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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Armstrong & Anor v Bhattacharya & Anor [2025] EWHC 597 (Ch) (14 March 2025) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2025/597.html Cite as: [2025] EWHC 597 (Ch)

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IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)

IN THE MATTER OF BIRAJA PADA BHATTACHARYA
AND IN THE MATTER OF SUSMITA BHATTACHARYA
AND IN THE MATTER OF THE INSOLVENCY ACT 1986

		Rolls Building Royal Courts of Justice 7 Rolls Buildings London EC4A 1NL
		14 March 2025

This judgment was handed down remotely at 10.30am on 14 March 2025 by circulation to the parties or their representatives by e-mail.

ICC JUDGE GREENWOOD:

Introduction

1. This was the trial of two applications made on 15 December 2023 by the joint trustees in bankruptcy of the Respondents, Mr Biraja Pada Bhattacharya ("Mr Bhattacharya") and his wife, Mrs Susmita Bhattacharya ("Mrs Bhattacharya"), both of whom were declared bankrupt on 21 February 2022, on creditors' petitions presented by Mr Khalid Baig and Mrs Zanieb Baig on 10 January 2022, based on a debt in the sum of £690,550, payable under a loan agreement made by deed on 1 January 2013. An application to set aside the statutory demand previously served by the creditors on 22 February 2017 had been dismissed by ICCJ Mullen on 21 July 2020 (at a hearing at which the Respondents were represented by Mr David Berkley QC of counsel) and their appeal against that decision, having been twice adjourned, had been struck out automatically on 8 December 2021, as a result of their failure to pay a costs order.
2. Since they were made bankrupt, the Respondents had twice applied, unsuccessfully, to annul the bankruptcy orders, first on the basis, essentially, that the petitions had not been served on them (and they were solvent), and second, on substantially similar grounds, combined with various complaints about the debt claimed by the Baigs. Both sets of applications were dismissed by ICCJ Burton, on 29 March 2023 and 15 April 2024 respectively. Moreover, the second applications were marked as having been totally without merit, having been made (according to a recital in the Order) "largely … to relitigate matters that were decided" on the previous applications.
3. At the beginning of the present trial, I heard and summarily dismissed (for reasons explained in a separate ex tempore judgment) a third annulment application (made by each of the Respondents, represented for that purpose only by Mr Angus Gloag of counsel) made by notice dated 26 February 2025, again on grounds that had either previously been decided or which it was now abusive to seek to raise. Again, I marked those applications as having been totally without merit, and in the circumstances (for reasons set out in a further, separate ex tempore judgment, on the third day of the trial) I made limited civil restraint orders against both Respondents.
4. The Respondents were due to be discharged from bankruptcy automatically, on 21 February 2023. However, on 23 January 2023, ICCJ Barber made interim suspension orders against both Respondents, and in the event, it was not until 12 December 2023 that Mrs Bhattacharya was discharged from bankruptcy; by virtue of an order made by ICCJ Burton on 29 March 2023, Mr Bhattacharya's discharge continues to be suspended.
5. The applications concerned, first and primarily, a valuable freehold property at 100 Redcliffe Gardens, London SW19 9HH ("the Property") said by the Applicants to have been jointly and wholly owned by the Respondents when they were made bankrupt, and second, various items of property said to have vested in the Applicants under section 306 of the Insolvency Act 1986 ("the IA 86") but which were nonetheless retained or not delivered up by Mr and/or Mrs Bhattacharya, in particular: £7,700 received post-bankruptcy in respect of the sale of Mr Bhattacharya's BMW car; £20,936.55 received from the sale or pawning of certain items of jewellery; £7,741.00 received by Mr Bhattacharya from solicitors, Lovell Son & Pitfield (which was said to be after-acquired property within section 307 of the IA 1986); and rental monies received by the Respondents in respect of the Property since they were made bankrupt, in respect of which an account was sought.
6. In respect of the Property, orders and relief were sought under section 14 of the Trusts of Land and Appointments of Trustees Act 1996 ("TOLATA 1996") and section 335A of the IA 86, for vacant possession and sale. Those claims were opposed, essentially on grounds that parts of the Property were beneficially owned by the Respondents' daughters. In respect of the second group of items and relief, the Respondents neither adduced any evidence in opposition, nor made any submissions. They were effectively unopposed, and I shall therefore deal with them only briefly, to the extent necessary to justify the orders sought.
7. The applications were supported by two witness statements made by the Respondents' former joint trustee, Ms Joanne Wright (who was replaced by Mr Geoffrey Bouchier under a block transfer order dated 10 December 2024, and as an Applicant, by a further order that I made during the trial, on 5 March 2025).
8. In opposition, Mr. and Mrs. Bhattacharya made three joint written "witness statements", albeit not in a form compliant with the provisions of CPR PD 32 – for example, none contained a statement of truth.
9. In the event, the court heard oral evidence from Ms Wright (very briefly, in order to correct a minor inaccuracy, but without cross-examination) and Mr and Mrs Bhattacharya, both of whom were cross-examined, Mr Bhattacharya at greater length than his wife. No point was taken in connection with the form of the Respondents' written evidence.

The Property

10. The Property is a large Victorian building in the Borough of Kensington and Chelsea, divided into six separate flats: the Lower Ground Floor Flat ("the LGFF"); the Ground Floor Flat ("the GFF"); the First Floor Flat ("the 1^st FF"); the Second Floor Flat ("the 2^nd FF"); the Second Floor Studio Flat ("the Studio"); and the Third Floor Flat ("the 3^rd FF").
11. According to a valuation produced for the Respondents by Savills dated 2 August 2022, it was at that time worth about £6.5 million. Two other valuations produced for the Respondents at about the same time, by TLC and Dexters, were in similar terms. Moreover, in 2017, the Respondents appear to have marketed the Property for sale at £6.5 million, and indeed, at a later time, to have agreed a sale (which was not completed) with one Mahmoud Agha, for £5.15 million. In that regard, in evidence, was a written contract of sale dated 16 September 2020, which named the Respondents as the owners and sellers of the freehold title and which was signed by them both.
12. The Respondents themselves live in the 1^st FF (which they accepted that they own) and their daughter, Bishnupriya Bhattacharya ("Bishnupriya") lives in the 2^nd FF and the 3^rd FF.
13. The other parts of the Property apparently are and have been occupied by various tenants under leases made with the Respondents as landlords. In that regard (at least as to the present position and the identity of the tenants over time, the trustees not having been able to inspect inside the Property) the evidence was incomplete, but in broad terms, regarding these arrangements, there was no dispute.
14. Thus, in evidence were two "Tenancy Agreements" made on 20 April 2023 by the Respondents (whilst bankrupt) as landlords, with Waynestays Limited, in respect of both the LGFF and the GFF. Also in evidence was a "Commercial Lease Agreement" in respect of the LGFF which they made with Messrs Aleksander Bekker and Tabik Adrian on 25 February 2023, but which appears to have generated a dispute (brought to the trustees' attention by the tenants) as a result of Mr Bhattacharya having changed the locks and excluded the tenants on the first day after making the Agreement, but nonetheless (allegedly) wrongfully having retained payments of rent and deposit amounting to about £18,000. In cross-examination, Mr Bhattacharya said, "I had to change because they're using it as an Airbnb and he said that he'd come down, "I'll beat you up." So I had to all change lock".
15. The Property is subject to a registered charge created by a charging order made on 29 January 2018 (and made final on 25 May 2018) by the County Court at Central London in favour of Pivot Finance LLP ("Pivot") and Horizon Invest Ltd ("Horizon"), and registered on 14 February 2018.
16. Pivot originally provided a loan to the Respondents which was secured by a legal charge made and registered in respect of a different property, 27 Sussex Lodge, Hyde Park Corner, W2 2SQ ("Sussex Lodge"). Following the sale of Sussex Lodge, the outstanding sum nonetheless owed to Pivot by the Respondents (£736,4013.97) was secured by way of the charging order made in respect of the Property, having been ordered to be paid under a judgment dated 5 April 2017.
17. As part of the original loan application made to Pivot by the Respondents, they provided a statement of their assets and liabilities, which included the Property, valued at £6.5 million (subject to a mortgage in the sum of £4.5 million). Similarly, in respect of previous borrowing, from Bridgeco Limited in 2013, also secured by a charge over the Property, the Respondents produced a statement of assets and liabilities including the Property, valued at £6.5 million, subject to a mortgage at that time in favour of Omni, in the sum of £3.1 million.
18. In December 2023, the trustees produced a total costs and liabilities statement which estimated that the full amount required to settle (at that time) the costs, debts and liabilities of the bankruptcies was £7,075,114. Although that calculation is now historic (further liabilities having been incurred since then) it was plain that the estates are not solvent. Ms Wright's evidence (in December 2023) was that it was reasonable to estimate that the available equity in the Property was about £4,748,448.76. Ms Sleeman told the court that were the Property to be sold at what is thought to be its market value (and assuming it to be owned by the Respondents) there would be a dividend to creditors in the sum of about 50 pence/£.

The Land Registry Records

19. The Property is comprised within a single freehold title, number 339758. As at the date of their bankruptcies, the Proprietorship Register stated that the Respondents were the sole proprietors, and that they had acquired title absolute on 6 March 2008 in return for a payment of £900,000 made on 18 February 2008. The Charges Register recorded the charge in favour of Pivot and Horizon.
20. Historic copies of the Register showed as follows.

20.1. Prior to the acquisition of the freehold title by the Respondents in 2008, discrete registered leasehold titles had existed in respect of:

20.1.1. the 1^st FF: title number NGL619638; 99 years from 24 June 1986; acquired by the Respondents on 17 June 1988;

20.1.2. the 2^nd FF: title number NGL619774; 99 years from 24 June 1986; acquired by the Respondents on 28 June 1989, but in respect of which, from 21 July 2006, the registered proprietors were Mr Bhattacharya and Bishnupriya; and,

20.1.3. the 3^rd FF: title number NGL577198; 99 years from 24 June 1986; acquired by the Respondents on 22 September 2005, having been bought by them for £475,000, paid on 28 January 2005.

20.2. In 2008, each separate leasehold interest and title was extinguished when the Respondents acquired the freehold.

20.3. The form "TR1" dated 18 February 2008 by which freehold title to the Property was transferred to the Respondents expressly stated that it was transferred to them "to hold … on trust for themselves as joint tenants"; it made no reference to their daughters, or to any other person.

20.4. On 19 February 2008 - the day after the Respondents had acquired the freehold title - by a formally drafted Deed of Surender signed by both Mr Bhattacharya and Bishnupriya, they together transferred and surrendered the extant leasehold interest in respect of the 2^nd FF to the Respondents, the freehold owners, "for the residue of the term to the intent that the term may merge and be extinguished in the reversion immediately expectant on it which is registered under title number 339758". There was no dispute that the other leasehold interests had also been extinguished.

20.5. Since then, the Register does not record any further transfers or the creation of any separate or further titles, and Mr Bhattacharya accepted that no Deed or Deeds of Trust had been created.

The Respondents' Case in respect of the Property

21. It was not an entirely simple process to discern the Respondents' case. However, in closing, Mr Buston of counsel, who appeared for the Respondents (as I understood it, having only been instructed at 10.00 pm on 5 March 2025, after the trial had begun) explained it as follows, albeit without reference to any authority, or in any greater detail:

21.1. the context is a close-knit family, in which certain meaningful arrangements were made for the benefit of the Respondents' children, Bishnupriya and her sister, Nayantara Bhattacharya ("Nayantara"), but informally, without legal assistance;

21.2. the Property is physically divided into the six units that I have described;

21.3. the LGFF, whilst "promised" to Nayantara at some future point, as being for her eventual benefit, or as part of her eventual share in the Property, possibly as part of her inheritance on the Respondents' death, had nonetheless not in fact been transferred to any degree, and therefore, it was accepted, belonged to the Respondents; Mr Bhattacharya's evidence was that this promise made to Nayantara, was a result of Mr David Berkley QC having given the Respondents some sort of advice that the position as between the daughters would otherwise be unfair, because Bishnupriya would have a greater share of the Property than her sister;

21.4. it was accepted that the 1^st FF is also owned by the Respondents, and is occupied by them;

21.5. the 2^nd FF was promised or gifted to Bishnupriya on her 18^th birthday, in March 2001, although it was not until 2006, as reflected in the Land Registry documents, that she became a co-owner of the 99 year leasehold interest that then existed in that part of the Property;

21.6. when the Respondents acquired the freehold on 18 February 2008, and the leasehold interests were extinguished, Mr Buston said that Bishnupriya's "equity in that lease wouldn't have been surrendered for no reason, for no consideration, but it was surrendered and any equity that [Bishnupriya] had in the [2^nd FF] would have transferred to the new title and she would have held that equity and so we say, as a result of that, a resulting trust was created in respect of [the 2^nd FF]", meaning that the TR1 was "incorrect", being "purely a decision around borrowing", made to enable the Respondents to give security;

21.7. in that respect, on 18 February 2008, the Respondents, as borrowers, entered into a Legal Charge with the Bank of Scotland, by which with "full title guarantee" they charged their freehold interest in the Property in favour of the Bank, presumably in order to fund the acquisition of the freehold;

21.8. the GFF and the 3^rd FF are beneficially owned, respectively, by Nayantara and Bishnupriya, on a resulting trust or trusts, as a result of a transaction which took place in 2012, by which they were each given £750,000 by Mrs Bhattacharya's sister, Mrs Sanjukta Ghosh, which they allowed to be used to discharge secured borrowing on the Property, and in consequence of which they acquired the beneficial interests in question.

22. There was no witness evidence from either of the Respondents' daughters, both of whom were served with the Applications and evidence, or from Mrs Ghosh, and there was no documentary evidence referred to in support of the resulting trust case advanced in connection with the 2^nd FF.
23. In respect of the 2012 transactions, the documentary evidence comprised the following.
24. First, in October 2012, a property known as the Gresham Hotel in London was sold. The property was, apparently, owned ultimately by a company called Mode Investment International Ltd, incorporated in the BVI, in which Mrs Ghosh had an interest. In respect of the sale, there were two versions of a completion statement in evidence (both produced by the Respondents) each dated 29 October 2012, and prepared by AKL Solicitors.
25. Both versions of the completion statement referred to a payment to Mr Bhattacharya in the sum of £900,000, and an unspecified payment to "Bhattacharya" of £50,000.
26. Then, on one version, it was recorded that £1,500,000 was "Held for reduction of mortgage 100 Redcliffe", and on the other, two payments were stated to have been made to "OMNI Capital Partner" in the sums of £1,250,000 and £249,304. Also exhibited by the Respondents was a short term bridging loan offer document from Omni Capital Partners Limited dated 6 February 2012, which related to a loan obtained by the Respondents in 2012, under which Omni was granted a first legal charge over the Property. Whilst impossible on the evidence to know which of the two versions of the completion statement was correct, it appeared from these documents that at least some of the proceeds of sale from the Gresham Hotel were used to reduce the sum due to Omni in 2012, and secured on the Property.
27. Second, the Respondents produced a copy of a letter, said to be from Mrs Ghosh, and signed by her on 1 August 2020, as follows:

This is to Confirm that I am Nayantaras and Bishnupriya Bhattacharyas Aunt

I Live in India permanently I lived in UK and Germany

I initially held 70% shares in Mode House Investment International Ltd BVI and the 45% shares I sold the 25% interest to Mr Baig Who willingly bought the shares and wanted to Invest in The Freehold which owns the Hotel

On 29 October 2012 we sold the Investment. The company owed me nearly £1,500,000

This I requested the solicitors to reduce Mortgage with Omni. To each of my Nieces I gifted £750,000 each. Therefore on sale each will receive £750,000 I did not register the charge of £1,500,00 against the property as I trust my Sister and her Husband implicitly

28. That letter was not consistent with the Respondents' case, because it purported to record that whilst Mrs Ghosh was owed £1.5 million, she had not seen any need to agree security, and that her (merely) personal right to repayment had been given to Bishnupriya and Nayantara.
29. Third was a "Deed of Gift" dated 1 December 2012, said to have been made by Mrs Ghosh (but unsigned by her) in favour of Bishnupriya and Nayantara (and signed by them, but unwitnessed). The document stated that Mrs Ghosh gave £1.5 million to Bishnupriya and Nayantara. It made no reference to the Property, or to any proprietary rights or interests.

The Respondents' Previous Inconsistent Cases in respect of the Property

30. The case described above, was not the same as the case (in fact, cases) previously advance by the Respondents in respect of the Property.
31. For example, in a statement produced on 9 March 2023, in response to an order made by ICCJ Jones on 18 January 2023 under section 366 of the IA 86, they said:

The ground floor is occupied and rented by [Nayantara] as that was gifted to her and therefore her flat. ….

Second and third floor [is occupied] by Bishnupriya Bhattacharya the flats were given to her on her 18^th birthday on 5^th March 2001, apart from gift deed, it's reported in a high court case by a witness statement of Bishnupriya and Mrs Susmita Bhattacharya, further witnessed by David Berkley QC (KC) in his Chamber in June 2017.

32. In that explanation, there was no reference to the alleged acquisition by payment in 2012, and the parts owned by Bishnupriya were both said to have been acquired by her in 2001 (although apart from anything else, the 3^rd FF was not acquired by the Respondents until 2005). In addition, in a different part of the same statement, Mr Bhattacharya said that the GFF had been gifted to Nayantara on 8 February 2008.
33. In a further response, Mr Bhattacharya said in a witness statement made on 2 May 2023, that the 3^rd FF was "bought" by Bishnupriya on 16 February 2008 for £750,000, and that the GFF was "gifted" to Nayantara. If and to the extent that a "sale" was alleged in respect of either the GFF or the 3^rd FF, I was not shown any document said to have complied with the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Subsequently, in his private examination, on 9 August 2023, Mr Bhattacharya said that the 2012 transaction took place on 12 April 2012.
34. In their written evidence in the present proceedings, the Respondents appeared to assert the existence of some sort of a discretionary trust of which they were the trustees, (possibly in favour of the Bank of Scotland) formed on 1 December 2008 (possibly on 1 December 2012 – there was some inconsistency) and under which they sold part of the Property to their daughters (the GFF and the 3^rd FF) and used the proceeds to pay secured borrowing. They also asserted that the Property was held by themselves on trust, but as partners. Neither of those variations was advanced by Mr Buston, and neither was supported by a document: there was no trust deed, and no partnership agreement.
35. Having said that, I note that in her second witness statement, Ms Wright commented on a document produced by the Respondents, which purported to be a draft letter from the Bank of Scotland dated 3 January 2008, which appeared to offer a term loan facility of up to £5,200,000 to the Bankrupts "as partners and trustees of the partnership of B P and S Bhattacharya". There were however, as explained by Ms Wright, a number of serious issues in respect of the document (of which no final version was ever produced in evidence) including that when investigating the properties of the document, the author was an individual named "Lisa", and yet the last user to have modified the document was an individual named "Biraja" and the "creation date" was specified as 19 September 2023, whereas the "Last Printed" date was 9 January 2008. Ms Wright – who was not cross-examined – expressed a suspicion that the letter had been amended by Mr Bhattacharya on 19 September 2023 and could not "be relied upon as a true representation of the parties' intentions". Certainly, although I was not asked to make any specific finding, there was some reason for her suspicions.
36. The Respondents' position in closing was therefore inconsistent with that previously asserted, including in their evidence in these proceedings.

The Further Documentary Evidence

37. In 2018 and 2019, in proceedings in the Central London County Court between Fern Trading Limited and the Respondents, each of the Respondents made a witness statement in which they said, explicitly, supported by a statement of truth, that they had joint legal and beneficial ownership of the Property. There was no suggestion of either daughter having enjoyed some variety of beneficial interest. In cross-examination, Mr Bhattacharya said that whilst he had signed the statement, it was "incorrect to that extent, yes".
38. Furthermore, in August 2020, each of the Respondents produced and signed a proposal for an individual voluntary arrangement (with professional assistance and supported by a declaration of truth) although in the event, neither proposal was pursued (or therefore voted on by creditors). In their proposals, each of the Respondents listed the Property as one of their assets, and confirmed that it was jointly and equally owned, both legally and beneficially. Furthermore, both said that Bishnupriya and Nayantara were unsecured creditors, in sums of £2 million and £2.115 million respectively, and had previously, before the acquisition of the freehold and the loan from the Bank of Scotland, "owned flats in the same building". The composition of the debts was not explained, but seemed to incorporate the sum of £1.5 million subsequently used to repay borrowing. But in any event, the proposals contained no suggestion that either daughter had a beneficial interest in the Property.
39. In cross-examination, Mr Bhattacharya said: "You know, IVA proposal, if I have to settle, I have to settle with my daughters as well. So therefore the money that they have put in had to be repaid to them as part of the total money that I'll have as a pot. They were not registered in the HM Land Registry. So they came in as unsecured creditors with other creditors whose names are there."

Discussion and Conclusions in respect of the Property's Ownership

40. For the following reasons, in my judgment, the Property was wholly co-owned, both legally and beneficially, by the Respondents, when they were made bankrupt. I therefore reject their case that to some or any extent, their daughters have beneficial interests in the Property, or parts of the Property, under resulting trusts.
41. First, the Land Registry records, the TR1 dated 18 February 2008, and the Deed of Surrender dated 19 February 2008, were consistent only with the Applicants' case, that from the date of acquisition of the Property's freehold, the Respondents alone owned the Property, and that Bishnupriya's previous interest in the leasehold interest (and the leasehold interest itself) was deliberately and effectively extinguished and surrendered. The Respondents' suggested explanation of the reasons for that event - that it enabled them to charge the Property in favour of the Bank of Scotland, as security for borrowing – did not assist their case; on the contrary, it fundamentally contradicted it, because it showed that their acquisition of the entire ownership was deliberate, and necessary.
42. Second, all of the documents created subsequently, including statements made formally by the Respondents supported by a statement of truth, were to the effect that they alone and together owned the whole Property, in particular: the witness statements made in 2018 and 2019 in the proceedings against Fern Trading Limited; the 2020 IVA proposals; the various tenancy agreements; and the statements of assets and liabilities which were produced by them for Pivot and Bridgeco.
43. Third and connectedly, as I have explained, the Respondents' case in respect of the Property has changed, and has been expressed inconsistently, in a variety of different forms. Even in the course of his cross-examination, Mr Bhattacharya made a completely new and unheralded allegation (unsupported by any documents) that in addition to the £750,000 in effect paid by each daughter, there had been further payments of £100,000, made by each: "Later on, I have not got the date yet, there's a statement somewhere to show the £200,000 we received and that is £100,000 from Bishnupriya and £100,000 Nayantara. The money came from Bishnupriya." Those contradictions further undermined the likelihood of the case eventually settled upon.
44. Fourth, in connection with the alleged 2012 transaction, the evidence was insufficient either to show what in fact had happened, or that the Respondents' daughters had acquired an ownership interest of some sort. Indeed, the letter from Mrs Ghosh suggested that she had acquired an unsecured personal right to payment of £1.5 million, which she had given to the Respondents' daughters. The Deed of Gift was unsatisfactory as a document - it was not signed by Mrs Ghosh, and not witnessed, and it post-dated the alleged transaction – but in any event, was consistent with the content of the letter, that Mrs Ghosh had sought to give Bishnupriya and Nayantara, her right to payment of £1.5 million. Furthermore, that outcome was consistent with the Respondents' IVA proposals, which expressly characterised the daughters' rights (including, apparently, in respect of the sum of £1.5 million) as merely personal, and unsecured.
45. Fifth, in any event, the legal basis of the Respondents' case was not supported by any cited authority, or to any extent developed by counsel: in all the circumstances that I have described, it was not enough to assert baldly that resulting trusts somehow sprung into existence in 2008 and/or 2012. For example, the suggestion that albeit comprised within a single freehold property, certain parts of the physical building could be held on trust for the daughters, was simply not explicated.
46. Sixth, there was no evidence from either Bishnupriya or Nayantara, or indeed, from Mrs Ghosh, and no explanation of any reason for its absence. Neither Bishnupriya nor Nayantara applied to be joined to the proceedings, and neither of them expressed any formal opposition. As a matter of common sense, the court is able draw adverse inferences from the absence of evidence which it might otherwise expect to be produced. In this case, the absent evidence would have been important and highly material to the Respondents' case: its unexplained absence yet further undermined the case that anyone other than the Respondents has any interest in the Property.
47. Finally, turning to the Respondents' oral evidence:

47.1. whilst Mr Bhattacharya (by profession, an accountant) sought to maintain his daughters' interests, his evidence suffered from the problems of his case more generally: it was contrary to the documents, to his own sworn statements, and to various other manifestations of his case, as he must have known, given his professional training and experience; it was therefore unconvincing, and I treated it with very great caution; in addition, as I have said, the trustees had unresolved concerns about the possibility that Mr Bhattacharya had tampered with some of the documentary evidence;

47.2. on the other hand, Mrs Bhattacharya repeatedly and readily agreed with Ms Sleeman, that her previous statements, albeit inconsistent with the Respondents' case in these proceedings, were in fact completely accurate, for example, her witness statement in the Fern proceedings, and her IVA proposal. So, in relation to the witness statement, she was asked whether the statement that she and her husband owned the entire legal and beneficial interest was correct, and she answered, "Yes, of course", and that after the acquisition in 2008, "the whole property then belonged to us".

48. In the circumstances, Mr Buston was constrained to say that Mrs Bhattacharya had simply not understood the questions, or the meaning of "legal" and "beneficial" ownership, and the distinctions between them. That suggestion was, in my judgment, quite likely. Mrs Bhattacharya is an intelligent and educated person, but not legally trained. Her answers were essentially guileless – but seemed to describe a close-knit family, in which her daughters were given to understand, as is not perhaps uncommon, that at some future point, the benefit of their parents' wealth - in this regard, the Property - would come to be shared fairly between them. Whilst that may be so, it was not an understanding that translated into any legal consequence, or which was therefore capable of surviving the unhappy consequences of their parents' insolvency and bankruptcy, and the intervention of the rights of their parents' creditors.
49. In the circumstances, in my judgment, the evidence was overwhelming: the Respondents were, exclusively, as at the date of their bankruptcies, the legal and beneficial owners of the whole Property. Their interests thus vest in the Applicants as their trustees, by virtue ultimately of section 306 of the IA 86.

The Application for Possession and Sale

50. Section 14 of TOLATA provides that any person who has an interest in property subject to a trust of land may make an application to the court, and on any such application the court may make any such order as the court thinks fit, relating to the exercise by the trustees of any of their functions and declaring the nature or extent of a person's interest in the property subject to the trust.
51. Section 335A of the IA 1986 applies (in place of section 15 of TOLATA) where any application for an order for sale of land under section 14 of TOLATA is made by a trustee in bankruptcy. It provides that on any such application the court shall make such order as it thinks fit and reasonable having regard to:

(a) the interests of the bankrupt's creditors;

(b) where the application is made in respect of land which includes a dwelling house which is or has been the home of the bankrupt or the bankrupt's spouse or civil partner or former spouse or former civil partner—

(i) the conduct of the spouse, civil partner, former spouse or former civil partner, so far as contributing to the bankruptcy,

(ii) the needs and financial resources of the spouse, civil partner, former spouse or former civil partner, and

(iii) the needs of any children; and

(c) all the circumstances of the case other than the needs of the bankrupt.

52. Section 335A(2) must be read in conjunction with section 335A(3), which provides that where an application is made (as in the present case) after the end of the period of one year beginning with the first vesting of the bankrupt's estate in a trustee under Chapter IV of Part IX of the IA 86, the court shall assume, unless the circumstances of the case are "exceptional", that the interests of the bankrupt's creditors outweigh all other considerations.
53. In those circumstances, the Applicants sought an order for vacant possession to be given within four weeks, and that the Property be sold.
54. In response to this part of the Application, on the basis of additional evidence given orally (which I permitted) the Respondents sought to establish that the circumstances were indeed "exceptional". In particular, they relied on the following (albeit without any independent expert or medical evidence):

54.1. that Mr Bhattacharya had undergone knee replacement surgery, and can no longer drive, or easily manage stairs; that he has had an operation for a fistula, and finds it hard to sleep at night;

54.2. that Mrs Bhattacharya has suffered some problems with her heart, and is soon to have a pacemaker inserted; that she is a type 2 diabetic; and that she has some spinal and mobility issues;

54.3. that their GP is local and good, and their established social life and friends are also nearby; when asked how she would manage were she compelled to move far from her home, she said that she would "probably drop dead";

54.4. that the Respondents are both somewhat elderly, both in their 80s; they have lived at the Property for over 35 years.

55. In respect of the test for exceptionality, I was referred to the judgment of Lawrence Collins J (as he then was) in Re Mushtaq Hussain Dean [2004] EWHC 3315, at [6]-[11]:

6.  The principles which can be derived from the authorities may be summarised as follows. First, the presence of exceptional circumstances is a necessary condition to displace the presumption that the interests of the creditors outweigh all other considerations, but the presence of exceptional circumstances does not debar the court from making an order for sale.

7.  Second, typically the exceptional circumstances in the modern cases relate to the personal circumstances of one of the joint owners, such as a medical or mental condition.

8.  Third, the categories of exceptional circumstances are not to be categorised or defined and the court makes a value judgment after looking at all the circumstances.

9.  Fourth, the circumstances must be exceptional and this expression was intended to apply the same test as the pre-Insolvency Act 1986 decisions on bankruptcy (see in Re Sitro [1991] Ch.142 at pp.159 and 160), that is to say exceptional or special circumstances which are outside the usual "melancholy consequences of debt and improvidence" (in the words of Nourse L.J.) or (in the words of Bingham L.J.) "compelling reasons not found in the ordinary run of cases".

10.  Fifthly, it is not uncommon for a wife with children to be faced with eviction in circumstances where the realisation of her beneficial interest will not produce enough to buy a comparable home in the same neighbourhood or, indeed, elsewhere. Such circumstances, while engendering a natural sympathy, cannot be described as exceptional, and it was in that context that Nourse L.J. referred to the "melancholy consequences of debt and improvidence" with which every civilised society has been familiar (see p.157).

11.  Sixthly, for the purposes of weighing the interests of the creditors, the creditors have an interest in the order for sale being made, even if the whole of the net proceeds will go towards the expenses of the bankruptcy, and the fact that they will be swallowed up in paying those expense is not an exceptional circumstance justifying the displacement of the presumption that the interests of the creditors outweigh all other considerations.

56. In the present case, the circumstances described, whilst undoubtedly unhappy, were far from exceptional; they were firmly situated within the class of the melancholy consequences of debt and improvidence with which every civilised society has been familiar.
57. In particular, whilst not trivial, none of the ailments that were evidenced (to the extent of the evidence, which itself was merely oral, added in examination in chief) were so serious or had such an impact in connection with the proposed sale of the Property (which has not, for example, been altered in some fashion to especially accommodate them) that they were enough to displace or outweigh the interests of creditors. I bear in mind that both Respondents have been made bankrupt; the deficiency in the estates is substantial (in part contributed to by the Respondents' own conduct in the course of their bankruptcies, which has made their administration unnecessarily expensive) and that without a sale, there will be no distribution to creditors.
58. Moreover, the bankruptcies began in February 2022 – over three years ago; the Baigs served the statutory demands as long ago as 2017; the present position has been reached only following a very long and very expensive history of sustained but unsuccessful opposition, by all manner of means; these applications were themselves issued in December 2023, over a year ago. The Respondents must have known in that time that there was - at the very least - a serious prospect of the orders sought being made.
59. Ultimately, there is nothing at all exceptional in the circumstances (at least, nothing exceptional that favours the Respondents): the time has come for a sale, and for a distribution to creditors, to the extent possible.
60. The order sought was for possession within four weeks from the date of the order, and that is the order that I shall make. I should add one further point: Mr Buston raised the issue that the daughters were not made parties to the proceedings, and that Bishnupriya lives in the 2^nd and 3^rd FFs. There was nothing in this complaint: the daughters were given notice of the Applications, but took no steps to join or defend them, or even state a position in opposition; they cannot stand by, only to claim a right to assert an interest in the Property after trial. If the Applicants, notwithstanding the relief that I intend to grant, essentially in the terms of the applications, require some further relief in order to achieve vacant possession and sale, it will be for them to proceed appropriately.

The Second Group of Properties

61. As mentioned at the outset, the Applicants also sought relief in respect of certain other items of property, in relation to which the Respondents neither adduced evidence nor advanced any case or opposition whether themselves or through counsel (albeit, neither did they consent to an order, or voluntarily co-operate and give up property before trial). I shall deal briefly with each item.

Rental Income

62. It follows from my conclusions that the trustees are entitled to all rental income received by the Respondents in respect of the Property since 21 February 2022. The evidence was that they had received rental income, but had not paid it to the trustees – indeed, that was admitted.
63. However, given that as I have said, the position as to the payments received by the Respondents was not clear (and has not been revealed to the trustees), I shall make a declaration regarding the trustees' entitlement to any rental income received, and make an order for an account and for subsequent payment of any sums found to have been received.

Proceeds of Sale from the Sale of Mr Bhattacharya's BMW

64. In this regard, the evidence was that Mr Bhattacharya's BMW car was sold for £9,200 (although he previously said that it had sold for £12,500). It appeared that Mr Bhattacharya then transferred the proceeds received with an additional £800 to Bishnupriya on 29 September 2022 (making a total of £10,000) who in turn transferred £10,000 to a foreign bank account on 30 September 2022. In his first private examination, Mr Bhattacharya said the payment went to a Mr Liron Nahum. In his second private examination, he said that in fact the money had somehow gone "missing" in the banking system – an inherently unlikely explanation, even if not impossible.
65. In the circumstances, I shall grant the trustees, as sought, a declaration of their entitlement to the proceeds of sale of the car, less an allowance for an alternative vehicle, and thus make an order for payment of £7,700 within 14 days.

Payment of £7,471.00 received from Lovell Son & Pitfield

66. On 4 July 2022, Mr. Bhattacharya received £7,471 from Lovell Son & Pitfield solicitors. It was paid following the dissolution on 26 April 2022 of a company called Braytons Limited, in respect of which Mr Bhattacharya had previously been noted as a person with significant control. The trustees sent a section 307 IA 1986 notice to Mr Bhattacharya on 1 December 2022 claiming the sum as an after acquired asset of his bankruptcy estate and requesting payment. No payment has been made.
67. Accordingly, I shall make a declaration of the trustees' entitlement, and an order for payment, as sought.

Jewellery

68. Since their bankruptcies, Mr. and Mrs. Bhattacharya have also sold or pawned certain items of jewellery which formed part of their bankruptcy estates. In this regard, the trustees sought an order for payment of £20,353.11, which was calculated by reference to the sum of £5,880.39 received under one pledge; £10,585.48 received under another sale; under another, the sum of £3,670.68; and in respect of two stud earrings and a chain, a receipt of £800 in October 2022. Subsequently however, following correspondence between the trustees and Prestige Pawnbrokers, the trustees were paid a remaining balance of £583.40, meaning that the sum paid to the Respondents and wrongfully retained by them, was £20,353.11.
69. In the circumstances, I shall make the declaration sought as to the trustees' entitlement to the net sum, and an order for payment.

Dated 14 March 2025