The Transfer of Property Act, 1882 (Section 53) mentions fraudulent transfers. Every property owner has the right to transfer their property as per their wish. However, the transfer needs to be done with a bonafide intention. Where the transfer is done with a fraudulent intention, it means intending to defeat the interest of any subsequent transferee or interest of the creditor. Where the transfer is done with a fraudulent intention, the transfer’s order will be bad in the eyes of justice and equity, though it’s valid in law.
Now you know what is a fraudulent transfer
Essential Elements of a Fraudulent Transfer
Transfer of immovable property.
Made with the intent to delay or defeat the creditors of the transfer.
Shall be voidable at the option of the creditor so delayed or defeated.
However, the provisions of this sub-section shouldn’t affect:
Any law for the time being in force related to insolvency.
The rights of subsequent transferees in good faith for consideration.
Family settlement and partition aren’t transferred under this act, so this section may not apply to family settlement or partition.
Sham transfers mean Benami transfer/fictitious transfer, which is outside this section’s scope.
This section protects the interest of a creditor in case of only real transfer, which is made with a fraudulent intention. On the other hand, a sham transfer isn’t actually a real transfer.
This section is applicable to a transfer of immovable property only and not to a transfer of movable property.
This is all on what is fraudulent transfer.
Other Terms under the Transfer of Property Act:
What is exchange under Transfer of Property Act?
What is part performance in Transfer of Property Act?
What is immovable property under Transfer of Property Act?
What is lease under Transfer of Property Act?
I hope I cleared all your doubts regarding a fraudulent transfer.
What is a fraudulent transfer?
Garima
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2022-08-17T17:22:30+00:00 2022-08-17T17:48:55+00:00Comment
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