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Narayanam Narasimhacharyulu and ors. Vs. Pasupuleti Sambaiah - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.A.O. No. 66 of 1955
Judge
Reported inAIR1960AP131
ActsCode of Civil Procedure (CPC) , 1908 - Sections 47, 100 and 115; Provincial Insolvency Act, 1920 - Sections 28, 28(2) and 28A
AppellantNarayanam Narasimhacharyulu and ors.
RespondentPasupuleti Sambaiah
Appellant AdvocateK. Sivaprasada Rao, Adv.
Respondent AdvocateG. Chandrasekhara Sastri and ;H. Suryanarayana Murty, Advs.
DispositionAppeal allowed
Excerpt:
.....code of civil procedure is as follows: it would be a strange thing tosuggest that when once the father's propertyvests in the official receiver, the official receiver could arrogate to himself the status of a fatherand exercise the rights specially and exclusivelygiven to the father under hindu law and also toexecute documents in favour of third parties ofproperties which include the sons' shares as well. if both these contentions are to be upheld, we will be led to a situation where the official receiver as well as every one of the individual creditors separately would be taking steps against the shares of the sons in respect of the debts due to them. both these decisions cannot be regarded as good law after the ruling of the supreme court reported in [1953]4scr894 wherein their..........view of the fact that the judgment-debtor had become an insolvent and his estate had vested in the official receiver under law. the only person who can represent the insolvent thereafter is the official receiver, and not the appellants themselves. section 47 of the code of civil procedure has no application to this case as the proceedings are not between the parties to the suit. in this view, the lower appellate court has no jurisdiction to entertain the appeal. the learned counsel for the respondent relied on section 28a of the provincial insolvency act in support of the proposition propounded by him viz: that when a person is adjudicated an insolvent, not only his undivided share vests in the official receiver, but what vests in the official receiver includes also the capacity and.....
Judgment:

Sanjeeva Row Nayudu, J.

1. This Civil Miscellaneous Second Appeal is directed against the judgment and order of the Subordinate Judge, Tenali in A. S. No. 95 of 1954 reversing the judgment and order of the District Munsif, Tenali, refusing to implead the present appellants as parties on an application made under Order 1 Rule 10 of the Code of Civil Procedure.

2. At the outset, a preliminary objection has been raised on behalf of the appellants viz. that the first appeal in the Subordinate Judge's Court, Tenali will not lie as any order made under Order I Rule 10, Civil P. C. is not appealable under Order XLIII of the Code of Civil Procedure. He therefore contended that the first appeal itself was not competent and the learned Subordinate Judge had no jurisdiction to deal with the matter and reverse the finding and order of the learned District Munsif of Tenali.

3. On the question, if the lower appellate court had no jurisdiction to entertain the appeal, whether this Court has jurisdiction to entertain a Second Appeal or a Civil Miscellaneous Appeal, the learned counsel for the appellants relied on a decision reported in Sitaramamurti v. Lakshminarayana Murti, (1942) 2 Mad LJ 568: (AIR 1943 Mad 185) wherein it was held that although technically speaking a Second Appeal itself is incompetent in the circumstances, since the wrong order of the lower appellate Court in interfering with the judgment and order of the Court of first instance had to be set aside whether it be On the ground of jurisdiction or some other defect, this court has got jurisdiction to that extent to do justice by restoring the correct order and neutralising the mischief done by the order of the lower appellate court which was open to objection.

In that case, a Division Bench of the Madras High Court held that the Subordinate Judge, entertaining the appeal as an appeal against an order, dismissed it holding that the learned District Munsifs decision was correct. A Civil Miscellaneous Second Appeal had been filed in that Court and jt was objected that no appeal lay to the Subordinate Judge, the rule providing for a right of appeal having been declared to be ultra vires. This objection was met by a prayer from the appellant that he may be permitted to pay the deficient court-fee in the lower appellate court treating the appeal to that court as an appeal against the amended decree and that he may also be permitted to pay the deficient court-fee in the High Court treating the civil miscellaneous second appeal as a regular second appeal.

It is undeniable that similar prayers had been granted by the High Court in several cases where no objection has; been raised to the procedure. No doubt, the position is different in cases in which the lower appellate court, assuming a jurisdiction which was not in fact vested in it, had amended the trial court's decree. But it cannot be said that when the lower appellate Court has wrongly assumed an appellate jurisdiction but has declined to interfere with the trial court's decree, any right of second appeal is conferred by that wrongful assumption of jurisdiction. The decisions in Raman Nambyar v. Rayiram Naman, 67 Mad LJ 43: ILR 57 Mad 777; (AIR 1934 Mad 484) and similar cases would not govern a case in which the lower appellate Court has left the trial court's decree intact.

4. I am satisfied that in this case even if a Second Appeal as such is not technically speaking maintainable, in view of the fact that the first appeal itself was not entertainable, there can be no objection to exercise the powers of revision vested in this Court in quashing the order of the lower appellate Court and restoring the order of the Court of the first instance.

5. It is contended by the learned counsel for the respondent that as the application itself was made not merely under Order I Rule 10 Code of Civil Procedure but also under Section 47, Civil Procedure Code the application should be regarded as one under Section 47, Civil Procedure Code in which case the lower appellate Court would certainly have jurisdiction to entertain the appeal. This objection can be considered by a perusal of Section 47 Civil Procedure Code which clearly says that it applies only to a matter between the parties to the suit Section 47(1) of, the Code of Civil Procedure is as follows:

'All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.'

These conditions, in my opinion, have not been fulfilled in this case, for the appellants were not parties to the suit in which a decree was 'passed; nor the appellants can be regarded as representatives of the judgment-debtor in view of the fact that the judgment-debtor had become an insolvent and his estate had vested in the Official Receiver under law. The only person who can represent the insolvent thereafter is the Official Receiver, and not the appellants themselves.

Section 47 of the Code of Civil Procedure has no application to this case as the proceedings are not between the parties to the suit. In this view, the lower appellate Court has no jurisdiction to entertain the appeal. The learned counsel for the respondent relied on Section 28A of the Provincial Insolvency Act in support of the proposition propounded by him viz: that when a person is adjudicated an insolvent, not only his undivided share vests in the Official Receiver, but what vests in the Official Receiver includes also the capacity and right of the father viz. the insolvent, to sell the shares of the sons in discharge of his debts which are not immoral. Section 28A of the Provincial Insolvency Act is as follows:

'The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge:

Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or Receiver or the Collector acting under Section 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court:

Provided further that the property of the insolvent shall not be deemed by reason of anything contained in this section to comprise his capacity referred to in this section in respect of any such sale, mortgage or other transfer of property made in the State of Madras after 28-7-1942 and before the commencement of the Provincial Insolvency (Amendment) Act, 1948.' I find, on a reading of this section, that it does not in terms justify the inference or a conclusion that the rights of the insolvent before the supervening of the insolvency to sell the sons' share for payment of his debts get vested in the Official Receiver.

6. In this connection, it is necessary to examine the Hindu Law doctrine of pious obligation itself. All the texts which would support this doctrine make it clear that the obligation in question binds all the sons in view of their acquiring a right by birth in the ancestral properties in the hands of the father. In other words, by virtue of their birth itself, the sons acquire an interest in and become entitled to share in the share of their father in the family properties. If the lather contracts debts from outsiders which cannot be struck down as immoral, they should be paid by the sons from out of the entire undivided interest in the properties, which before their birth belonged exclusively to the father.

This doctrine came to be extended by judicial decisions to the extent of enabling creditors of the lather to enforce this peculiar vicarious obligation against the sons, presumably by stepping into the shoes of the father. It is extremely doubtful whether this extension could be regarded as justified by the Hindu Law texts on the subject. But as the law is more or less settled by judicial decisions and Section 53 Civil Procedure Code provides for it, by implication it has to be assumed that the right exists in a creditor.

So much so, a creditor could either (1) suethe father and the sons together and obtain a decree against the father and against the shares of the sons; (2) obtain a decree against the father and in execution bring the undivided properties of the sons to sale and (3) if the father is dead, to sue the sons and obtain a decree and to execute the decree against the sons by attachment and sale of the joint family property by virtue of Sections 52 and 53 of the Code of Civil Procedure.

7. It is only when a partition of the jointfamily properties between the father and sons takes place prior to the obtaining of the decreethe question as to how far the decree debt wouldbe made binding on the sons in execution wouldarise, in view of the fact that under Section 60 of theCode of Civil Procedure, it is only the property inwhich the judgment-debtor has a right in, or hada right of disposal over, that could be brought tosale in execution, and that since that right of disposal is extinguished by partition, the difficultyarises, and the only remedy open to a creditor isto file a suit against the sons, and obtain a decree,apparently after any plea of immorality raised by the sons is negatived.

8. The whole perspective changes when insolvency supervenes. When once the father is adjudicated an insolvent, he undergoes a civil death and all his personal rights of the nature conferred by Hindu Law such as the right to transfer the family property in discharge of his debts including the sons' interest therein, become automatically extinguished. It would be a strange thing tosuggest that when once the father's propertyvests in the Official Receiver, the Official Receiver could arrogate to himself the status of a fatherand exercise the rights specially and exclusivelygiven to the father under Hindu Law and also toexecute documents in favour of third parties ofproperties which include the sons' shares as well.

This obviously would lead to a situation where the Official Receiver's rights would depend on the religion of the insolvent and whether the insolvent is a Hindu or a Non-Hindu. Obviously there cannot be any such discrimination in the eye of law. Had the mutter been res integra I would not have hesitated to point out that Section 28A of the Provincial Insolvency Act, does not in any way improve the position of the Official Receiver just because the insolvent happens to be a Hindu. But the question came up for consideration before the Supreme Court in Nageswaraswami v. Viswasundara Rao, : [1953]4SCR894 wherein their Lordships observed as follows:

'There was some difference of judicial opinion as to whether the powers of a father under the Mitaksbara Law to alienate the joint family property including the interest of his sons in the same for discharge of an antecedent debt not contracted for illegal or immoral purposes vests in the Receiver on the adjudication of the father as an insolvent. Under the Presidency Towns Insolvency Act, this power was held to vest in the Official Assignee under Section 32(2) of the Act -- Satnarain v. Sri Kishen Das. AIR 1936 PC 277. As regards cases governed by Provincial Insolvency Act, it was held by a Full Bench of the Madras High Court that the father's power to dispose of his son's interest in the joint family property for satisfaction of his untainted debts was not 'property' within the meaning of Section 28(2)(d), Provincial Insolvency Act -- Ramasastrulu v. Balakrishna Rao, AIR 1942 Mad 682 (FB) while a contrary view was taken by a Full Bench of the Patna High Court -- Vide Bishwanath Sao v. Official Receiver, AIR 1937 Pat 185 (FB). The conflict has now been set at rest by the enactment of Section 28A in theProvincial Insolvency Amendment Act of 1948 which came into force on 12-4-1948.'

Lower down their Lordships observed further, as follows:

'The language of the section indicates that its operation has been expressly made retrospective. The result, therefore, is that the power of defendant 1 to alienate the interest of his sons, defendants 2 and 3 in the mortgaged properties for satisfaction of his antecedent debts (fid pass to the Receiver as 'property' within the meaning of the Provincial Insolvency Act and consequently On a sale by the Receiver the interest of defendants 2 and 3 did vest in the 6th defendant and he alone must be held competent to exercise the right of redemption.'

These observations are binding on me and I most respectfully follow them.

9. To subscribe to the proposition urged bythe learned counsel for the respondent viz. that notwithstanding the insolvency of the father, it would be open, to any single creditor of the insolvent to step into the shoes of the father and to enforce his rights against the sons in respect of their shares in the family property would lead to the inevitable result that a single creditor would have the preferential advantage over all the other creditors because he happens to be a little more diligent and first among the creditors in bringing the sons' shares in the family properties to sate.

On the other hand if Section 28A has to be giventhe interpretation which the learned advocate forthe respondent wants me to do viz., that the entirerights of the father vest in the Official Receiverand that he can deal with the sons' share also andthis interpretation has necessarily to be given inview of the observations of the Supreme Court extracted above -- obviously it militates against theearlier proposition that the creditor himself coulddo the same thing.

If both these contentions are to be upheld, we will be led to a situation where the Official Receiver as well as every one of the individual creditors separately would be taking steps against the shares of the sons in respect of the debts due to them. It would be a situation which would become impossible in law to manage and as such could not have been in the contemplation of law. Further, once the property of the judgment-debtor vests in the Official Receiver it is the Official Receiver alone who represents the general body of creditors in dealing with the property of the Insolvent (Section 28(2) of the Provincial Insolvency Act).

10. There are two single bench decisions of the Madras High Court reported in Puthayya V. Suramma, : AIR1951Mad713 and Musala Seethayya v. Lalliadi Venkanna : AIR1951Mad1010 . In the former case the only point for consideration was whether the Official Receiver should have been impleaded as a party to the execution proceedings.

It was held that the sons cannot compel the decree-holder to implead the Official Receiver and if the latter thought it necessary to do so it is up to him to take steps to be brought on record. This being the point for consideration the other observations in the decision are merely obiter and I respectfully disagree with those observations. In the latter case, Satyanarayana Rao J., while recognising the legal position that the insolvency of the father of a joint Hindu family under the law as it then stood, that is, after the introduction of Section 28A of the Provincial Insolvency Act, which had retrospective effect, vests not only the share of the father but also the power of the father to dispose of the properties of the sons in the Official Receiver, goes on to hold that where the Official Receiver had sold only the father's interest in the property and had not exercised the power of the father by bringing to sale the share of the sons also Section 28 did not prevent the decree-holder from proceeding in execution of the decree against the sons' share notwithstanding the vesting of the power of the father to dispose of the property of the sons in the Official Receiver.

I respectfully disagree with the latter observation of the learned Judge. Both these decisions cannot be regarded as good law after the ruling of the Supreme Court reported in : [1953]4SCR894 wherein their Lordships made it clear that the power of the father to alienate the interests of his sons for the satisfaction of his antecedent debts did pass to the Receiver as 'property' within the meaning of the Provincial Insolvency Act. Once it has so passed by virtue of Section 28A, Section 28(2) of the Act debars any creditor from having any remedy over the property of the insolvent which property includes the property defined under Section 28A.

11. I have therefore no hesitation in holding that when once insolvency supervenes, the father's share in the family property and his right of disposal of his sons' shares vests in the Official Receiver and thereafter it is only the Official Receiver and not any one else that could proceed against the properties of the joint family in exercise of the said right. I understand that in this case the Official Receiver had sold the father's 1/6th share and the money is lying in deposit with the Official Receiver for the benefit of the general body of creditors.

12. In the result the appeal is allowed and the judgment and order of the lower appellate Court are set aside and the application of the creditor-respondent in E. A. No. 274 of 1954 is dismissed on the grounds indicated above. In theentire circumstances, I make no order as to costs.No leave.


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