1. [His Lordship, after setting out the facts, proceeded.] The main questions which arise for consideration in this appeal are :
I. Whether the sale of December 29, 1909, was bogus and fraudulent or not ?
II. If not, what is the effect of the purchase of the suit property on January 14, 1918, in the names of the sons of the insolvent ?
2. In regard to the first of these two points the learned counsel for the appellant contends that the enumeration by the learned District Judge of the doubtful circumstances connected with the sale shows it was fraudulent. I am of opinion, however, that there is a definite finding of fact that the sale is not proved to be fraudulent, and that that finding of the District Judge is to be accepted by this Court.
3. The result is that so far as the original sale of 1909 is concerned, the present appellant cannot base his case on that sale. It may be added that similar remarks apply to the sale by Bhagvandas to Shivlal.
4. We now come to the sale in the name of the insolvent's sons in January 1918, in connection with which certain questions of law are involved.
5. The argument of the learned counsel for the appellant is that the learned District Judge has found that the property was acquired by the joint Hindu family of the insolvent and his sons, and is consequently joint property of the family, and that the appellant is, therefore, entitled to obtain satisfaction for his debts therefrom. The learned pleader for the respondent on the other hand contends that the suit property was bought by the sons only, and that as the District Judge has held that as it did not become their joint family property, it must be the sole property of the sons, and that therefore the appellant is not entitled even to satisfaction of the insolvency debts even from one-fourth share of it. Thus the finding of the District Judge that the insolvent and his sons hold the property as co-owners, and that, therefore, the appellant is entitled to obtain satisfaction from one-fourth of it, is attacked from both points of view.
6. On consideration of all the facts I have come to the conclusion that, whether we decide that the property is joint property of the insolvent and his sons, or that it is held by them as co-owners, in either event the decree passed by the learned District Judge should be confirmed. For this reason it is not very essential to decide which of the two alternatives is to be accepted, though personally I should be inclined to the view that it became joint family property, as no partnership between the sons and the insolvent is proved, and as some of the sons are minors.
7. In any case, however, if we take the view adopted by the learned District Judge, the property was acquired by the persons constituting a joint Hindu family by their joint labour ; and no doubt the name of the insolvent was omitted from the list of purchasers because he was an insolvent. Consequently it is not the case that the sons alone held it as co-owners, but the sons and the father together held it as co-owners; and, therefore, the decree of the District Judge should stand.
8. If, however, we take the other alternative, namely, that the property became joint family property by the purchase of 1918, still, as it so happens, the same result follows, in view of the recent Privy Council ruling of Sat Narain v. Behari Lal (1924) 27 Bom. L.R. 135. The learned counsel for the appellant contends that that ruling does not apply to cases where the insolvency has taken place in consequence of the failure of the family business. I do not find, however, that this contention is borne out by the judgment in that case. I refer particularly to the written statement of the defendant in that case, part of which is given at pp. 137-138 in Sat Narain's case, namely :-
The real facts are that Rai Bahadur Sri Kishen Das, the father of the plaintiff, and the head and manager of his family, family estate and family firm as well as in his personal capacity was, in consequence of the failure of the family business, adjudicated insolvent....
9. Having regard, moreover, to the judgment as a whole, I am of opinion that no distinction can be made, as suggested by the learned counsel for the appellant, that the ruling does not affect cases in which there has been a failure of the family business. The result is that only the property of the insolvent himself is liable, and the appellant can claim only one-fourth of the family property, as decreed by the learned District Judge.
10. One further contention is made by the learned pleader for the respondent, namely, that, if the above argument is correct, then the appellant should receive only one-eighth, not one-fourth of the property, because the insolvent's brother Narotam is entitled to one-half of the family property. The learned District Judge, however, has held that the property was re-acquired not by the family of the insolvent and that of Narotam, but only by the family of the insolvent itself, that is to say, by the insolvent and his sons. Narotam and his family, therefore, have no share in the property as re-purchased by the insolvent and his sons.
11. The result is that the appeal and the cross-objections are both dismissed with costs.
12. [His Lordship first set out the facts and then proceeded as follows.] The learned District Judge in the course of his judgment referred to the cases of Jagabhai Lalubhai v. Bhukandas Jagjivandas I.L.R. (1886) 11 Bom. 37 and Nunna Setti v. Chidaraboyina I.L.R. (1902) Mad. 214 and Section 60 of the Civil Procedure Code and the eases of Fakirchand Motichand v. Motichand Hurruckchand I.L.R. (1883) 7 Bom. 438 and Sardarmal v. Aranvayal Sabhapathy I.L.R. (1896) 21 Bom. 205 and Bihari Lal v. Sat Narain I.L.R. (1922) Lah. 329 and expressed the opinion that there was hardly any doubt that under the vesting order the interest of the sons in the joint family property vested in the Official Assignee. The view of the lower Court is supported by the decisions of the Madras High Court in In re Sellamuthu Servai I.L.R.(1923) Mad. 87 and in Sankaranarayana, Pillai v. Rajamani. I.L.R. (1923) Mad. 462 But the case of Bihari Lal v. Sat Narain I.L.R.(1922) 3 Bom. Lah. referred to by the learned District Judge, went in appeal to the Privy Council and their Lordships in Sat Narain v. Behari Lal (1924) L.R. 52 IndAp 22 held that the property of an insolvent which vests in the receiver means only the property which is divisible amongst his creditors, that the father's power to dispose of the joint property is not absolute but conditional on his having debts which are liable to be satisfied out of that property and Section 2 seems to contemplate an absolute and unconditional power of disposal and that the interest of the sons in joint Hindu family would not vest in the receiver by virtue of the father's insolvency alone. Their Lordships at p. 39 say : 'It may be that under the provisions of Section 52, or some other way, that property may in a proper case be made available for payment of the father's...debts.' Mr. Koyajee for the sons contends that the father's share only in joint family property can be so made available by partition, while Mr. Thakor contends that the whole joint family property can be so made available by proper proceedings if the debts are binding on the sons. It is not necessary to pursue the point further in this case as, according to the finding of the lower appellate Court which we accept, the property went out of the family some time before the application for insolvency by the sale of 1909 which was not shown to be without consideration and in fraud of creditors. Though in the Lahore case decided by the Privy Council, the question related to the exercise of the right of pre-emption by the son of an insolvent and fell to be decided by the provisions of the Presidency Towns Insolvency Act III of 1909, I think that the same result would follow and the son's interests would not vest in the receiver by virtue of the father's insolvency alone under the corresponding Section 2(1)(d) and Section 28 of the Provincial Insolvency Act V of 1920.
13. The next question arising in the case is whether in the property subsequently acquired by the joint exertions of the father and sons the plaintiff is entitled to get anything more than one-fourth of the property which would fall to the share of the father. The learned District Judge, after referring to the case of Laldas Narandas v. Motibai : (1908)10BOMLR175 accepted the view of Birdwood J. in Chatturbhooj Meghji v. Dharamsi Naranji. I.L.R. (1884) 9 Bom. 438 In Haridas v. Devkuvarbai : (1926)28BOMLR637 , the view of Birdwood J. in Chatturbhooj Meghji v. Dharamsi Naranji was disapproved and following Karsondas Dharamsey v. Gangabai I.L.R. (1908) 32 Bom. 479 and Laldas Narandas v. Motibai it was held that property acquired jointly by father and son living together becomes joint family property even in the absence of family nucleus; and it depends in each case on the evidence whether the members of a joint family have lived separately or together, and if the latter, whether they have dealt with the property acquired by their joint exertions as joint family property (p. 640). In this case the sale- deed was in the name of the sons. The father's name may have been omitted as on account of the insolvency of the father. But the lower Court finds a fact that there was a clear intention of the acquirers to hold the property acquired by their joint exertions as co-owners, and the father and sons intended to treat the property distinct from joint family property. On the finding of fact of the lower Court which we accept the plaintiff receiver is entitled under Section 28, Clause (4), of the Provincial Insolvency Act V of 1920, to one-fourth of the property which would fall to the share of the father. It is contended on behalf of the sons that plaintiff should get one-eighth as Narotam had one-half share. It is found that Narotam separated from the family and it does not appear that he exerted to acquire the properties subsequently. I would, therefore, dismiss the appeal and the cross-objections with costs.