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Ramesh   16 August 2017

Fraudulent transfer of properties and file for insolvency

Sir,

I'm in trouble and please advice me.  I gave 20 Lacs Loan to my relative and received promissory note.   As I pressurised him to return money, he transferred his 3 properties(house and two agricultural lands) as "gift settlement" to his daughter, giving nothing to his 2 sons.

I filed money recovery case against him and he received summons.  He is yet to file the written statement.   Now he has applied for insolvency, stating that he is farming in LEASED lands and unable to pay his debts as his crops died due to failed monsoon, listed me and 3 other creditors.  He did not list his 3 properties.

what is the best action to take now?

1) In reply to his IP, pray court to realise all the above 3 properties to pay creditors?

2) Contest and dismiss the IP citing the fraudulent transfer of properties?

3) File suit and pray court to void/set aside the fraudulent transfer of 3 properties to daughter using section53?  Am I eligible to file this suit as  I'm a creditor not a judgement creditor, as the money suit is pending against pronote.  I'm a creditor as per IP petition filed by debtor.

Once summons are sent to debtor, he and his daughter will definitely sell the property to an bona fide buyer and make cash to avoid paying creditors.   The bona fide buyer will be protected by Law(section53) because buyer is not aware of the debt of father and pending money recovery suit.

what is the implication of set aside of the sale of property?  Further sale of property is blocked?
It will have an entry in encumbrance certificate?  so buyers avoid on seeing the EC? 


4) file creditor IP against him and furnish the list of his properties?  Am I eligible to file this suit as I'm a creditor not a judgement creditor, as the money suit is pending against pronote.  pray the court to delcare debtor as insolvent and realise all the above 3 properties to pay creditors?  Is this insolvency proceeding reliable and completes with reasonable time? once summons are sent to debtor, he and his daughter will definitely sell the property 



Learning

 4 Replies

Siddharth Srivastava (Advocate)     16 August 2017

In the proceeding you can point out the transfer of said properties which was faudulently transferred with the purpose to deceit the innocent creditors like you.

Ramesh   16 August 2017

thanks for your reply

what action court will take after pointing out the fraudulent transfer of properties?

simply dismiss the case?  or order to auction above properties and distribute among creditors?

Azhagananth (Lawyer)     18 August 2017

Originally posted by : Ramesh
Sir,

I'm in trouble and please advice me.  I gave 20 Lacs Loan to my relative and received promissory note.   As I pressurised him to return money, he transferred his 3 properties(house and two agricultural lands) as "gift settlement" to his daughter, giving nothing to his 2 sons.

I filed money recovery case against him and he received summons.  He is yet to file the written statement.   Now he has applied for insolvency, stating that he is farming in LEASED lands and unable to pay his debts as his crops died due to failed monsoon, listed me and 3 other creditors.  He did not list his 3 properties.

what is the best action to take now?

1) In reply to his IP, pray court to realise all the above 3 properties to pay creditors?

2) Contest and dismiss the IP citing the fraudulent transfer of properties?

3) File suit and pray court to void/set aside the fraudulent transfer of 3 properties to daughter using section53?  Am I eligible to file this suit as  I'm a creditor not a judgement creditor, as the money suit is pending against pronote.  I'm a creditor as per IP petition filed by debtor.

Once summons are sent to debtor, he and his daughter will definitely sell the property to an bona fide buyer and make cash to avoid paying creditors.   The bona fide buyer will be protected by Law(section53) because buyer is not aware of the debt of father and pending money recovery suit.

what is the implication of set aside of the sale of property?  Further sale of property is blocked?
It will have an entry in encumbrance certificate?  so buyers avoid on seeing the EC? 


4) file creditor IP against him and furnish the list of his properties?  Am I eligible to file this suit as I'm a creditor not a judgement creditor, as the money suit is pending against pronote.  pray the court to delcare debtor as insolvent and realise all the above 3 properties to pay creditors?  Is this insolvency proceeding reliable and completes with reasonable time? once summons are sent to debtor, he and his daughter will definitely sell the property 

1. I.P is for the court to decide whether the person is "indigent person" or not. file detail counter staing all the above  facts and place the documents for the proof. the court after trial will dismiss the petition.

2.  Yes, when the date of Gift deed is subsequent to that of the Pronote, the intention of transfer is Clear that, such transfer was to delay and defeat the creditor. such transfer willnot be bonafide under section 53A. the court will dismiss the I.P on merits.

3. YES, you may file suit for permanent injunction against the Borrower and her daughter stating the about fact, with the prayer not to alinate the property till the disposal of the suit. the court may order for joint trial, if satisfied. {money suit}

You may also issue a "General notice" to public on News Paper stating the same, to the Genreal publis not to purchase, such property being lispendense. Also you may file stay petition before the Registrar.

Also, what protect you, to file an "Attach before Judgment Petition" in the money suit on the property with the title deed of the borrower. The court May allow "A.B.J"  on the above facts.

 

Don't waste time, think this is the second time your posting such Query with an update. rush to your Lawyer {Civil side lawyer}

 

Ramesh   20 August 2017

thanks for your reply.  I spoke to my lawyer, he says -  in money suit, daughter is not party, so we cannot seek injunction.

With below documents, it is difficult to get ABJ:

1) EC has few entries like:  bank loan taken by debtor against agricultural land, transfer of land from debtor to daughter

2) I can get certified copy of the above transfer

3) patta showing daughter name

what is title deed ?

 debtor has admitted himself as insolvent and filed IP petition.   Can I file creditor IP against him?  this may block the debtor selling his properties.  pray the court to delcare debtor as insolvent and realise(auction) all his properties to pay all creditors?

file IA to order the attachment by actual seizure of his properties? order the debtor to give reasonable security for his appearance until final orders are made upon the petition, and direct that, in default of giving such security, he shall be detained in the civil prison

 Is this insolvency proceeding reliable and completes with reasonable time?

Please see https://cyberadvocate.in/mod/page/view.php?id=1272

May I pls speak to you, my number 928 310 6370


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