Fraudelent Transfer of Property
Fraudelent Transfer of Property
Fraudelent Transfer of Property
1. Introduction
The principle of section 53 is based on the rule of justice, equity and good
conscience. The section enumerates fraudulent transfer. A transfer made with
intention to defeat any right of the transferee or of any other person interested
therein is called fraudulent transfer of property. Such transfer is not void but
voidable at the option of person named. The Transfer of Property Act, 1882 states
that any transfer of immovable property that is 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. When a person is burdened with huge debts and there is
a chance of institution of suit for recovery of debts against him, sells his
immovable property to avoid the chance of its attachment and sale for the
purpose of payment of the debt, such transfer is liable to be cancelled at the
option of the creditors, if the transferee has the knowledge of the fraudulent
intention of the transferor. Where a transfer of immovable is made without any
consideration with an intention to defraud a subsequent transferee, such transfer
shall be voidable at the instance of the transferee. However, such transfer should
not be held to be fraudulent by reason of any subsequent transfer for
consideration.
2. Relevant Provisions
3. Meaning of Fraud
4. Meaning of Transfer
Transfer means an act of the parties, or of law, by which the title to property is
conveyed from one person to another.
5. Meaning of Fraudulent Transfer
A transfer of property the object of which is to defraud a creditor or hinder or
delay him or to put such property beyond his reach is called Fraudulent Transfer.
To conclude, it can be stated that two points are important as far as fraudulent
transfer is concerned; first point is that transfer of property act has discussed
fraudulent transfer only in respect of immoveable property. And second point is
that person, who alleges fraudulent transfer, is under burden to prove fraudulent
transfer.