Kasthuri Chetty v. Chinnasami Pillai

S. A. No. 443 of 1923:—The plaintiff's suit was dismissed in the Court of First Instance on the District Munsif's finding that the sale deeds Exs. D, B and F were brought about to defraud 1st defendant's creditor, viz., 4th defendant. The Subordinate Judge also found as a conclusion of fact that these transactions were not bona fide.

He, however, gave the plaintiff, who was a purchaser under Ex. F, a charge for Rs. 450 on the suit properties on the ground that his vendor Maruthanayagam Pillai had paid Rs. 400 in discharging a prior mortgage (Ex. C) on 1st defendant's house in Dindigul. The learned Judge did not rely on the doctrine of subrogation but he gave this relief out of equitable considerations. In so doing, he overlooked the law that there can be no equity in favour of a purchaser, in fraud of creditors who acts without bona fides (vide Karuppan Ambalagaram v. Sakuth Levvai(1).

Even assuming that some consideration passed for the sale under Ex. F to plaintiff, which the District Munsif found against and the Subordinate Judge has not clearly found to be established the plaintiff has no right to be paid what his vendor paid under a speculative and fraudulent purchase.

The appeal is allowed and the decree of the Lower Appellate Court is reversed and the decree of the District Munsif dismissing the suit is restored with costs in this Court

Second Appeal No. 1489 of 1923:—On the findings of the Courts below, and in view of the result of the connected S. A. No. 443 of 1923, this Second Appeal is dismissed with costs.

C. K.S. A. No. 443 of 1923 allowed and S. A 1489 of 1923 dismissed.