Question

Which of the following does not constitute Fraudulent transfers?

• A. Transfer made with the intent to defeat or delay creditors
• B. Transfer under Art 53 of Transfer of Property Act
• C. Involuntary Transfers
• D. Preference of one creditor to another with debtor retaining benefits

Hint:

Section 53 does not impair the rights of a transferee in good faith and for consideration.
Such transfers are protected even if the transferor had fraudulent intent.

Answer 1

The Correct Option is C

Step 1: Understanding the Question:
The question asks to identify which of the listed options is excluded from the scope of "Fraudulent transfers" under Section 53 of the Transfer of Property Act, 1882.

Step 2: Detailed Explanation:

• Section 53 of the Transfer of Property Act, 1882: This section governs fraudulent transfers.
It states that every transfer of immovable 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.

• Voluntary vs. Involuntary Transfers: Section 53 applies only to voluntary transfers executed by the act of parties.
It does not apply to involuntary transfers (such as court-ordered auction sales, execution of decrees, or statutory sales), as these are actions of the court or law and not the debtor's voluntary acts.

• Preference of Creditors: While merely preferring one creditor over another is generally not deemed fraudulent under Section 53, if the debtor retains a secret benefit while preferring a creditor, it may be deemed a fraudulent transfer.

Step 3: Final Answer:
Involuntary transfers do not constitute fraudulent transfers under Section 53 of the Act, which makes Option C the correct choice.