This section deals with property transfers done to cheat creditors. If someone sells their property to avoid paying their debts, the creditors can challenge that sale. However, if the person who bought the property did so honestly and paid for it, their rights are protected.
A owes money to several creditors. To avoid paying them, A sells his house to his friend B for a very low price. The creditors can sue to cancel the sale to B.
- •Creditors have the right to challenge property transfers made to avoid paying debts.
- •If you buy property in good faith and pay for it, your rights are protected even if the seller was trying to cheat creditors.
📒 Legal text sourced from The Gazette of India & AdvocateKhoj Bare Acts Library
⚖️ Content reviewed by Adv. Shailendra Babbar, Seasoned Advocate, with 31 years of legal practice
📚 Act Reference: Transfer of Property Act
Disclaimer: This content is for informational purposes only and does not constitute legal advice. Consult a qualified advocate for specific legal matters.