Pronote - money suit - injunction and ABJ

I gave 20 Lacs Loan to my Uncle and received pronote in Apr2014. In Aug2016 he took 10 Lacs Bank loan against his house ( Deposit of Title Deeds if loan is
repayable on demand). As I pressurised him to return money or face legal actions, in Dec2016 he transferred his 3 properties(house and two
agricultural lands) as "gift settlement" to his daughter, giving nothing to his 2 sons. He and his 2 sons along with their wifes and kids, continue to live
in the same house and farm the same lands.

In Dec2016, I issued lawyer notice and in Apr2017, I filed money recovery suit in my home district which is 700kms away from his home. He is yet to file the written statement. Now he has applied for insolvency listed me and 3 other creditors.

1) Uncle transferred his house(which is under bank loan) to daughter in Dec2016? Is this a fraud and who can file 420 criminal case against him?

2) I'm going to Contest and dismiss the IP. Can I file criminal cheating case against him for disposing the properties and then filing for insolvency?

3) Can I file IA along with money suite, seeking permanent injunction against the Borrower and her daughter, praying not to alienate the property till the disposal of the suit. Will I get injunction as the
a) property is in daughter's name not in defendant name?
b) property not in the jurisdiction of the court hearing money suite?

4) If above is not possible, Can I file IA seeking injunction in IP case?
Will I get injunction as the property is in daughter's name not in defendant name?

5) if above 3 and 4 are not possible, Can I file suite and pray court to void/set aside the fraudulent transfer of properties to daughter using section53 of TP act?
a) once voided, the property will be in uncle's name? Now apply IA seeking injunction?
b) Am I eligible to file this suit as I'm a creditor not a judgement creditor, as the money suit is pending against pronote.
c) file this suite in the court in my or his city?

6) what is the implication of set aside of the sale of property under section53 of TP act?
a) Further sale of property is blocked?
b) It will have an entry in encumbrance certificate? so buyers avoid on seeing the EC?

7) Can I file ABJ petition in money suite, seeking attachment of properties?
a) can I file ABJ at this stage(waiting for written statement) of money suite?
b) property is in daughter's name not in defendant name
c) property not in the jurisdiction of the court hearing money suite
d) file ABJ as seperate case in the court of borrower city?

8) Can I file creditor IP against him and pray court to auction his properties to pay creditors?
a) Am I eligible to file this suit as I'm a creditor not a judgement creditor, as the money suit is pending against pronote.
c) Is this insolvency proceeding reliable and completes with reasonable time?

Asked 6 years ago in Civil Law

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5 Answers

Under section 53 of transfer of property act Every transfer of immoveable 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

2) file suit to set aside fraudulent transfer and seek injunction restraining daughter from selling the property .file suit in your city

3) you can file cheating case against him under section 420 of IPC

4) inmoney suit daughter is not party you cannot seek injunction in the money suit restraining dame of property by daughter

5) you can file creditor IP against uncle .however Since you have filed recovery suit take insolvency proceedings on receipt of decree in recovery suit if uncle fails to make payment

Ajay Sethi

Advocate, Mumbai

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1. No, you can not file case u/s420 for this.

2.No criminal case lieson this.

3.yes you can do this.

4.Both is possible.

5.No

6.The sale can not be set aside.

7.Yes ABJ petition can be filed in the money suit.

8.No

Devajyoti Barman

Advocate, Kolkata

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1. Transfer of a mortgaged property without the permission of the mortgagee is an offence under section 406 and 420 IPC. However, the criminal case can be filed only by the bank.

2. You have no locus standi to file the criminal complaint, only the bank has.

3. Permanent injunction cannot be sought through an IA. You have to file a separate suit, but you can seek temporary injunction. Will you get it or not is something time will tell, we cannot predict the outcome with certainty.

4. You are free to file a suit to declare the transfer of properties made by him in favour of his daughters as sham and illegal. Seek temporary injunction also.

5. You cannot seek attachment in the money suit unless the decree is passed in your favour.

6. Creditor IP is not maintainable in the facts and circumstances mentioned by you. You have to bank on the recovery suit.

Ashish Davessar

Advocate, Jaipur

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1. The transfer of property by any deed when the property is under mortgage loan with the bank is not valid and is criminally motivated design which is not recognised as valid in law.

The bank will proceed with the recovery of loan as per law if there is a default in loan repayment, there is no need to file a cheating case.

2. You can contest the IP to the core but you cannot file any criminal complaint for his cheating activity.

3. The daughter is not a borrower hence she is nowhere liable for any repayment, therefore you cannot implead her as a party to the suit.

4. It may not be possible.

5. No doubt his transfer at this stage is illegal, but you have not confirmed that if the property was mortgaged with you before the transfer of the same to his daughter, how can you claim right over his property at this stage especially when it is under ,mortgage with bank for loan purpose.

6. He cannot sell the property once it is mortgaged to the bank for loan purpose, it will be invalid and illegal.

7. You can file ABJ along with the suit but the property should be on the defendant's name and not on any third party's name.

8. In IP you are a respondent. In money suit you are a plaintiff. You can participate in the IP and also prosecute the money suit.

T Kalaiselvan

Advocate, Vellore

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Thanks all for your guidance. Below questions are all about protecting the property from debtor selling. Thank you for your patience and time.

1) Does Section 52 doctrine of Lis pendens apply, when the property is sold during:
 - pending "set aside" suit?
 - pending seperate suit for permanent Injunction order
 - after above Injunction is issued
 - pending IA petition in money suite for temporary Injunction 
 - after above Injunction is issued
 - pending ABJ petition in money suite for attachment
 - after above attachment is issued

2) I file the "set aside" suit, what if the debtor sells the suit property:
 a) after filing the suit but before receiving the summons?
 b) after receiving the summons but before filing vakalat?
 c) when does the section 52 starts its action? 

3) Once the court orders to "set aside" the transfer,
 a) Does the title of property will go back to uncle's name?
 b) Should I file Injunction or ABJ petition for uncle property in money suit?
 c) which is more powerful in securing the property? ABJ or Injunction?

4) Money suits are pending against 5 pronotes, 2 Lands in uncle name
For the same property, Can I seek ABJ in one money suit and injunction in another money suit? 
Debtor will be in trouble if he breaches multiple injunction

5) what if the debtor sells the property after filing IA and BEFORE injunction order is passed?
 section 52 will apply? after the injunction order is issued, the sale of property can be set aside?
But, IA for injunction is just a petition, not a suit, and the subject of matter is not dispute in property
Similarly, Does section52 apply when property is sold while ABJ petition is pending?

6) what if the debtor sells the property AFTER injunction order is passed? 
 a) Order 39, Rule 2-A will ALONE apply? or section52 will also apply, making sale void?
 b) breach of injunction - court may order the property of the person to be attached
 > property sold will be attached? 
 > remaining property of person who violated the injunction order, will be attached?
	 > what if this person does not have any other property?
	 > person had just ONE property and sold it? 
 c) the property sale is void? the buyer of property loses his money? 

7) How to get injunction against the sub-registrar restraining him from registering the property? 
 > file a seperate suit?
 > how to include sub-registrar as a party in the money suit or set aside suit?

8) ABJ petition and money suite are usually filed together. Money suite was filed 5months ago. 
 a) can I file ABJ at this stage(waiting for defendant to file written statement) of money suite?
 b) property is in different district, not in the jurisdiction of the court hearing money suite
 c) if above is not possible, Can I file ABJ as seperate suit in the court of borrower city, citing the money suite in my city?

Asked 6 years ago

In Hardev Singh v. Gurmail Singh the Supreme Court observed that Section 52 of the Act does not declare a pendente lite transfer by a party to the suit as void or illegal, but only makes the pendente lite purchaser bound by the decision of the pending litigation. Thus, if during the pendency of any suit in a court of competent jurisdiction which is not collusive, in which any right of an immovable property is directly and specifically in question, such immovable property cannot be transferred by any party to the suit so as to affect the rights of any other party to the suit under any decree that may be made in such suit.

2) section 52 would be applicable to any transfers made after filing suit

3) in case court orders setting aside transfer tile in property vests with uncle

4) you can seek ABJ if you are able to prove that debtor is seeking to sell the property

5) you can seek injunction restraining sale of property pending hearing and final disposal of suit

Ajay Sethi

Advocate, Mumbai

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Pronote - money suit - injunction and ABJ

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