(1) If in the course of the hearing of an application made under section 4, the Court finds that the debtor has made an alienation of property or created any incumbrance thereon with intent to defeat or delay any of his creditors, the Court shall, by notice, summon the debtor and the person in whose favour the alienation or incumbrance is made or created to appear before it on a day to be specified in the notice.
(2) On the day specified in the notice or such other day to which the hearing may be adjourned the Court shall hear the parties 1[and record evidence as may be produced] and if it is satisfied that the alienation was made or the incumbrance was created with intent to defeat or delay any of the creditors of the debtor, the Court shall declare the alienation or incumbrance to be void.
(3) Nothing in this section shall impair the rights of an alienee or the holder of an incumbrance in good faith and for valuable consideration.
(2) On the day specified in the notice or such other day to which the hearing may be adjourned the Court shall hear the parties 1[and record evidence as may be produced] and if it is satisfied that the alienation was made or the incumbrance was created with intent to defeat or delay any of the creditors of the debtor, the Court shall declare the alienation or incumbrance to be void.
(3) Nothing in this section shall impair the rights of an alienee or the holder of an incumbrance in good faith and for valuable consideration.
Source footnotes
1. These words were inserted by Bom. 70 of 1948, s. 9.आगे पढ़ें / Continue reading
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More sections of this act
Section 1 · Short title and extent.Section 2 · Definitions.Section 3 · Savings.Section 4 · Application for adjustment of debts.Section 5 · Every creditor and debtor to file a true and correct statement before Court.Section 6 · Application by debtor jointly and severally liable.Section 7 · Assignees from non-debtor not entitled to benefit of this Act.Section 8 · Application for recording settlement.India Code, Government of India. Text fetched 17 Oct 2026. Check the linked official text and subsequent notifications when applying a provision.