1. One Himatlal Maganlal was a member of a joint Hindu family along with his son, Haridas. He was adjudicated insolvent under the Provincial Insolvency Act V of 1920. A receiver of the insolvent's estate was appointed and he desired to sell by auction the share in the joint family property, not only of the insolvent, but also of the minor son. The latter by his mother opposed the sale of his own share, and the lower Courts decided that the receiver had power to sell it, the insolvent's debts not having been proved to have been incurred for an immoral purpose. The minor appeals. And the question, in this appeal, is whether the receiver has power to sell the minor's share for the benefit of the insolvent's estate.
2. The argument for the appellant is as follows:-
The estate is different from the power to dispose of it and the power now in question is not ' property' under Section 2 (d) of the Provincial Insolvency Act. That Act contains no provision corresponding to Section 52 of the Presidency-towns Insolvency Act; nor do Sections 37 and 67 of the Provincial Insolvency Act, which correspond to Sections 23 and 76 of the Presidency-towns Insolvency Act, contain any provision for the return of the surplus to the minor son. The power of a joint Hindu father to dispose of the joint son's property towards the payment of the father's debt is a personal power, which does not vest in the receiver.
3. The question whether upon a Hindu being adjudicated an insolvent under the Presidency-towns Insolvency Act 1909, the property of the joint Hindu family consisting of himself and his son did or did not vest in the Official Assignee was the subject of some difference of opinion until the decision of the Privy Council in Sat Narain v. Behari Lal (1924) L.R. 52 I. A. 22 : 27 Bom. L.R. 135. In that case, their Lordships held that the property of the son did not vest in the Official Assignee and did not come within the meaning of 'property' as defined in Section 2 (e) of the Presidency-towns Insolvency Act, Act III of 1909, although under Section 52 (2), or in some other way, that property might 1)8 made available for the payment of his just debts. Their Lordships, in their judgment, considered Sections 23 and 76 of the Presidency-towns Insolvency Act.
4. Under Section 2 (e) of the Presidency-towns Insolvency Act ' property ' includes any property over which or the profits of which any person has a disposing power which he may exercise for his own benefit. The words are repeated in Section 2 (d) of the Provincial Insolvency Act V of 1920. Section 52 of the Presidency-towns Insolvency Act, however, expressly further excludes certain kinds of property and includes others; the result is that property for the purpose of the Presidency-towns Insolvency Act has to be defined under both these sections read together, whereas in the Provincial Insolvency Act, Act V of 1920, by reason of the absence of a section corresponding to Section 52, the only definition is that laid down in Section 2 (d).
5. The first and most important rule in the interpretation of statutes is that the words of a clause in a statute must be given their natural meaning reading the enactment as a whole and it is not permissible to begin by a construction of similar words in the other statute. This rule is compulsory and takes precedence of the rule permitting comparison with the language of similar sections in Acts of similar scope on similar subjects. Moreover, the view of the Privy Council on the point was not the decision but was a ratio decidendi for the purpose of deciding the question of the receiver's power to pre-empt, and it was based on a construction of Sections 2 and 52 combined. It does not come in the way of a consideration of the meaning of Section 2 of the Provincial Insolvency Act.
6. Section 2 (d) of the Provincial Insolvency Act expressly includes property over which any person, such as a joint Hindu father, has a disposing power, which he may exercise for his own, benefit such as the payment of his just debts.
7. This definition, it appears to me, makes it difficult to exclude the property of a joint son over which the father has a disposing power, if he desires to alienate it for the payment of his own just debts. That the father has such power until he becomes insolvent is unquestioned. It is difficult to say that the power lapses on insolvency and revives on the discharge of the insolvent. If it remains alive, the only person in whom it can vest is the receiver of the insolvent's estate. The authorities up to the Privy Council ruling on the arguments are exhaustively considered in the Full Bench decision of the Lahore High Court in Bihari Lal v. Sat Narain ILR (1922) Lah. 329, which their Lordships of the Privy Council overruled on appeal in 52 I. A. 22. After the Privy Council decision, the view stated above as to the receiver's power to sell has been followed in cases such as Khem Chand v. Narain Das ILR (1925) Lah. 493; Sat Narain v. Sri Kishen Das ILR (1926) Lah. 376; Sita Ram v. Beni Prasad ILR (1924) All. 263; and Seetharama Chettiar v. Official Receiver, Tanjore ILR (1926) Mad. 849. The only observations to the contrary are the obiter dicta of Macleod C. J. in Shripad v. Basappa ILR (1925) 49 Bom. 785 : 27 Bom. L.R. 934, where he observes (p. 787):-
Speaking for myself, I do not think that when the manager of a joint Hindu family is adjudicated insolvent, the power which he had before his insolvency to dispose of family estate for proper purposes, must be considered as vesting in the Receiver or Official Assignee.
In that case, the facts were different, A decree had been obtained against both father and son, and property belonging to them jointly had been attached before insolvency. After attachment the father was adjudicated insolvent and his estate vested in the receiver. The receiver applied for a declaration that the property attached was not at all liable for the satisfaction of the decree obtained by the decree-holder against the son. It was held that the interest of the son did not vest in the receiver on the insolvency of the father and that the attaching creditor was entitled to execute his decree against the son. In other words, the insolvency of the father did not affect, the attachment by the creditor of the son's share. The main ground for decision, in my opinion, was that, as laid down in Sat Narain v. Behari Lal (1924) L.R. 52 IndAp 22 : 27 Bom. L.R. 135, the property of the son did not so vest in the receiver and the prior attachment of the son's share, therefore, could not be affected by the subsequent insolvency of the father. These observations already quoted above were not necessary for the decision of the case, and unsupported as they are, by authority or reasoning, must be taken to be obiter dicta not binding on this Court. I prefer to follow the decisions of the three High Courts subsequent to the Privy Council decision.
8. As regards the repayment of the residue, if any, to the son, even in the absence of a specific enactment in the Provincial Insolvency Act, there appears to be no reason why in cases of such a residue the receiver should not, of his own motion, or the Court on the application of the son, return the residue, if any, to the son. It is obvious that in the case of ancient law and institutions such as the Hindu joint family, in many respects unique and based on notions which find no place under modern conditions or in modern law, it is difficult for the legislature to foresee all the anomalies that would result by modern enactments and processes such as insolvency. The Courts can but reconcile Hindu law and the Insolvency Act as best as they may.
9. For these reasons, the lower Courts were, in my opinion, right in holding that the receiver had the power to sell the minor's share.
10. The appeal is dismissed with costs.
11. The respondent is the receiver of the estate of an insolvent named Shah Himatlal Maganlal, The appellant is the minor son of the insolvent, who has an interest in the joint family house. His mother, as his next friend, applied to the Insolvency Court on his behalf as well as on her own, to restrain the receiver from selling his share in the house, on the ground that his father's debts might have been due to gambling. She failed in the Insolvency Court and also in first appeal, and has come here.
12. Her case was based on the Privy Council decision of Sat Narain v. Behari Lal (1924) L.R. 52 I. A. 22 : 27 Bom. L.R. 135, that the interest of a son in coparcenary property does not vest in the receiver of his father's estate under the Presidency-towns Insolvency Act. It has been urged on her behalf that in this respect there is no difference between that Act and the Provincial Insolvency Act now in question and this must be conceded. But that was conceded by the trial Judge and the learned District Judge who decided against the appellant on an entirely different ground. Following the Full Bench decision of the Madras High Court in Seetharama Chettiar v. Official Receiver, Tanjore ILR (1926) Mad. 849, they held that the right of a Hindu father to sell the joint family property, including the undivided shares of his sons, is property which vests in the receiver of his estate in insolvency. This is the view of the Lahore High Court also. It is true that a different view was suggested by Macleod C. J. in Shripad v. Basappa ILR (1925) 49 Bom. 785 : 27 Bom. L.R. 934; but his judgment shows that the opinion was obiter. The learned Chief Justice did not refer to any authorities on the point and did not profess to give a considered opinion. We think, then, that the learned District Judge was entitled to prefer the decisions of the Madras and Lahore Courts
13. Apart from authority, the view adopted by the lower Courts seems sound in principle. The right of a Hindu father to sell the whole of the joint family property to satisfy his legitimate debts is a valuable right which ought to be available to his creditors. It cannot be extinguished by an insolvency, and ought not to remain with the insolvent. The principal argument put forward by the appellant's learned pleader is that it does not come within the definition of ' property ' in the Act, and for this he relies on the Privy Council case cited above, which decided that it did not come within the corresponding definition of the word 'property contained in Section 2 of the Presidency-towns Insolvency Act. But, as pointed out by Mr. Thakor, the ratio decidendi of that case was that the right in question comes within the definition of the word 'property' in Section 52 of the latter Act, and must, therefore, be excluded from the definition in Section 2; and the same reasoning cannot be applied to the Provincial Insolvency Act which has no section to correspond with Section 52. The correct method of interpretation is to interpret the Provincial Insolvency Act as it stands without reference to the companion Act; and, doing so, we can find nothing to prevent us including in the term not only material objects but also rights over material objects. The definition in Section 2 is not complete. It merely says that the word includes 'property over which any person has a disposing power,' and does not exclude the ordinary dictionary and legal meaning of the word.
14. The last argument for the appellant is based on Sections 37 and 67 of the Provincial. Insolvency Act. They provide that on annulment the property of the debtor shall revert to him and that, in any case, he is entitled to any surplus remaining after the satisfaction of his creditors. The learned pleader finds a difficulty in applying these sections if the father's right to sell his son's estate vests in the receiver. But we can find no such difficulty It is true that there would be one, as pointed out by their Lordships of the Privy Council, if the son's share vested in the receiver, for he and not his father ought to have the first claim to the surplus. But, where a mere right to sell vests in the receiver, the son is not affected. If, after his share has been sold, a surplus remains, he must get it, for it has never vested in the receiver and is not covered by the sections in question.
15. For these reasons I agree that the appeal should be dismissed with costs.