri induced his relation to relinquish the lands with the intention of doing an injury to the contesting creditor

(between whom and Ismail there has bean enmity for a long time). He considered the transactions suspicious, but being of opinion that

it has not been proved that the purchaser did not act in good faith

he passed the order which is the subject matter of the appeal.

6. The learned Judge was probably thinking of the Transfer of Property Act. Transfers in good faith and for valuable consideration are protected under the Transfer of Property Act and also under the Insolvency Act, but there is this difference that under the latter Act it is the transferee who must show that the transaction was in good faith and for valuable consideration. The idea of the learned Judge that a part of the sum of Rs. 3,000, the consideration for the kabala, was a consideration for the istafa doe3 not appear to be correct. It may be taken that, the two deeds were conceived and achieved about the same time. Neither the bainapatra nor the kabala mentions anything about the istafa. Even in the petition of objection filed by Ismail Choudhuri he doe3 not say that he paid anything for the istafa. He himself did not depose, but his manager did, and he does not say that anything was paid for the karsha properties. In the istafa an approximate value of Rs. 100 is put upon the karsha properties. The insolvent said he was leaving for his home in the Faridpur District and he was unable to manage the properties from a distant place. It does not appear that ha really left Barisal. He was arrested there in execution of the appellant's decree and we have it in the evidence of the manager of Ismail Choudhuri that he was Superintendent of the latter's estate for some months in 1329 B.E. The theory at the time the istafa was created was that these karshas were non-transferable holdings of no value. Whether they are worth anything or not has not been investigated, but this much is known that the appellant was willing to pay Rs. 2,000 for them. The transferor and the transferee were aware of this and when the latter decided to give them up in favour of the former it cannot be said the transfer was for valuable consideration.

7. The learned vakil appearing for Ismail Choudhuri contends that the surrender was valuable consideration which is that the transferor would not be liable for any further rent. Reference was made to Mahammadunissa Begum v. J.C. Bachelor [1905] 29 Bom. 428.

8. That was a case of relinquishment by one co-sharer in favour of a minor relative to induce the Collector to assume charge of the minor's estate. In the particular circumstances of that case it was held that the relinquishment was not without valuable consideration, The present case where a man surrenders for nothing his lands for which he might have got Rs. 2,000 cannot stand comparison with that case.

9. It is not necessary to hold that the document was a benami deed. The evidence falls short of that proof. It is difficult, however, to believe that not only the insolvent, but also his brother who had the other half share, gave up these lands for nothing and the suspicion gains ground as one reads the evidence that the large sums realized from the sub-tenants by making settlements with them were shared by the brothers with their relative Islam Choudhuri Shaheb. The insolvent was certainly looking after the latter's estate long after the so called surrender. The evidence is quite sufficient to establish that the transfer was neither in good faith nor for valuable consideration, The appeal therefore must be allowed with costs, the hearing fee being assessed at 4 gold mohurs. The istafa will be annulled and the karsba properties will be available to the Receiver for administering the estate of the insolvent.

Mukerji, J.

10. I agree.


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