1. The judgment will be the same in F.A No. 121 of 1932. This is an appeal by the defendants in a suit brought by the plaintiff for a declaration that certain house sought to be taken in execution by the defendants is not liable to execution being the house of the plaintiff. The plaintiff has already been an objector in execution proceedings and her objection in those proceedings was dismissed. It is therefore agreed that the burden of proof is upon her to show that the alienation, which caused the suit house which was the property of her husband (the judgment-debtor) to become her house, is not a fraudulent alienation, that it was made bona fide and for consideration. The learned trial Judge has found as a fact that the transaction is bona fide and for consideration. To make the trend of the argument clear it is desirable to give some dates. On 14th June 1926 a third party attached the suit property and that attachment continued all through the material dates that will be under discussion hereafter until towards the end of 1927. On 19th May 1927 the judgment-debtor (husband of the plaintiff) purchased the stamp paper on which on the same day the so called gift deed (Ex. P-3) was written and executed. On 11th July 1927 the present defendant attached the house. On 13th July 1927 the document was registered. The attachment which falls to be considered in F.A No. 121 of 1932 was made in July 1928, and except as regards that date, the two cases stand on all fours and the arguments that would apply to the one would apply to the other.
2. The date of marriage between the plaintiff and the judgment-debtor was 21st December 1924. There is evidence that, before the marriage, it was agreed that the husband should pay to the bride Rs. 2,500 to take the form of a house worth Rs. 1,500 to be given before marriage and cash of a thousand rupees to be given on demand. The entries in the register relating to that matter appear as a thousand rupees to be paid on demand. The witnesses that have been called have shown that the reason why the thousand rupees only appears is that Rs. 1,500 (part of the arrangement) had already been satisfied before the marriage by the transfer of a house by the husband to the wife.
3. That was the position as understood by all the parties until shortly after the marriage when the wife discovered that the so-called transfer of the fifteen-hundred rupee house to her took the form of a will so that the alienation was not operative immediately but only on the death of her husband. Secondly, and more fatally, she found that the house in question did not belong to her husband but to one of his relatives. Not unnaturally in that state of affairs, there was considerable dispute between her and her husband and she was insisting that this fraud should be put right, and it was, according to the evidence, put right by the husband eventually transferring to her a better house in lieu both of the fifteen-hundred rupee house which was not his and the obligation to give a thousand rupees on demand to his wife. The house in question is the subject-matter of the so-called gift deed, which I should prefer to call a transfer deed dated 19th May 1927.
4. The following attacks have been made on that transaction. Firstly, it is said that the value of the house being Rs. 6,000 and the husband being in difficulties the transfer is a palpable screen and not bona fide. (After examining the evidence, their Lordships upheld the conclusion of the trial Court that it was worth nothing more than Rs. 2,500, the judgment proceeded.) Next it is said the whole thing is an imaginary transaction: the wife had already received her dower and anyhow the dower was nothing more than a thousand rupees. A suggestion is thrown out that even the thousand rupees had already been paid to her and consequently this is a case similar to that which was considered by the Privy Council in AIR 1930 PC 255,1 a case where at the time of the transaction which purported to be an alienation in satisfaction of her dower debt there was no dower debt and it was simply a fraudulent expedient to screen the property from creditors. As to this, there is ample evidence that there was the arrangement of the fifteen-hundred rupee house and the arrangement of the thousand rupees cash to be paid on demand. The arrangement as regards the fifteen-hundred rupee house had, in fact, been carried out; only it had been carried out in the fraudulent way we have noted above, which of course, was a way that the wife was entitled to complain of. That matter had not been put right until this alienation dated 19th May 1927. There is not the long period of time that elapsed in the 1930 Privy Council case. There is a comparatively short period of time some of which was spent in the wife making the discovery that she had been defrauded by her husband. We are therefore of the opinion that it has not been shown that this is a fraudulent transaction. On the contrary the plaintiff has satisfied the burden of proof that is upon her to show that the transaction was for consideration, was a real transaction and was implementing the obligation which her husband was under to her and we desire to draw attention to the observations of their Lordships of the Judicial Committee in 43 Cal 5212:
As matter of law their Lordships take it to be clear that in a case in which no consideration of the law of bankruptcy applies there is nothing to prevent a debtor paying one creditor in full and leaving others unpaid although the result may be that the rest of his assets will be insufficient to provide for the payment of the rest of his debts… The transfer which defeats or delays creditors is not an instrument which prefers one creditor to another, but an instrument which removes property from the creditors to the benefit of the debtor. The debtor must not retain a benefit for himself.
5. We comment that it makes no difference that the transferee in cases of this nature is the debtor's wife. It is a part of the Mahomedan law that while on the one hand divorce is very easy at the instance of a husband and can be done by his unilateral act, the wife is protected by the practically universal practice of settling a payment to be made by the husband which payment should be made, but often is not, at the time of marriage. In respect of that agreement the wife is as such a creditor as a person would be who had sold the husband goods; and if she sees her husband in difficulties, it does not make it dishonest for her to receive an alienation which satisfies that indebtedness to her, which for a contract to have been completely carried out, should have been made to her long before, at the time of marriage, as in the majority of cases. The next ground of attack is based upon the now exploded view expressed by certain High Courts in India that owing to the wording of the Transfer of Property Act, a transfer is not complete until it has been registered. Therefore it is said, this transfer deed of 19th May 1927 was not a completed transfer until the date on which it was registered, that is, 13th July 1927; the date of attachment being 11th July 1927, the attaching creditor has priority. That matter was, as we have indicated, a matter of considerable doubt and difficulty until 1926 when the case in 50 Mad 1933 came before their Lordships. They decided (they were considering a gift and Section 123 of the Transfer of Property Act), that a gift is complete when the deed of gift was complete and a transfer is not postponed until the date of registration. This matter was further considered by their Lordships and that decision was followed in 1928 in 52 Bom 313.4, From that date we take it as established by authority that is binding open us that in a case of transfer by gift (Section 123 of the Transfer of Property Act), or by sale (Section 54 of the Transfer of Property Act), the alienation is complete when the conveyancing document is completed and is not postponed until the date of registration. We observe that in this case it would appear from the evidence that the deed of transfer was not merely executed but completed and delivered on 19th May 1927.
6. The next line of attack is a return to the allegation that this is a fraudulent attempt to screen property and is based on the argument that as the attachment was on 11th July 1927 and the registration was on 13th July 1927 the true date of the document was not 19th May 1927 but some time after 11th July 1927, and 19th May 1927 is merely a falsification of the document in the nature of a forgery making the document tell a lie about itself by wrongly stating its date. Apart from the various presumptions that arise to prevent such a conclusion in the absence of any evidence one way or another there is here the very material fact that the stamp was purchased on the 19th May. It is said that this alienor was on that date, nearly two months before the attachment, arming himself to be ready for the trouble that he saw coming, and while arming himself with stamp paper he did not go further and complete this stamp paper by writing on it the necessary alienation that he contemplated making in order to defeat his creditors. Our only observation on this ground of attack is that it has its foundations in the ingenuity of counsel and not in the evidence. The next point is a point of some little ingenuity. It has been noted above that there was a third party attachment on 14th June 1926 and that attachment continued until after July 1927. It is said that by Section 64 of the CPC, it is provided:
Where an attachment has been made, any private transfer or delivery of property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other moneys contrary to such attachment, shall he void as against all claims enforceable under the attachment.
7. Now, it is said that this is a claim enforceable under the attachment and not only enforceable under the attachment by attaching creditor (a third party) but enforceable by another attaching creditor, the defendant in this action. In our opinion, it is not enforceable by the defendant in this action. This claim is not enforceable under that attachment until that attachment has reached the stage of bringing the assets to the executing Court. The old section, the place of which has been taken by the present S. 64, was S. 295. In 41 Mad 2655 their Lordships of the Madras High Court quote the following observations of the Judicial Committee made in 44 Cal 6626:
To bring section 295 into play certain conditions are necessary, and one of them is that there should be assets held by the Court.
8. There the Full Bench of the Madras High Court was considering on a reference the following question:
Whether non-attaching decree-holders, who have applied for rateable distribution under a subsisting attachment which has since been raised by the satisfaction of the decree or otherwise, are entitled to question a private alienation made during the continuance of such attachment?
9. The answer was that the other decree-holders were not entitled to question the alienation under Section 64 of the CPC. According to that decision a person in a position similar to the decree-holders here is not entitled to rely on the third party attachment even where the proceeding has reached the stage of an application for rateable distribution. Here, there is no application for rateable distribution so that there are two links at least missing in the chain: (1) the attaching creditor under the attachment made in 1926 never got the assets into the executing Court, and (2) the present attaching creditor under the attachment in 1927 never applied for rateable distribution. That earlier attachment was subsequently raised and passes out of the story. In our opinion, this ground of attack fails. Then it is said that the plaintiff is out of time owing to the operation of Article 11(1) of the Limitation Act, which, in the case of a suit by a person against whom an order is passed on his objection in execution proceedings, fixes one year. The dates are as follows: the objection order was passed on 5th March 1928. The plaint was presented in one Court, on 15th September 1928, of course, in time. That was returned by that Court for presentation to what that Court held, as the proper Court, on 14th December 1928.
10. The plaintiff challenging the correctness of that order appealed, on 6th February 1929, and the appeal was dismissed, on 2nd September 1929, and the plaint was presented to the Court as decided by the first Court on 25th November 1929. In our opinion the plaintiff has been litigating the matter in a Court which she bona fide believed to be the correct tribunal, believed that to the extent of incurring costs of an appeal against the decision that it was not the correct tribunal, for something like 10 months. Those 10 months must be taken into account in considering the period that has elapsed between the date of suit and the date when the plaint was eventually filed in the correct Court, and if this is so taken into account the time that has expired is less than a year. The limitation point, therefore, in our opinion, fails. The result is that, the appeal is dismissed with costs. One set of fees to be divided equally.
K.S/V.V
11. Appeal dismissed.