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Rustomji Ardeshir Cooper Vs. Byramji Bomanji Talati - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 12 of 1933 and Suit No. 2085 of 1930
Judge
Reported inAIR1934Bom84; (1934)36BOMLR79
AppellantRustomji Ardeshir Cooper
RespondentByramji Bomanji Talati
DispositionAppeal dismissed
Excerpt:
presidency-towns insolvency act (iii of 1909), section 17 - decree passed against a person who becomes insolvent-right to appeal-right passes to official assignee.;the right to set aside a money decree passed against a person on the ground of fraud passes on his insolvency to the official assignee. boaler v. power [1910] 2 k.b. 229 followed. - - i think we clearly have jurisdiction to direct the payment of that sum deposited in court to the respondent......when the matter first came before this court, it was assumed by everybody that if any right of appeal lay, the right would be in the, official assignee, and we stood the matter over for a short time to enable the official assignee to make up his mind whether he desired to appeal or not. he subsequently came to the conclusion that he did not desire to appeal. certain creditors then appealed from that decision of the official assignee to the judge in insolvency, and the learned judge dismissed the appeal and upheld the decision of the official assignee not to appeal. the learned judge in insolvency does not appear to have gone into the merits of the question whether the appeal was likely to be successful. he seems to have held that he ought not to interfere with the discretion.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal in which the respondent asks to have the appeal dismissed on the ground that no paper book has been delivered.

2. The position of the matter is this. There was a suit brought by one Talati against one Cooper in the year 1929 to recover a sum of money, and on February 28, 1929, judgment was given against Cooper for Rs. 90,000. On September 30, 1930, Cooper started his present suit to have the decree of February 28, 1929, set aside, his contention being, I understand, that the decree was obtained by fraud and in his absence. On December 23, 1932, Mr. Justice Kania gave judgment in the suit dismissing the plaintiff's claim, and in February 1933, this appeal was lodged by Cooper. Subsequently on March 27, 1933, Cooper was adjudicated insolvent on the petition of this particular judgment-creditor.

3. When the matter first came before this Court, it was assumed by everybody that if any right of appeal lay, the right would be in the, Official Assignee, and we stood the matter over for a short time to enable the Official Assignee to make up his mind whether he desired to appeal or not. He subsequently came to the conclusion that he did not desire to appeal. Certain creditors then appealed from that decision of the Official Assignee to the Judge in Insolvency, and the learned Judge dismissed the appeal and upheld the decision of the Official Assignee not to appeal. The learned Judge in insolvency does not appear to have gone into the merits of the question whether the appeal was likely to be successful. He seems to have held that he ought not to interfere with the discretion of the Official Assignee. Inasmuch as the Official Assignee had, in express terms and properly, submitted the exercise of his discretion to the Court, I think the learned Judge ought to have dealt with the matter on merits. We are told that the creditors, who were interested in bringing that appeal before the Insolvency Judge, desire to appeal from his decision to this Court, and so far as they are concerned, they ask that this appeal may stand over until after they have brought that appeal.

4. However, Mr. Forbes, on behalf of the insolvent, Cooper, has argued that as a matter of fact the right of appeal remains in the insolvent, and does not pass to the Official Assignee, and he asks for time to file his paper book.

5. The way he puts his case is this. He says that this right, if it amounts to anything, is a chose in action, and he relies on the law stated in Halsbury's Laws of England, Volume II, 2nd Edn., p. 186, para. 255, which is in these terms:

All rights of action which relate directly to the bankrupt's property and can be turned into assets for the payment of debts pass to the trustee, but where a cause of action arises from the bodily or mental suffering or personal inconvenience of the bankrupt, or from injury to his person or reputation, then the right of action remains with the bankrupt.

6. Mr. Forbes contends that the decree, which he wants to set aside, being a mere money decree against the insolvent, does not affect in any way the assets divisible amongst the creditors, since the assets divisible amongst the creditors will remain the same whether this judgment stands or falls. What will vary is the class of creditors to receive the dividend, and the amount of dividend which each creditor may expect to get. Therefore, Mr. Forbes contends that the right to set aside this judgment never passed to the Official Assignee. I agree with the contention that this right to set aside the judgment is a chose in action. Under Section 17 of the Presidency-towns Insolvency Act all the property of the insolvent passes to the Official Assignee, except as otherwise provided in the Act, and undoubtedly, the word 'property' is wide enough to cover a chose in action. It is quite clear that this particular judgment does not fall within the second class of cases referred to in the passage in Halsbury, which I have read, because the cause of action does not arise from any bodily or mental suffering or personal inconvenience of the bankrupt or from any injury to his person or reputation; but, in my opinion, the two classes of choses in action, which are referred to in Halsbury, are not exhaustive. The true view is that all choses in action pass, unless they come within the exception which has been established in relation to matters personal to the bankrupt.

7. There is, I think, direct authority for that view in the decision of the English Court of Appeal in the case of Boaler v. Power [1910] 2 K.B. 229 In that case, the bankrupt was suing to set aside a judgment on the ground that it had been obtained by fraud, and the only part of the judgment which he wanted to set aside was the judgment for costs. The Court of Appeal held that his right to sue to set aside a judgment was a chose in action, which vested in the trustees in bankruptcy, and they held that the bankrupt could not maintain the suit after his bankruptcy. I think that decision is authority for holding that in this case the right to appeal against the judgment of Mr. Justice Kania ceases to be exerciseable by the insolvent after his insolvency.

8. It is, in my opinion, not necessary for us to consider what the exact rights of the Official Assignee may be, because he says that, whether he can appeal or not, he does not desire to appeal. And it is difficult to see what advantage he would get by appealing, because it is established by many authorities that the Official Assignee is not bound by a judgment obtained by a creditor. It is open to him when a judgment-creditor tenders proof of his debt to reject the proof on the ground that the judgment was obtained by collusion or fraud or something of that sort. Therefore, the Official Assignee can go into that question when the creditor seeks to prove his debt.

9. That being so, I think that we ought not to extend the time for filing the paper book in order to enable the creditors to appeal against the decision of the learned Insolvency Judge upholding the view of the Official Assignee that he is not bound to appeal in this case.

10. There will, therefore, be a declaration that this appeal has abated, and we must dismiss it.

Blackwell, J.

11. I agree.

Beaumont, C.J.

12. (On costs). In this case the appellant had made the usual deposit of Rs. 500 in Court under rule 807 as security for the costs of the respondent. The Official Assignee contends that Rs. 500 form part of the estate, and that the respondent can only prove his claim as to costs. That view, I think, is wrong. The only interest of the insolvent or of the Official Assignee in Rs. 500 is to receive so much of it as is not properly applied under the order of the Court in payment of the costs of the respondent. I think we clearly have jurisdiction to direct the payment of that sum deposited in Court to the respondent. That being so, we make the order that the respondent should get his costs of the appeal out of Rs. 500 deposited by the appellant in Court.


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