Every transfer of immovable property by way of sale made with an intention to defeat or delay the creditor of the transferor is voidable at the option of the creditor so defeated or delayed. This is what is stated in Section 53 of the Indian law of Transfer of Property.
If the transferee purchased the property after proper enquiries and in good faith and belief, the transfer is valid and he will not be liable.
However, the creditor can institute a suit against the transferor. If the transfer was made without sufficient consideration or with the intention to defeat or defraud the creditors, the transfer is voidable at the option of the transferee also.
The following are some of the essential elements of Fraudulent Transfer:
1. A transfer must be made by a debtor to a third person for consideration.
2. The intention behind the transfer was to defeat or defraud the creditors.
3. The transfer is voidable at the option of the creditor.
4. The creditor can file suit on behalf of himself and all other creditors.
5. If the property was purchased by the transferee in good faith, he will not be liable.