Fraudulent transfer can be resisted in execution litigation under Order 21 Rule 63 without a separate suit to set it aside.

A creditor defrauded, defeated or delayed by a transfer may avoid it under Section 53 of the Transfer of Property Act by an open and unequivocal act, without first bringing a separate suit to set it aside. In execution proceedings under Order 21, Rules 58 to 63 of the Civil Procedure Code, the claim-and-suit mechanism is intended to determine title quickly, and a suit under Rule 63 permits the decree-holder to defend the attachment by showing that the claimant's transfer is not binding because it is fraudulent as against the decree-holder. An attaching decree-holder may therefore raise Section 53 as a defence in the claimant's suit.

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Issues: Whether an attaching decree-holder, in a suit under Order 21, Rule 63 of the Civil Procedure Code brought after rejection of the claimant's claim, can plead in defence that the transfer in favour of the claimant is voidable as a fraudulent transfer under Section 53 of the Transfer of Property Act without first instituting a separate suit to set aside the transfer.

Analysis: The judgment holds that Section 53 of the Transfer of Property Act permits a creditor who has been defrauded, defeated or delayed to avoid the transfer by an open and unequivocal act, and does not require a separate suit as the exclusive mode of avoidance. The reasoning treats the creditor's attachment and resistance to the claimant's suit as a sufficient exercise of the option to avoid the transfer. It further explains that the purpose of the claim-and-suit procedure under Order 21, Rules 58 to 63 is the speedy settlement of title questions arising in execution, and that a suit under Rule 63 enables the parties to litigate the right claimed to the attached property, including the defence that the claimant's transfer is not binding because it is fraudulent as against the decree-holder.

Conclusion: An attaching decree-holder may plead, in defence to the claimant's suit under Order 21, Rule 63, that the transfer was fraudulent and voidable under Section 53 of the Transfer of Property Act, and a separate prior suit is not required.

Ratio Decidendi: A voidable transfer under Section 53 of the Transfer of Property Act may be avoided by an open and unequivocal assertion of the creditor's option, and that avoidance can validly be set up in defence in execution-related litigation under Order 21, Rule 63 of the Civil Procedure Code.

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