ES कपटपूर्ण अन्तरण से संबंधित विधि की व्याख्या कीजिए।

Law Relating to Fraudulent Transfer of Property

1. Meaning of Fraudulent Transfer

A fraudulent transfer is a transfer of property made with the intent to defeat or delay creditors. The law prevents a debtor from dishonestly transferring property to avoid paying debts.

In India, the concept of fraudulent transfer is governed by Section 53 of the Transfer of Property Act, 1882 (TPA).

Section 53 of TPA: Fraudulent Transfer

• If a person transfers property with the intent to defeat or delay his creditors, such a transfer is voidable at the option of the creditors.
• This means creditors can approach the court to have the transfer declared void and recover their dues.

---

2. Essentials of a Fraudulent Transfer

For a transfer to be fraudulent under Section 53(1) of TPA, the following conditions must be met:

(i) Existence of a Debt or Liability

• The transferor must have creditors whose claims are being defeated.

(ii) Transfer of Property

• The debtor must have transferred his property in some way (sale, gift, mortgage, etc.).

(iii) Fraudulent Intent

• The main intention of the transfer should be to defeat or delay creditors.
• Mere insolvency of the debtor does not make a transfer fraudulent unless intention is proven.

(iv) Transfer Must be Without Consideration or With Malafide Intent

• If the transfer is for inadequate or no consideration, it raises suspicion of fraud.

---

3. Who Can Challenge a Fraudulent Transfer?

• Only creditors can file a suit challenging the transfer.
• The burden of proving fraudulent intent lies on the creditor.
• A creditor must file a suit under Section 53 within the limitation period.

---

4. Exceptions to Fraudulent Transfers

A transfer will not be considered fraudulent if:

1. It is made in good faith and for adequate consideration

   • Example: A person sells his property to pay off debts.

2. The transferee (buyer) acted in good faith

   • If the buyer was unaware of the fraudulent intent, the transfer is valid.

---

5. Fraudulent Transfer by an Insolvent Person

• If a person declared insolvent transfers property, such a transfer is void under the Insolvency and Bankruptcy Code (IBC), 2016.
• The court can reverse the transfer and allow creditors to claim the property.

---

6. Judicial Interpretation

• Gour Chandra v. Prasanna Kumar (1926) – If the primary intention of a transfer is to defraud creditors, the transfer is voidable.
• Mathura Mohan v. Ram Kumar (1937) – A fraudulent transfer does not become valid even if consideration is paid if the main intent is to defeat creditors.

---

7. Conclusion

Fraudulent transfers are voidable at the option of creditors under Section 53 of TPA. Courts examine the intention of the transferor, and if the motive is to delay or defeat creditors, the transfer can be set aside. However, bona fide transactions for fair consideration are protected.