TABLE OF CONTENTS

INTRODUCTION......................................................................................................................... 5

FRADULENT TRANSFER: A HISTORICAL OVERVIEW .................................................. 6

APPLICABILITY AND CONSTITUENTS UNDER SECTION 53 ....................................... 7

CONTINGENCIES OF FRAUDULENT TRANSFER .............................................................. 9

Presumption of fraudulent intention:........................................................................................... 9

Intent To defeat or delay creditors: ............................................................................................. 9

FRAUDULENT PARTITION ................................................................................................... 12

WAQF: ...................................................................................................................................... 13

SECTION 53, TRANSFER OF PROPERTY ACT, 1882 AND ITS IMPLICATIONS ....... 14

DIFFERENCE BETWEEN SEC. 53, TRANSFER OF PROPERTY ACT, 1882 AND

BENAMI TRANSACTION: ..................................................................................................... 15

Why Sec. 53 is exempted from provisions of Benami Transaction (Prohibition) Act, 1988: 15

RIGHT OF THE BONAFIDE PURCHASER ......................................................................... 17

CONCLUSION ........................................................................................................................... 19

1
 LIST OF ABBREVIATION
1. AIR All India Reporter

2. Anr. Another

3. HC High Court

4. SC Supreme Court

5. Hon’ble Honorable

6. i.e. That is

7. Ltd. Limited

8. No. Number

9. SCC Supreme Court Cases

10. SCR Supreme Court Reports

11. ss. Section

12. v. Versus

13. Vol. Volume

14. TOPA Transfer of Property Act

2
 INDEX OF AUTHORITIES

1. Abdul Shukoor Saheb v. Arti Papa Rao. A.I.R. 1963 S.C. 1150

2. Anantha Raman Pillai V. Arunachalam AIR 1952 TC 105.

3. Hanifa Bibi v. Punnamma, (1907) 17 Mad. L.J.11

4. Har prasad v. Mohammad Usman 1942 All LJ 645.

5. JagdambaPande v. Ram KhelawanUpadhya, AIR 1942 AII 344
6. Kedarwati v Radhey Lal AIR 1937 Pat 609
7. Maung Din v. Ma Hnin Me AIR 1925 Rang 2278

8. Mina Kumari v Bijoy Singh, (1916) ILR 44 Cal 662

9. Palamalai v. The South Indian Export Co (1910) 33 Mad. 334.
10. Pichamoppanar v. Vetu Pillai, AIR 1947 Mad 203.
11. Sarin v. Poplai
12. Smt. Phoolan Devi v. Surendra Prakash, A.I.R. 1983 All. 440

13. Union of India v. Rajeswari & Co. AIR 1986 SC 1748

14. Vinayak v. Mureshwar AIR 1994 Nag. 44.
.

3
 LEGISLATIONS REFERRED

1. Transfer of Property Act, 1882.

2. Benami Transactions (Prohibition) Act, 1988
3. Indian Contract Act, 1872

BOOKS REFERRED

1. Avtar Singh, The textbook on Transfer of Property Act, 1882, 125 (2nd, 2009).
2. DarashawJivaji Vakil, The Transfer of Property Act, 1882, 389 (2nd, 2004).
3. G. C. Bharuka, Mulla’s Transfer of Property Act, 1882, 274 (10th edn., 2006).
4. S. Narayana, Law of Benami, 68 (8th edn. 2009).
5. S.N. Shukla, Transfer of property Act, (29th ed. 2015), Allahabad Law Agency: Haryana
6. Vepa P. Sarathi, Law of Transfer of Property, (5th ed., 2013), Eastern Book Company:
Lucknow
7. G.C.V. Subbarao, law of Transfer of Property, (7th ed., 2015), ALT Publications
8. Shantilal Mohanlal Shah, Principles of the law of transfer, 69 (5thedn., 1980).

WEBSITES REFERRED

1. Manupatra Online Resources, http://www.manupatra.com.

2. Lexis Nexis Academica, http://www.lexisnexis.com/academica.
3. Lexis Nexis Legal, http://www.lexisnexis.com/in/legal.
4. SCC Online, http://www.scconline.co.in.

4
 INTRODUCTION

The rapidly growing commerce and infrastructure in the late nineteenth century lead to more
conflicts even in business, which necessitated the need for clear law on transfer of property and
thus the matter was referred to second law commission and thus came the Transfer of Property
Act, 1882.The Transfer of Property Act, 1882 mainly deals with transfer of immovable property.
It does not apply to transfers by the operation of law such as transfer of immovable property
necessitated by Order of Court for insolvency or forfeiture among others. The 137 sections
contained within have been divided into 8 chapters. When a movable property is transferred
inter-vivos (between two living persons), Sales of Goods Act, 1930 comes into play. When an
immovable property is transferred from living person to living person(s), the Transfer of
Property Act, 1882 comes into play. In case, the property is transferred from a dead person to a
living person(s), the law applied will be the Law of succession. Fraudulent Transfer dealt under
Section 53 of TOPA is mainly aimed at protecting the interest of the transferee in good faith and
for consideration empowers the creditors to avoid any transfer of immovable property made by
the debtor with intent to defeat or delay the creditors. A detailed analysis on the history of
transfer, the situations that makes a transfer fraudulent in nature and the recourses available to
the transferee in such circumstances will be the main scope of the research.

5
 FRADULENT TRANSFER: A HISTORICAL OVERVIEW

Fraudulent transfer law developed under the common law and was codified in the Statute of
Elizabeth.1 The Statute of Elizabeth provided for the avoidance and punishment of transfers
made "to the end, purpose and intent, to delay, hinder or defraud creditors.2 This early fraudulent
transfer statute was apparently in part a criminal law, in part a revenue measure (the Crown
could receive a portion of any recovery), and only in part a creditor protection. However, when
the English courts held that a judgment creditor could disregard a fraudulent conveyance and
levy execution on the property transferred, the fraudulent conveyance law became primarily one
of creditor protection.

This section deals with the subject known as fraudulent transfers of immoveable
property. Subject to savings hereinafter mentioned, a transfer is fraudulent when it is made with
intent to defeat or delay the creditors of the transferor or to defraud a subsequent transferee. In
the first instance consideration may or may not be present. In the second case consideration is
non-existent. In either case the transaction is voidable at the instance of the creditor defeated or
delayed or the transferee defrauded. The Law of Property Act, 1925, on which the present
section is based, is wider; instead of the creditor being entitled to avoid the transaction the person
prejudiced is given the right. The original section was founded on two statutes of Elizabeth,
namely, 13 Eliz., c. 5 and 27 Eliz., c. 4. These two statutes were repealed and re-enacted as
Sections 172 and 173 of the Law of Property Act, 1925. The same has been brought in verbatim
under Section 53 of TOPA, 1882.

1
13 Eliz., ch. 5 (1571) (Eng.).
2
13 Eliz., ch. 5, S 1 (1571) (Eng.).

6
 APPLICABILITY AND CONSTITUENTS UNDER SECTION 53

Section 53: - Fraudulent transfer.-(l) Every transfer of immovable property made with intent to
defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so
defeated or delayed.
 Nothing in this sub-section shall impair the rights of a transferee in good -faith
and for consideration.
 Nothing in this sub-section shall affect any law for the time being in force relating
to insolvency.
A suit instituted by a creditor (which term includes a decree holder whether he has or has
not applied for execution of his decree) to avoid a transfer on the ground that it has been made
with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf
of, or for the benefit of, all the creditors3.
(2) Every transfer of immovable property made without consideration with intent to
defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without consideration shall be
deemed to have been made with intent to defraud by reason only that a subsequent
transfer for consideration was made.

This section consists of two parts. The first part lays down that every transfer of
immovable property made with intent to defeat or delay the creditors of the transferor
shall be voidable at the option of any creditor so defeated or delayed. To take one
illustration, A, who is heavily indebted, and against whom a suit for the recovery of debts
is going to be filed, sells his house to B to save it from being attached and sold in payment
of the debt. If B knows of A's fraudulent intention, the sale to B is liable to be set aside at
the option of the creditors. It will be seen that the rights of a transferee in good faith and
for consideration are not affected even though the transfer is made with intent to defeat
the creditors.

3
S.N. SHUKLA, TRANSFER OF PROPERTY ACT, (29th ed. 2015), Allahabad Law Agency: Haryana

7
 The second part of the section lays down that every transfer of immovable property
made without consideration with intent to defraud a subsequent transferee shall be
voidable at the option of such transferee, but that no presumption to defraud shall
necessarily arise by reason only that a subsequent transfer for consideration was made 4.

Section 53, while safeguarding the rights of transferee in good faith and for
consideration, empowers the creditors to avoid any transfer of immovable property made
by the debtor with intent to defeat or delay the creditors. It, however, requires that such a
suit must be instituted either in a representative capacity or for the benefit of all the
creditors.

The basic requisites for the applicability of Section 53 may be stated to be: (i) there
should be a transfer of immovable property; (ii) the transfer ought to have been made
with intent to defeat or delay the creditors; and (iii) the suit must be brought by the
creditor, acting on behalf of or for the benefit of the entire body of creditors 5. The primary
requirement for the applicability of the section, therefore, appears to be the existence of a
valid transfer. Where it is claimed that the transfer made by the debtor was a sham and
fictitious transaction and there was no animus transferendi, i.e. when the real intention of
the parties was not to give effect to the supposed transfer at all and it was merely to be
used as a shield or a facade for achieving solve ulterior purpose, Section 53 of the
Transfer of Property Act cannot legitimately be taken aid of. Policy of law always has
been to frown upon all attempts at fraudulent transfers. While law favours exchange of
property as a natural right of a person to deal with it in a normal manner, the law has
always set its face against this privilege being abused to the detriment of the innocent public,
creditors inclusive, who had dealt with the transferor on the faith of the security of their debtor.
Any attempt by the debtor to withdraw his assets from the control of his creditors, therefore, has
always received just condemnation by the courts of law who have compelled the debtor to make
good the representation on the faith of which presumably he had obtained credit. In such
circumstances, the Courts have never been loath in setting aside such transactions. Before
Section 53 of the Transfer of Property Act can be applied, the creditor plaintiff must come to the

Id
4
5
VEPA P. SARATHI, LAW OF TRANSFER OF PROPERTY, (5th ed., 2013), Eastern Book Company:
Lucknow

8
 Court in the premise that although the transaction was genuine and effective, yet it was entered
into with intent to delay or defeat the creditors. It is only to such cases that Section 53 will in
terms apply.6
Every transfer of immovable property made with intent to defeat or delay the creditors of
the transferor will be voidable at the option of any creditor so defeated or delayed7. A suit
instituted by a creditor, which term includes a decree-holder whether he has or has not applied
for execution of his decree, to avoid a transfer on the ground that it has been made with intent to
defeat or delay the creditors of the transferor must be instituted on behalf of or for the benefit of,
all the creditors8. Thus, a marriage settlement, a deed of appointment', a surrender of a life estate,
a relinquishment, a collusive award or decree is voidable at his option but not a deed of
dissolution of partnership with intent to defeat the creditors.

CONTINGENCIES OF FRAUDULENT TRANSFER

Presumption of fraudulent intention:
The existence of a fraudulent intent has to be proved and would not be presumed by the
court. Each case has to be decided on its own merits, but where the transferee was in
embarrassed circumstances and the transfer is between near re1ations or members of a small
community; or the transfer was a cover up primarily to retain the benefit for the transferor unless
the benefit is very small, these would be evidences of fraudulent intention but merely because the
transfer was without considerations; or was for discharge of a bona tide debt in accordance with
family policy or was to a female descendant in absence of present debts would not indicate
fraud.9

Intent To defeat or delay creditors:

The intention must be to defeat or delay the creditors generally, that is, all the creditors
or even a single creditor but a mere preference of one over the other creditor is not enough for

6
Smt. Phoolan Devi v. Surendra Prakash, A.I.R. 1983 All. 440,
7
Transfer of Property Act 1882 Sec 53 (1) para 1. Nothing in this statutory provision will affect anv law
for the time being in force relating to insolvency: Transfer of property Act 1882 Sec 53(1) para 3.
8
Transfer of property Act, 1882 Sec 53 para 4. Anantha Raman Pillai V. Arunachalam AIR 1952 TC 105.
9
Maung Din v. Ma Hnin Me AIR 1925 Rang 2278.

9
the application of this rule unless the transferee shares a fraudulent intention" or it is with the
intention to defeat a particular creditor’s interest , Where the price realised from one of the
creditors is considerably in excess of the debts or where a fictitious debt is included in the
consideration or where more property is transferred than necessary, it is an evidence of an intent
to defeat the creditors generally The mere fact that a portion of the property is transferred is
immaterial unless there is cogent proof that there is other property left which is sufficient in
value and easily available for the creditors. Inadequacy of consideration may not itself be
sufficient to make the transaction voidable.10
Such intention can be proved by circumstantial evidence. The evidence required to
substantiate fraud must necessarily vary according to the circumstances of each case11. The
following factors may be relevant to a conclusion that the transaction is not bona fide-
(i) the debtor sells all his property keeping nothing to himself; (ii) the consideration is
grossly inadequate;
(iii) the transfer is made secretly and in haste;
(iv) the transferor puts all his property out of the reach of those who might become his
creditors before embarking on some hazardous enterprise.
But each of the above factors must be considered along with other circumstances of the
case. However suspicious a transaction may be, there must be cogent evidence of fraud. The
mere fact that debts are due from the transferor is not by itself sufficient to establish a fraudulent
intention.12
It must, however, be noted that if a person acquires property for value and in good faith,
that is, without being a party to any design on the part of that transferor to defeat or delay
creditors, his rights will not be affected although the transferor's intention might have been
fraudulent. In fact, whenever Section 53 is applied it is the transferee who ultimately suffers
provided he knew of the fraudulent intention of the transferor. The knowledge and intention of
the transferee are the main factors. In Palamalai v. The South Indian Export Co.13, A being in
financial difficulties wished to convert his property into cash so as to conceal it from his

10
Kedarwati v Radhey LalAIR 1937 Pat 609
11
Supra note 5
12
G.C.V. SUBBARAO, LAW OF TRANSFER OF PROPERTY, (7th ed., 2015), ALT Publications
13
(1910) 33 Mad. 334.

10
creditors. B being aware of A 's object assisted him by purchasing the property. The sale was
voidable under this section.
In order to take out the case from the operation of Section 53, it is, however, essential that
the debtor must not reserve any benefit for himself. If the debtor sells property to another
creditor to discharge the debt due to him and the price obtained is considerably in excess of the
debt discharged, this would be evidence of intent to defraud.14
The terms of Section 53 (1) are satisfied even if the transfer does not 'defeat' but only
'delays' the creditors. Therefore, the fact that the entire property of the debtor was not sold, does
not by itself negative the applicability of Section 53 (1) unless there is cogent proof that there is
other property left sufficient in value and of easy availability to render the alienation in question
immaterial for the creditors.15

14
Hanifa Bibi v. Punnamma, (1907) 17 Mad. L.J.11.
15
Abdul Shukoor Saheb v. Arti Papa Rao. A.I.R. 1963 S.C. 1150

11
 FRAUDULENT PARTITION

This section has been applied to cases of partition. The correctness of these decisions was a
question canvassed before the Supreme Court in Sarin v. Poplai,16 but the Supreme Court
declined to go into the question. The correct view, it is submitted, is that a partition is not a
transfer, and, therefore, not strictly within the Section, but that the principle of the Section
applies to a fraudulent partition. Where the object of the transfer is not merely to give a sharer
his rightful share in the family property, but to effect the partition in such a way that such sharer
would be able to defeat the creditors, as for instance, to allot to him properties which the
creditors would not be able to touch and which he would be able to keep for himself, it is clearly
a transaction which fulfils the requirement of the Section.17
A reference to arbitration which led to an award and decree for partition by which the
father received an allowance in lieu of his share in the family property, was held not to be
voidable under this section as there were no debts in existence at the time of the reference, and as
the object was not to defeat creditors, but to safeguard the interests of a minor son. A partition
which does not provide for the payment of a Hindu father's debt is mala fide, and may be
avoided by a creditor in proceedings in execution of a decree against the father. Similarly, in a
partition in which no property was allotted to the father who was indebted, it was held that the
partition was illusory, although the sons were directed to pay the father's debts.18
Where there is partition in a joint Hindu family or a release deed by an indebted
coparcener, S 53 is attracted, if the object of the allotment of share to such coparcener is to help
him defeat his creditors. Even assuming that partition in a Hindu family and release deed by a
coparcener in respect of his share does not amount to a 'transfer' within the meaning of S 5 and,
therefore, is not within the purview of s 53, the principle of the section can be invoked. If the
object of a given instrument of a partition or a release deed is not to give a sharer his rightful
share in the family properties, but to effect a partition in such a way that such a sharer would be
able to defeat the creditors, it would amount to a fraudulent partition19.

16
1966 1 SCR 349, AIR 1966 SC 432.
17
Vinayak v. Mureshwar AIR 1994 Nag. 44.
18
Pichamoppanar v. Vetu Pillai, AIR 1947 Mad 203.
19
Supra note 12

12
WAQF:
A deed of waqf executed as a device to put property out of the reach of creditors has been
held to be a transfer to which this section applies, the court observing that S 53 does not infringe
any rule of Mahomedan law, for under that law no person can make a waqf of his entire property
without making arrangements for the payment of his debts.20In such a case, it is immaterial that
the transfer is valid under Mahomedan law. It is open to a debtor to prefer one or more creditors
over the others in the payment of his debts, and so long as he retains no benefit in the property,
the mere circumstance that some creditors stand paid while others remain unpaid, does not attract
the provisions of S 53.
Where it was found that the sale of the assets of the company was effected for the
purpose of discharging the debts payable by the company and that the consideration was not
inadequate, it is immaterial that the transfer was effected in favour of a person who was not a
creditor.
A debtor can prefer one creditor over others in the payment of his debts. So long as he
retains no benefit in the property, the mere circumstance that some creditors stand paid while
others remain unpaid, does not invalidate the transfer. Sale of assets by a company for adequate
consideration is not invalid merely because it is in favour of a non-creditor.21

20
Har prasad v. Mohammad Usman 1942 All LJ 645.
21
Union of India v. Rajeswari & Co. AIR 1986 SC 1748.

13
 SECTION 53, TRANSFER OF PROPERTY ACT, 1882 AND ITS IMPLICATIONS

This section serves dual purpose that is the protection of transferee who acts in good faith, pays
due consideration and to whom property has been transferred and creditor to defeat or delay
whom property has been transferred. Sec 53 states that,

53. Fraudulent transfer:

“(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the
transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this
sub-section shall impair the rights of a transferee in good faith and for consideration. Nothing in
this sub-section shall affect any law for the time being in force relating to insolvency. A suit
instituted by a creditor (which term includes a decree-holder whether he has or has not applied
for execution of his decree) to avoid a transfer on the ground that it has been made with intent to
defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of,
all the creditors.

(2) Every transfer of immovable property made without consideration with intent to defraud a
subsequent transferee shall be voidable at the option of such transferee. For the purposes of this
sub-section, no transfer made without consideration shall be deemed to have been made with
intent to defraud by reason only that a subsequent transfer for consideration was made.22“

Section 53 essentially envisages a situation where in order to delay and defeat creditor, transferor
transfers the property to the transferee. So that creditors cannot claim dues arising out of that
property. For instance when Mr. X owes Rs. 20,000 to Mr. Y as a debt and has kept the land as a
security23. If Mr. X transfers this land to Mr. A then Mr. Y can avail benefits of Sec. 53.

22
Sec. 53, Transfer of Property Act, 1988.
2323
Naresh Mukherjee, But That’s Not Mine!, The telegraph (September 28,
2011)http://www.telegraphindia.com/1110928/jsp/opinion/story_14562807.jsp, Last visited on September
2, 2017.

14
DIFFERENCE BETWEEN SEC. 53, TRANSFER OF PROPERTY ACT, 1882 AND
BENAMI TRANSACTION:
The transaction as mentioned in Sec. 53 is that is a property transfer between transferor
and transferee has to be valid transfer and it cannot be a fictitious or sham transaction. In a
situation where there is no real intention of the actual transfer of property and real intention is the
satisfaction of some ulterior motive beneficial to the transferor.24 However, in the case of
Benami transaction, there is no real transfer at all. This is explained by Sir Lawrence Jenkins in
Mina Kumari v Bijoy Singh,

“The difference between fraudulent transaction and Benami transaction is distinct though it is
often blurred. Such colourable or sham deeds do not require to be set aside, for the real title is
all along with the transferor. They are outside the scope of section 53. It is relevant to note that a
contention that the transaction is a sham and nominal transaction, and that the property was
never conveyed at all though transferee holds it for the-the benefit of transferor, and remained
the property of the original owner, may go even contrary to the contentions raised that are based
upon s 53 of the TP Act. If the contention that it is a sham and nominal transaction is accepted, s
53 may not have any application. In fact, the challenge based on s 53 involves the admission that
the transfer is a real one.”25

Benami transaction is different from the fraudulent transaction because in the case of Benami
transaction there is no transaction at all, but in the case of the fraudulent transaction there is
transaction but that is a result of a conspiracy between transferor and transferee. 26

Why Sec. 53 is exempted from provisions of Benami Transaction (Prohibition) Act, 1988:

As stated earlier in the case of Benami transaction, there is the real owner who is a
beneficiary and name lender. However, Benami Transaction (Prohibition) Act, 1988 eliminated
this distinction by making name lender as a real owner, depriving real owner his beneficial
interest. However, there are certain circumstances in which the impact of such transaction is not
just limited to unjust enrichment of benamdar at the cost of benefit of beneficiary but might lead

24
Phoolan Devi v. Surendra Prakash, AIR 1983 AII 440(442)
25
Mina Kumari v Bijoy Singh, (1916) ILR 44 Cal 662
26
JagdambaPande v. Ram KhelawanUpadhya, AIR 1942 AII 344

15
to causing harm to the third person.27 To avoid such possibility Sec 53 is exempted where
fraudulent transfer between transferor and transferee should not affect creditor. Thus to preserve
the interest of innocent third party Sec 53 is an exception carved in sec. 6 of Benami Transaction
(Prohibition) Act, 1988.

27
SHANTILAL MOHANLAL SHAH, PRINCIPLES OF THE LAW OF TRANSFER, 69 (5thedn., 1980).

16
 RIGHT OF THE BONAFIDE PURCHASER

The right is dealt by section 53 of TPA and has two parts- 53 (1) and 53 (2). This right of the
bona fide purchaser is incorporated in section 53(1) which says that if a property is transferred by
a person who is heavily indebted and transfer the property for consideration to a Bona fide
purchaser with good faith and without notice, with intent to defeat or delay the creditors, the
rights over the property transferred to that Bona fide purchaser will not be hampered. But if the
transferor and the transferee engaged together in the work of defrauding or delaying the
creditors, transferee will be stopped from taking the defence of this right and the transaction will
be voidable at the option of the creditors but require that such suit must be instituted either in a
representative capacity or for the benefit of all the creditors.
ILLUSTRATION:
A, who is heavilyindebted, and against whom a suit for the recovery of debts is going to
be filed, sells his house of A’s fraudulent intention, the sale to B is liable to be set aside at the
option of the creditors.
The right is based on the principle of equity, is just to prevent the rights of the Bonafide
Purchaser over the property transferred to him for consideration and under good faith without
notice of transferor’s fraudulent intention for defrauding or delaying the creditors. If the
transferee participated in the transferor’s intention then the transferor will be set aside by the
option of creditoreven if it is for consideration. Where the transferor has fraudulent intention, the
transferee will only be protected if he proves that he acted in good faith and he has paid
consideration for the transfer. Non- Participation in the transferor’s fraudulent intention
constitutes good faith on the part of transferee28.
This right is dealt by 53(2) of TPA, every transfer of immovable property made without
consideration with intent to defraud a subsequent transferee shall be voidable at the option of
such transferee, but it is provided that such transfer should not be deemed to be fraudulent by
reason only of any subsequent transfer for consideration. This section says that when a person
transfers a property gratuitously to a person with an intent to defraud any subsequent transferee,
on the option of this subsequent transferee the gratuitous transfer can become voidable.
28
Anand, Rights of the Bonafide Purchaser – Case Study, LawyersclubIndia, (June 02, 2011),
http://www.lawyersclubindia.com/articles/Rights-of-the-Bona-fide-Purchaser-A-Case-Study-3772.asp,
Last accessed on September 10, 2017.

17
ILLUSTRATION:
A settles property to his son. This is done in a will executed and registered by A. He sells
the property to B. It is subsequent to settlement. Ordinarily B should get nothing, but if he can
prove that settlement as made pending negotiation of sale to B and it was made with intent to
defeat B. And B is a bonafide purchaser for value without notice; the settlement would be
voidable at the option of B.

18
 CONCLUSION

This section consists of two parts. The first part lays down that every transfer of
immovable property made with intent to defeat or delay the creditors of the transferor shall
be voidable at the option of any creditor so defeated or delayed.The second part of the
section lays down that every transfer of immovable property made without consideration
with intent to defraud a subsequent transferee shall be voidable at the option of such
transferee, but that no presumption to defraud shall necessarily arise by reason only that a
subsequent transfer for consideration was made.
If the object of a given instrument of a partition or a release deed is not to give a
sharer his rightful share in the family properties, but to affect a partition in such a way that such a
sharer would be able to defeat the creditors, it would amount to a fraudulent partition. From this
we can conclude that concept of fraudulent transfer also lies in the case of partition. Therefore,
this concept of fraudulent transfer has a wider scope.
In reality lot of people has an opinion that Benami transaction is almost similar to
fraudulent transfer. But, Benami transaction is different from the fraudulent transaction because
in the case of Benami transaction there is no transaction at all, but in the case of the fraudulent
transaction there is transaction but that is a result of a conspiracy between transferor and
transferee.

19