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Official Receiver, Krishna Vs. Uppalapati Babu Rao and anr. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. Nos. 5524 and 5525 of 1980
Judge
Reported inAIR1982AP260
ActsProvincial Insolvency Act, 1920 - Sections 28A
AppellantOfficial Receiver, Krishna
RespondentUppalapati Babu Rao and anr.
Appellant Advocate Challa Sitaramayya, Adv.
Respondent AdvocateC. Appa Rao and ; T.S. Haranath, Advs.
Excerpt:
property - insolvency - sections 4, 28 a and 52 of provincial insolvency act, 1920 - property attached in execution of decree - what are rights of official receiver vis-a-vis son's share in joint family property in order to discharge untainted debts of insolvent father even though such share in property stands attached in execution of a decree obtained against father and son - held, official receiver who is in possession of son's share in joint family property under section 52 shall continue to be in possession and shall be entitled to get son's share sold only through court by taking appropriate proceedings for benefit of general body of creditors. - maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao &.....order1. these two revision petitions could be disposed of by a common order as they arise out of common judgment. 2. the sole but important question which arises in these revisions is, what are the rights of an official receiver vis-a-vis the son's share in the joint family property in order to discharge the untainted debts of an insolvent -father even though such share in the property stands attached inexecution of a decree obtained against the father and son. 3. c.r. p. no. 5524 of 1980 arises out of an order passed in e.p. no. 158 of 1971 in o.s. no. 5 of 1971 and a letter of the official receiver in e.p. no. 362 of 1970 in o.s. no. 117 of 1970; and c.r.p. no. 5525 of 1980 arises out of an order passed in e.p. no. 270/75 in o.s no. 117 of 1970. 4. the circumstances that led to the.....
Judgment:
ORDER

1. These two revision petitions could be disposed of by a common order as they arise out of common judgment.

2. The sole but important question which arises in these revisions is, what are the rights of an Official Receiver vis-a-vis the son's share in the joint family property in order to discharge the untainted debts of an insolvent -father even though such share in the property stands attached inexecution of a decree obtained against the father and son.

3. C.R. P. No. 5524 of 1980 arises out of an order passed in E.P. No. 158 of 1971 in O.S. No. 5 of 1971 and a letter of the Official Receiver in E.P. No. 362 of 1970 in O.S. No. 117 of 1970; and C.R.P. No. 5525 of 1980 arises out of an order passed in E.P. No. 270/75 in O.S No. 117 of 1970.

4. The circumstances that led to the filing of these revisions may be set out. One S. Basavapunnaiah filed I.P. No. 29 of 1969 in the Subordinate Judge's Court, Vijayavada on 1-11-1969 on the ground that he was unable to discharge his debts. The debts owed by him were shown in the A schedule to the Insolvency petition, and the entire properties belonging to him and his son Jaganmohan Rao were shown in the B. Schedule to the said Insolvency Petition. But the Insolvency Petition was dismissed. However, on appeal in A.S. No. 10 of 1971, the District Judge, Krishna, by his order dt. 19-8-1971, adjudged him an insolvent, and the properties were vested in the Official Receiver for the purpose of administration. Needless to mention that the order of adjudication relates back to 1-11-1969, the date of presentation of the Insolvency Petition.

5. One Babu Rao obtained a decree against the insolvent Basavapunnaiah and his son in O.S. No. 5 of 1971 and field E. P. No. 158 of 1971 before the Subordinate Judge; Vijayawada and sought attachment and sale of the properties of both the judgment-debtors. Attachment was ordered on 16-9-1971. On that, the son Jaganmohan Rao field a counter-objecting that inasmuch as his father was adjudged an insolvent and the property had vested in the Official Receiver, the decree-holder had no right to bring his share in the properties to sale. The learned Subordinate Judge, Vijayawada, rejected his objection by his order dt. 6-3-1971. Aggrieved by that, he preferred C.R.P. No. 1109 of 1977 to this court.

6. One Dharma Das obtained a decree in O.S. No. 117 of 1970 and field E.P. No. 362 of 1970 against four judgment-debtors two of whom are the judgment-debtors in E.P. No. 158 of 1971. The Official Receiver in whom the properties of the insolvent vested filed E.A. No. 1030 of 1971 for delivery of the properties. The decree-holder opposed the petition on the ground that the share of the son of he insolvent cannot be delivered. Rejecting that contention, the court directed delivery of possession to the Official Receiver by its order dt. 25-9-1971. Against that order, he decree-holder preferred C.M.A. No. 15 of 1972. As a consequence of the order in E.A. No. 1030 of 1971, E.P. No. 362 of 1970 was dismissed. Against the said dismissal, the decree holder preferred C.M.A. 464 of 1971.

7. The aforesaid C.R.P. No. 1109 of 1972, C.M.A. No. 464 of 1971 and C.M.A. No. 15 of 1972 were disposed of by a common order by a Full Bench of Court; and that decision is reported in : AIR1975AP278 . In the said judgment, this court held, that the decree holder is entitled to attach the son's interest as the Official Receiver had not exercised the right of the father to bring the son's share of the property to sale, and accordingly dismissed the C.R.P. As regards E.A. No. 1030 of 1970 filed by the Official Receiver u/s. 52 of the Insolvency Act of delivery of possession of the properties described in the schedule to E.P. No. 362 of 1970, this court below and consequently dismissed C.M.A. No. 15 of 1972. This court also allowed C.M.A. No. 464 of 1971 holding that, since only the insolvent father's property and the insolvent's right to dispose of the son's interest in the joint family property vest in the Official Receiver and not the share of the son as such, E.P. No. 362 of 1970 was maintainable and therefore the executing Court could proceed with the attachment and sale of the son's share.

8. Thereafter, the Official Receiver filed I.A. No. 1375 of 1975 in I.P. No. 29 of 1969 u/ss. 4 and 5 of the Provincial Insolvency Act impleading the insolvent and his son as respondents 1 and 2 and the creditor as respondents 3 to 7 praying for a declaration that the half share of the 2nd respondent in the joint family properties of he respondents 1 and 2 is able for discharge of the debts shown in the schedule annexed to the petition in I.P. No. 29 of 1969 and to vest the 2nd respondent's share in him. The Court, however, dismissed the said application holding that it does not lie. Thereupon, the Official Receiver preferred C.M.A. No. 68 of 1978 before the District Judge. Krishna, who, by his order dt. 9-11-1979, allowed the Civil Miscellaneous Appeal and set aside the order in I.A. No. 1375 of 1975 in the following terms:

'It is declared that the half share of the 2nd respondent in the joint family properties of the respondents 1 and 2 is liable for discharge of debts shown in the A schedule annexed to I.P. No. 29 of 1969 and the executing Court shall deliver possession of even the 2nd respondent's share in the joint family properties to the Official Receiver. This order shall not be construed as deciding that the Official Receiver can sell the second respondent's half share in the joint family properties for the purpose of satisfying the debts of the general body of creditors of the insolvent, 1st respondent.'

Thereafter, when the decree-holder in E.P. No. 158 of 1971 and E.P. No. 362 of 1970 filed petitions in the court of the Subordinate Judge, Vijayawada, for bringing the properties to sale in public auction for realising the decretal amount, the Official Receiver sent a letter dt. 8-8-1980 to the executing Court wherein E.P. No. 158 of 1971, E.P. No. 362 of 1970 and E.P. No. 270 of 1975 were sought to be executed, requesting that in vie of the orders of the District Court in C.M.A. No. 68. of 1978, the attachment over the schedule property be raised and the properties delivered to him for the benefit of the general body of the creditors. The executing court dismissed the letter of the official Receiver by holding as under:-

'It is no doubt true that the Hon'ble District Judge left the question whether the son's share is vested in the official Receiver and whether Official Receiver can sell such share of the son in private sale, open. But at the same time a perusal of the High Court Full Bench decision of our High Court clearly goes to show that the Official Receiver is at liberty to apply to the Insolvency Court for bringing the son's interest also to sale provided the debts of the Insolvent father to be discharged are proved to be not incurred for illegal or immoral purposes for the pious obligation of the son to discharge the debts of the father incurred while he was joint which are not tainted with Illegality or immorality continued even after partition. In the said circumstances, it is the duty of the Official Receiver to approach the Insolvency Court and prove that the said debts of the insolvent father of the 2nd respondent are not immoral or illegal and on the other hand they are binding on the 2nd respondent and he is also liable to discharge them for the reason that the debts are not tainted with immorality or illegality and then the Official Receiver should proceed against the properties of the son of the insolvent. So at this stage I do not think that the execution court has got any power to decide whether the debts are tainted with immorality or illegality and on the other hand it is for the Official Receiver to prove to the insolvency court and get the findings in his favour to that effect and then sell the property of the son of the insolvent in private sale.'

The executing Court further held,

'On the other hand this court is bound to execute the decree and proceed with the above said execution proceedings. So I order further steps in both the said E.Ps. and I also further hold that the letter of the Official Receiver to the extent to raise the attachment is liable to be dismissed, and the same is dismissed accordingly. As the Official Receiver is already is possession of the property I order that he should continue to be in possession of the same subject to the above. So far as the said E.Ps. are concerned, they have to be proceeded with till the Official Receiver gets the necessary declaration or relief to the effect that the said debts are not tained with illegality or immorality and they are binding on the interest of the undivided son of the insolvent in the joint family properties; in the meanwhile the decree - holders in the above said E.Ps are entitled to proceed with further.'

Hence these two revisions.

9. Sri C. Seetharamaiah, learned counsel for the petitioner, raised two fold contention. One, when once the insolvency Court grants a declaration that the son's share is liable for the debts of the father, an individual creditor cannot proceed with the execution of his decree against the son's share for his exclusive benefit. Secondly, a decision under Ss. 4 and 5 of the Provincial Insolvency Act is judgment is remand and is binding on all. In any event, the two decree-holders, being parties to those proceedings, are bound by the decision.

10. The contra contentions of Sri Appa Rao and Sri Haranath appearing for the respondents-decree-holders are: Under Ss 4 and 5 of the Provincial Insolvency Act, the Court cannot vest the son's share in the Official Receiver. It is only a right to sell the share u/s. 28-A of the said Act that is vested. The order under revision does not arise u/ss. 4 and 5 of the Provincial Insolvency Act as the said order arises under Execution proceedings initiated by the decree-holder; and till a final decision is arrived at u/ss. 4 and 5 of the Provincial Insolvency Act, when the son's share of property is sought to be sold, no intervention in execution proceedings could be allowed. Therefore, the question of handling over the property to the Official Receiver does not arise. The application field u/ss. 4 and 5 of the Provincial Insolvency Act was rejected and also on appeal it was confirmed and the same became final. In any event, the vesting of the son's share in the Official Receiver can never arise as it is only a right of the Official Receiver to deal with the son's share, on being proved that the debts of the father are not illegal or immoral, it can at best to be said to arise. So unless that stage is reached, the Official Receiver cannot interfere with the decree-holder's right to sell the properties attached in the execution proceedings.

11. On the basis of the above contentions, two questions stand out distinct for being answered; (1) whether the Official Receiver has to initiate any proceedings in order to exercise his right to deal with or dispose of the property of the son's share, to establish that the debts of the father were (not?) illegal or immoral? (2) whether the Official Receiver has initiated action u/ss. 4 and 5 of the Provincial Insolvency Act to exercise the rights vested in him for the disposal of the son's share in the undivided property for the benefit of the general body of the creditors.

12. At the outset, it may be stated that the decree-holders creditors have been parties to the proceeding arising out of the insolvency proceedings initiated by or at the instance of the Official Receiver on the one hand and the son on the other which eventually culminated in the decision of the Full Bench of this Court wherein C.R.P. No. 1109 of 1972, C.M.A. No. 15 of 1972 and C.M.A. No. 464 of 1971 were decided and disposed of by a common judgment.

13. In E. P. No. 158 of 1971, the son raised an objection that the creditor cannot execute the decree inasmuch as the property of the joint family is vested in the Official Receiver in insolvency proceedings wherein the father was adjudged an insolvent and, therefore, the decree cannot be proceeded with E.A. No. 1030 of 1971 filed by the Official Receiver in E.P. No. 362 of 1970 was on the ground that the property attached may be given delivery of to the Official Receiver for this discharge of the debts stated in the (Annexure) to the Insolvency Petition. In all these cases, the son himself being a party admitted that the debts of the father are binding on the joint family property and, therefore, it was taken to be that the debts are not tainted debts and the same became final and binding. In fact, the decree-holders could have raised such objections if they so desired. Inasmuch as the only person who could have raised any such objection was the son and since he himself volunteered by conceding that the said debts were not for immoral or illegal purposes, his share also came to be subjected to defray the debts contracted by the father. That apart, in C.M.A. No. 68 of 1978 which arose out of insolvency proceedings filed in I.A. No 13575 in I. P No. 29 of 1969 to which the father, the son and the decree-holders in the aforesaid E.P. were parties, it was held,

'But it may be stated that the 2nd respondent had not disputed the fact that the debts of his father are just debts and that his share in the joint family properties is liable for the satisfaction of these debts. In fact, the contention of the 2nd respondent in E.A. No. 1030 of 1971 (is) that his share also vested in the Official Receiver and the Official Receiver alone was competent to sell the share for the satisfaction of the debts of the creditors, who are shown in schedule of the Insolvency Petition. Therefore, there cannot be any objection and in fact, there is no objection for granting the declaration that the 2nd respondent's half share in the joint family properties is liable for the discharge of debts, shown in the A schedule annexed to I. P. No. 29 of 1969. The opposition is only to the prayer of the Official Receiver for vesting the 2nd respondent's share in him.'

14. If that be so, and it clearly emerges from the foregoing. It is too late in the day to contend that the Official Receiver, has once again to initiate the necessary proceedings to get it adjudicated that the debts of the father as shown in Annexure to I.P. No. 29 of 1969 were untained ones. Hence, I am of the undoubted view that it is no more necessary for the Official Receiver to take any steps for getting the debts of the father adjudicated as (not?) immoral and illegal.

15. The salient features of the Full Bench decision in S. Jaganmohan Rao v. U. Babu Rao, : AIR1975AP278 (FB) covering C.R.P. No. 1109 of 1972, C,M.A. No. 464 of 1971 and C,M.A. No. 15 of 1972 may be set out: The Full Bench summed up in para 41 as under:

'To sum up: Upon a father, who is the Kartha of a joint Hindu family consisting of himself and his sons, being adjudged an insolvent, what vests in the Official Receiver under the Provincial Insolvency Act is the self-acquired property, his undivided share in the joint family property and his power of alienation over the interests of the sons in the joint family property provided the debts of the father are not tainted with illegality or immorality. The interest of the sons or their shares as such in the joint family property does not vest in the Official Receiver. It is only the father's power to alienate this interest or share that vests in the Official Receiver. On such vesting the Official Receiver has three courses open to him with respect to the interests of the sons in the joint family property:

(1) to exercise the power of insolvent father to dispose of by private sale,

(2) to apply to the Insolvency Court u/ss. 4 and 5 of the Provincial Insolvency Act, and

(3) to apply u/s. 52 of the Provincial Insolvency Act to the Court executing the decree u/s. 52 for delivery of possession of the property and take proceedings for bringing the properties to sale.

The power of the father to dispose of his son's share in the joint family properties by private sale, however, subsists only so long as there is no disruption of the joint family status. That power comes to an end when that status is disturbed either by the institution of a suit for partition by the sons or by the attachment of the son's interest in the joint family properties by a creditor. Just as the father's power to alienate the son's interest is extinguished on the happening of any of above mentioned contingencies, so also the power of the Official Receiver in this behalf is co-extensive with that of the father. It before the exercise of this power by the Official Receiver any of the above contingencies occur, i.e., the joint family status is disrupted by actual partition, or by the institution of a suit for partition, or by the attachment of the son's interest by any creditor, then the Official Receiver cannot proceed to dispose of the son's interest by private sale.

XX XX XX Whether the attachment of the son's interest is before the adjudication of the father as an insolvent or after the adjudication, it makes no difference so far as the son's interest in the joint family properties is concerned. Once there is an attachment of the son's interest by a creditor whether before or after the adjudication the Official Receiver's power to dispose of their interest or share by private sale is lost, that power could have been exercised only before the attachment.

XX XX XX The Official Receiver, however, may apply to the Insolvency Court for bringing the son's interest also to sale provided the debts of the insolvent father to be discharged are proved to be not incurred for illegal or immoral purposes, for the pious obligation of the son to discharge the debts of the father incurred while he was joint which are not tainted with illegality of immorality continues even after partition. However as the attaching creditor is not forthwith entitled to possession of the son's interest in the property the Insolvency Court may, notwithstanding the attachment put the Official Receiver in possession of the son's interest in the joint family property.'

Having so held, the Full Bench eventually dismissed the Civil Revision Petition and allowed E.A. No. 1030 of 1970 filed u/s. 52 of the Provincial Insolvency Act for delivery of possession of the property described in the schedule annexed to the Execution Petition, and allowed E.P. No. 362 of 1970 filed by the Official Receiver, resulting in the dismissal of C.M.A. No. 15 of 1972. However, C.M.A., No. 464 of 1971 was allowed directing the execution of the decree in O.S. No. 117 of 1970 under E.P. No. 362 of 1970. In view of this pronouncement, and as per the guidelines therein, the Official Receiver filed before the 2nd Addl. Sub-ordinate Judge, Vijayawada, I.A. No. 1357 of 1975 in I.P. No. 29 of 1969 specifically u/ss.4 and 5 of the Provincial Insolvency Act impleading the insolvent father and the son as respondents 1 and 2 respectively and the decree-holders creditors as respondents 3 to 7, for a declaration that the half share of the 2nd respondent in the joint family properties of the respondents 1 and 2 is liable for discharge of the debts shown in the schedule annexed to the Insolvency Petition and for vesting the 2nd respondent's share in him (Official Receiver). The learned Subordinate Judge dismissed I.A. No. 1357 of 1975 holding that the declaration sought does not lie. However, on appeal in C.M.A. No. 68 of 1978, the District Judge, Krishna, framed the point for consideration as under:

'Whether the Official Receiver is entitled to get the declaration as prayed for and for an order vesting the 2nd respondent's (son's) share in him?' and answered the same in the following terms, 'As already pointed out, it is not the contention of the respondents 1 and 2, that the 2nd respondent's share is not liable for the satisfaction of the debts of the creditors shown in A schedule of the insolvency petition, and the declaration sought for by the Official Receiver is unnecessary because nobody has disputed that proposition and therefore, there can be no objection for the respondents to grant the declaration. The only objection raised by the respondents 3 to 7 is that the 2nd respondent's share cannot be vested in the Official Receiver for the purpose of selling the same by private sale.'

After making those observations, the District Judge allowed the C.M.A. on 9-11-1979 in the following terms:

'It is declared that the half share of the 2nd respondent in the joint family properties of respondents 1 and 2 is liable for discharge of debts shown in the A schedule annexed to I.P. No. 29 of 1969 and the executing Court shall deliver possession of even the 2nd respondent's share in the joint family properties to the Official Receiver. This order shall not be construed as deciding that the Official Receiver can sell the 2nd respondent's half share in the family properties for the purpose of satisfying the debts of general body of creditors of the insolvent, 1st respondent.'

16. It is therefore when the decree holders initiated proceedings in E.P. No. 158 of 1971, E.P. No. 270 of 1975 and E.P. No. 362 of 1970 in the Court of the Subordinate Judge, Vijayawada, the Official Receiver sent a letter dt. 8-8-1980 in E.P. No. 362 of 1970 requesting that in view of the order of the District Judge in C.M.A. No. 68 of 1978, the attachment of the schedule property has to be raised and the property should be delivered to him for the benefit of the general body of creditors. The learned Subordinate Judge rejected that letter observing : -

' . . .. . . . it is the duty of the Official Receiver to approach the Insolvency Court and prove that the said debts of the insolvent father of 2nd respondent are not immoral or illegal . . . . . and then the Official Receiver should proceed against the properties of the son of the insolvent.'

The learned Subordinate Judge, however, thereafter held that the Court was bound to execute the decree not proceed with the execution proceedings. It is this order that is challenged in this revision.

17. The order under revision is erroneous, and it is apparent for two good reasons. Firstly, the learned Subordinate Judge has not correctly comprehended the decision of the Full Bench of this Court in S. Jaganmohan Rao v. U. Babu Rao : AIR1975AP278 (FB) (supra) and also the judgment in C.M.A. No. 68 of 1978, when he held that the Official Receiver, in order to exercise his right to sell the son's share of the property which was in his possession, should first establish that the debts of the insolvent-father are not tainted ones. Neither the Full Bench decision nor the judgment in C.M.A No. 68 of 1978 has held any where that it is incumbent on the Official Receiver to first establish that the debts of the insolvent-father were not contracted for immoral or illegal purposes before he seeks to exercise the right of sale of the son's share. On the contrary the finding of the Court in C.M.A. No. 68 of 1978 is categorical, namely, that the son has no disputed the fact that the debts of his father are just deborts and that his share in the joint family property is liable for the satisfaction of the debts. The Court further found that the son's contention in F.A. No. 1030 of 1971 was that his share also vested in the Official Receiver and the Official Receiver alone was competent to sell his share for the satisfaction of the debts of the creditors. This apart, it is quite obvious that the son, despite being a party to the decrees and also to the insolvency proceedings throughout, has not raised any objection or dispute as to the nature of the debts. Therefore, the irresistible inference is obvious, and that is, he admitted that the debts of his insolvent-father were untainted. Hence the insistence by the Lower Court that the Official Receiver will have to de novo take steps to get the debts of the insolvent-father adjudicated as not tainted with immorality or illegality, is clearly erroneous.

18. Secondly, the lower court again failed to appreciate and comprehend properly the conclusion and operative portion of the judgment in C.M. A No. 68 of 1978. The operative portion of the judgment in C.M.A. No. 68 of 1978. The operative portion of the judgment in C.M.A. No. 68 of 1978 is emphatic in that it declared that the half share of the son in the joint family properties is liable for discharge of debts shown in the A schedule to the Insolvency Petition Petition and that the executing Court shall deliver possession of even the son's share to the Official Receiver. So, the language is quite clear and does not bristle with any ambiguity whatsoever. However, it may be stated that there is ambiguity in the later part of the operation portion of the judgment in C.M.A. No. 68 of 1978 as it reads,

'This order shall not be construed as deciding that the Official Receiver can sell the 2nd respondent's half share in the joint family properties for the purpose of satisfying the debts of the general body of creditors of the insolvent.' But, in my judgment, what all it means is that the Official Receiver cannot sell the half share of the son by private sale. So construed, there is no equivocality in the judgment in C.M.A. No. 68 of 1978, and the executing Court has to allow the Official Receiver by delivering to him the possession of the son's share in the joint family property to effect its sale for the benefit of the general body of creditors other than by private sale. Therefore, the order under revision also suffers, on this score, from incorrect comprehension of the judgment in C.M.A. No. 68 of 1978.

19. It must, however, be stated that neither the insolvency Court in its judgment in C.M.A. No. 68 of 1978 nor the executing Court in its order under revision, has adjudged as to what steps the Official Receiver should take in discharging the untainted debts of the insolvent father vis-a-vis the son's share in the joint family property, otherwise than by private sale.

20. In Official Assignee, Madras v. Ramachandra, AIR 1928 Mad 735, the Full Bench of the Madras High Court held,

'After the adjudication of the father as an insolvent and the vesting of his rights in the Official Assignee, the institution of a partition suit by the sons of the insolvent effects a severance of the joint family status and, therefore, the power to sell their shares by private sale, of the Official Assignee, who steps into the shoes of the father, is extinguished, although the Official Assignee by proper proceedings in the insolvency Court may proceed against their shares.'

In Ramachandra v. Official Assignee, AIR 1931 Mad 317, a Division Bench of the Madras High Court held,

'Although owing to the division of status brought about by a suit for partition instituted by the sons after their father's insolvency, the father and the Official Assignee lose the right of private sale of the family property including the shares of the sons, it is open to the Official Assignee to obtain a declaration against the sons and get the family property including their shares therein sold by or through Court. Section 7 gives the widest powers to the Insolvency Court to go into such a question and to declare the liability of the son's shares in the family property for the proved and just debts of the father insolvent and make all necessary orders for this realisations.'

In Subba Rao v. Official Receiver, West Godavari, : AIR1965AP52 , Venkatesan, J., held, (at p. 59):

'The effect of an attachment of the son's share is not to create a charge of lien in favour of the attaching-creditors. But it only puts an end to the power of disposal of the father and of the Official Receiver u/s. 28-A of the Act to dispose of son's shares. It does not preclude the Official Receiver from obtaining a declaration from the Insolvency Court that the son's shares are liable for the discharge of the debts due to the several creditors which are not illegal or immoral, and have the property sold through Court.'

Similarly, Kumarayya, J., in Official Receiver v. Suryanarayana, : AIR1969AP437 , held:

'Under S. 4 of the Provincial Insolvency Act the Insolvency Court has full power to decide questions arising in any case of insolvency which is within the cognisance of the Court * * *. The Court has full plenary powers, subject of course to the provisions of the Act, to decide, if it thinks it necessary or expedient in the interest of justice and for the purpose of making a complete distribution of the property . . . . . . After the declaration of the father as insolvent, on account of partition which was effected by reason of he institution of a suit, only the remedy of the Official Receiver to sell the property privately is lost; but the substantial right to enforce the debts due to the creditors against the sons remains and that he can work out by suitable proceedings, though not private sale, the liabilities of the sons.'

Similar is the view taken by the Full Bench of this court in S. Jaganmohan Rao v. U. Babu Rao : AIR1975AP278 (FB) (supra), in analogous circumstances, when it held that, on vesting of the power to alienate the sons interest in the joint family property in the Official Receiver, it is open to him under the provisions of Provincial Insolvency Act 'to take proceedings for bringing the properties to sale.'

21. It clearly emerges from the above conspectus that it is competent for the Official Receiver to get the son's share in the joint family property sold through Court through not by private sale, notwithstanding that it is attach in execution proceedings by its creditors-decree-holders, so as to discharge the debts of the insolvent father for the benefit of the general body of creditors.

22. In this case, it is established that the debts are not tainted and, the O.R. having initiated proceedings u/ss. 4,5 and 52 of the Provincial Insolvency Act, came to be in possession of the son's share though it is subject to the order of attachment obtained by the creditors decree-holders.

23. To sum up:

(1) Under S. 4 of the Provincial Insolvency Act, the insolvency Court has full plenary powers to adjudicate upon all the questions arising in any case of insolvency, if it thinks expedient and in the interest of justice for due and proper distribution of the insolvent's property.

(2) Upon a father being adjudged an insolvent, what vests in the Official Receiver under the Provincial Insolvency Act is his self-acquired property, his undivided share in the joint family property and his power of alienation over the interests of the sons in the joint family property provided the debts of the father are not tainted with illegality or immorality. It is only the father's power to alienate the interest or share of the son that vests in the Official Receiver but not the interest of the son or his share as such in the joint family property.

(3) On such vesting, the Official Receiver has three courses open;

(a) to exercise the power of the insolvent-father to dispose of by private sale;

(b) to apply to the Insolvency Court u/s 4 of the Provincial Insolvency Act; the property.

(4) Once there is an attachment of son's interest or share in the joint family property by a creditors, whether before or after the adjudication, of the father as an insolvent, the Official Receiver's power to dispose of such interest of share by private sale is lost.

(5) The Official Receiver, however, is entitled to delivery of possession of the son's share by getting the attachment raised.

(6) The Official Receiver, after taking delivery of possession of the son's share, stands vested with a right to get it sold through or by Court but not by private sale.

24. In view of the above, the order under revision is set said. The attachment made in E.P. No. 158 of 1971, E.P, No. 362 of 1970 and E.P. NO. 270 of 1975 is raised. The Official Receiver, who is in possession of the son's share in the joint family property u/s. 52 of the Provincial Insolvency Act, shall continue to be in possession; and he shall be entitled to get the son's share sold only through Court by taking appropriate proceedings, for the benefit of the general body of creditors mentioned in B Schedule to the insolvency petition, I.P. No. 29 of 1969. The Civil Revision Petitions are accordingly allowed. No costs.

25. Revisions allowed.


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