Creditor preference in asset transfers is not fraud where genuine debts are paid and no benefit is reserved to the transferor.

Section 53 of the Transfer of Property Act avoids a transfer only where immovable property is conveyed with intent to defeat or delay creditors and the transfer places the property beyond their reach for the transferor's benefit. A debtor may lawfully prefer genuine creditors over others, and such preference is not fraudulent if the transfer is for adequate consideration, satisfies genuine debts, and no benefit is reserved to the transferor. On the recorded findings, the sale proceeds were applied to the company's creditors, with no inadequacy of consideration or retained benefit. The transfer was therefore not voidable under section 53 and the challenge failed.

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Issues: Whether the impugned transfer of the company's assets was voidable under section 53 of the Transfer of Property Act, 1882 as made with intent to defeat or delay creditors.

Analysis: Section 53 avoids a transfer only where immovable property is transferred with intent to defeat or delay creditors and the transfer operates to remove property from their reach for the debtor's benefit. A debtor may lawfully prefer one or more genuine creditors over others, and such preference does not by itself amount to fraud under the section, so long as the transfer is for adequate consideration, satisfies genuine debts, and no benefit is reserved to the transferor. The findings recorded showed that the sale proceeds were applied in payment of the company's creditors, and there was no finding that the consideration was inadequate or that any benefit was retained by the company.

Conclusion: The transfer was not voidable under section 53 of the Transfer of Property Act, 1882, and the challenge to the sale failed.

Ratio Decidendi: A transfer made for adequate consideration in satisfaction of genuine debts, without reservation of any benefit to the transferor, is not voidable under section 53 merely because it prefers some creditors over others.

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