Fraudulent transfer

2022 CLD 821 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 74 & 126Transfer of share and other securitiesPower of Court to rectify Register of MembersFraudulent transferScope

Where a transfer deed is executed with the forged signatures of a transferee and then presented to the company for registration in the register; in such case, the company cannot question the genuineness or validity of the transfer deed, unless there is an apparent defect in the same, thus where the transfer deed so presented bearing the forged signatures of the transferee is presented to the company and the company proceeds to omit the name of the transferee shareholder and adds the name of the transferor on the basis of this fraud, then in such circumstances the name of the transferee member would have been omitted without his consent and snatched his legal title from him

Such a member shall have the remedy to appear before the appropriate forum, for cancellation of such a fake and bogus transfer deed and for rectification of the register under S. 126 of the Act.

2020 CLCN 48 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 2

Powers of Chief Settlement Commissioner/Notified Officer to cancel or terminate allotment or to amend or vary terms of allotment

Scope

Concealment of facts

Fraudulent transfer

Scope

Petitioner assailed order passed by Chief Settlement Commissioner whereby his application for correction in khata, by replacing the name of another with his name, was dismissed on the ground that his application was based on a bogus claim

Validity

Petitioner was a displaced person; a Claim Form was issued in his favour; he was held entitled to be considered for allotment of certain land subject to the proof that he was a genuine claimant but he did not make any application for allotment rather managed an entry in the revenue record

Another person, in the absence of petitioner, managed an entry in the same khata

Petitioner had concealed the fact that he had earlier filed another writ petition for entry in the same khata which was dismissed, as such, he had not come to the court with clean hands

Chief Settlement Commissioner, after consulting the record, had held that no original file of the claim ever existed

Fraud was committed in obtaining the allotment order against the bogus claim, as such, the Chief Settlement Commissioner had jurisdiction to reverse the allotment order

Constitutional petition was dismissed in limine, being devoid of merits.

2014 SCMR 33 SUPREME-COURT Judicial Precedent

S. 53Fraudulent transferScope

Section 53 of Transfer of Property Act, 1882 aimed to provide safeguard to the rights of a transferee of an immovable property where the sale was made with the intent to defeat the right of the transferee

Such a transaction was made voidable by operation of law and a person who had purchased the property in good faith and for consideration stood protected

Intention and fraud were to be determined from the facts considered in their totality

Conduct of parties prior, contemporaneous and subsequent would be relevant to decide if a transaction was hit by S. 53 of Transfer of Property Act, 1882.

2014 SCMR 33 SUPREME-COURT Judicial Precedent

Ss. 52, 41 & 53Lis pendens, principle ofApplicability and exceptionConsent decree obtained by collusionFraudulent transferScope

Defendant claimed to have purchased suit land from vendor vide agreement to sell dated 1-12-1969 and filed a suit for specific performance for such purpose, which was decreed by way of a consent decree dated 29-4-1972 after defendant and vendor reached an agreement

Plaintiffs (appellants) filed a declaratory suit contending that in fact they had purchased the suit land from the vendor vide registered sale deed dated 17-5-1971; that consent decree obtained by defendant was collusive and fraudulent, and that defendant had not impleaded them in his suit

Suit of plaintiffs was decreed by Trial Court, which decree was upheld by First Appellate Court

High Court, however, reversed concurrent judgments of courts below and dismissed the plaintiffs' suit on the basis that defendant was bona fide purchaser for consideration prior in time; that plaintiffs had purchased suit land during pendency of suit filed by defendant and transaction of sale with the plaintiffs was hit by the principle of lis pendens enshrined in S. 52 of Transfer of Property Act, 1882

Plea of plaintiffs was that principle of lis pendens would not be applicable in the present case as the suit and decree so obtained by defendant were collusive

Validity

Suit land was sold to plaintiffs vide registered sale deed dated 17-5-1971, and said transaction was duly reflected in the revenue record and possession of suit land was also delivered to the plaintiffs on the spot by revenue officer

At the time of consent decree obtained by defendant, dated 29-4-1972, the vendor was divested of his ownership qua suit land as the land already stood transferred to the plaintiffs vide registered sale deed dated 17-5-1971, thus vendor was left with no title on the date of consent decree to have consented to sell the suit land

Regarding applicability of principle of lis pendens, defendant failed to prove that plaintiffs had either knowledge of the agreement to sell between the defendant and vendor or that he was a bona fide purchaser

Consent decree obtained by defendant was collusive and principle of lis pendens was not attracted in the present case

High Court also did not advert to the exception to the principle of lis pendens provided in S. 41 of Transfer of Property Act, 1882 and failed to notice that plaintiffs had no notice either of the agreement to sell between defendant and vendor, or the pendency of the earlier suit filed by defendant, which culminated into a consent decree

Exception to the principle of lis pendens provided in S. 41 of Transfer of Property Act, 1882 was fully attracted in the present case as all its ingredients were satisfied, namely that there was documentary evidence to show that transfer of suit land was for consideration; that such transfer was made by an ostensible owner (i.e. vendor), and that plaintiffs had no knowledge of any prior agreement qua suit land

Plaintiffs were not even impleaded as a party by the defendant in his suit despite the fact that they had purchased suit land vide registered sale deed

Consent decree vide which vendor consented to selling suit land to defendant was on the face of it a fraudulent transfer also within the meaning of S. 53 of Transfer of Property Act, 1882 as suit land had already been transferred by vendor in the name of plaintiffs when he agreed to the consent decree

Such fraudulent transfer was voidable at the option of plaintiffs

Consent decree was an attempt to defeat the interest already acquired by the plaintiffs in the suit land

Impugned judgment of High court was set aside in circumstances and that of Trial Court was restored

Appeal was allowed accordingly.

2013 SCMR 146 SUPREME-COURT Judicial Precedent

S. 53Fraudulent transferWord "creditor", interpretation ofScopeWord "creditor" used in S.53 of Transfer of Property Act, 1882 was not to be construed in a narrow sense

Word "creditor" would mean and include the one, who had a right to require of another the fulfilment of a contract or obligation and/or one to whom another owed the performance of an obligation.

2013 YLR 1334 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.42Civil Procedure Code (V of 1908), S.115Suit for declarationConcurrent findings of fact by two courts belowFraudulent transferMisreading and non-reading of evidencePlaintiffs claimed that transfer of suit property in the name of defendants was a result of fraudBoth the courts below concurrently dismissed suit and appeal filed by plaintiffs

Plea raised by plaintiffs was that both the courts below ignored documentary evidence relied upon oral testimony of witnesses

Validity

Defendants failed to prove sale in their favour as well as they being bona fide transferees

Mode which was adopted by defendants for transfer of property in their favour was also important to be looked into, as one defendant became attorney of owner of suit property and sold property in favour of other defendant, who in turn gifted suit property to the attorney of the owner, such transfer was sufficient to prove fraud

Judgments and decrees passed by courts below were not only result of misreading and non-reading of evidence but also ignoring unrebutted documentary evidence, which was part of revenue record and pedigree table and the same had not been denied by defendants and their witnesses

Findings recorded by courts below against documentary evidence as well as ignoring law on the subject was nullity in the eye of law

High Court in exercise of revisional jurisdiction set aside concurrent findings of fact by two courts below and decreed the suit in favour of plaintiffs

Revision was allowed in circumstances.