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Smt. Sumita Devi Vs. Daya Shankar Mehrotra - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 1947 of 1956
Judge
Reported inAIR1967All45
ActsProvincial Insolvency Act, 1920 - Sections 34, 34(2), 44(2) and 61(3)
AppellantSmt. Sumita Devi
RespondentDaya Shankar Mehrotra
Appellant AdvocateYashoda Nandan, Adv.
Respondent AdvocateM.N. Shukla, Adv.
DispositionAppeal allowed
Excerpt:
.....first day of tenancy - future liability of insolvent incurred before date of insolvency provable - rent due from insolvent tenant after date of insolvency and before date of discharge would constitute provable debt - order of discharge - insolvent released from such debt - expenses of administration not part of provable debt. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school..........judge kanpur, affirming the decree of the learned munsif for the dismissal of the plaintiff's suit the learned single judge before whom this appeal came up for decision has referred it for disposal to a division bench because in his opinion thequestion raised in this appeal is of some importance. 2. the facts leading to this second appeal, briefly stated, are that one sukhdeo prasad, a tenant of certain premises, was declared in solvent on 11-7-1950, and his estate was taken over by the official receiver on 22-7-1950 though sukhdeo prasad was adjudged insolvent no order for his discharge was passed till 31st december, 1950 sukhdeo prasad had taken two portions of the premises nos 25, 26. kirachikhana, kanpur, at a monthly rent of rs 40 and rs 31/25 (in all rs 71/25 p.) for purposes.....
Judgment:

S.D. Khare, J.

1. This is plaintiff's second appeal directed against the judgment and decree dated 31st May, 1956 passed by the learned Civil and Sessions Judge Kanpur, affirming the decree of the learned Munsif for the dismissal of the plaintiff's suit The learned single Judge before whom this appeal came up for decision has referred it for disposal to a Division Bench because in his opinion thequestion raised in this appeal is of some importance.

2. The facts leading to this second appeal, briefly stated, are that one Sukhdeo Prasad, a tenant of certain premises, was declared in solvent on 11-7-1950, and his estate was taken over by the official receiver on 22-7-1950 Though Sukhdeo Prasad was adjudged insolvent no order for his discharge was passed till 31st December, 1950 Sukhdeo Prasad had taken two portions of the premises Nos 25, 26. Kirachikhana, Kanpur, at a monthly rent of Rs 40 and Rs 31/25 (in all Rs 71/25 P.) for purposes of godown and machine room respectively. The godown was vacated on the 1st December, 1950, but the machine room remained locked till after 31st December, 1952 The claim of the plaintiff, therefore, was for the rent of both the premises upto 1st December. 1950, and thereafter, for the rent of the machine room only upto 31st December. 1952.

3. The suit was contested by the Official receiver on the allegations that the amount claimed was a provable debt under the Insolvency Act, and inasmuch as the plaintiff did not prove her debt under the Insolvency Act nor did she obtain the leave of the Insolvency Court to file the suit the same could not be maintained Another defence taken by the official receiver was that no property of the insolvent remained in those premises during the period in suit, and, therefore, the official receiver representing the estate of Sukhdeo Prasad could not be regarded to be the tenant of the plaintiff

4. The plaintiff, in reply, contended that the official receiver must be deemed to be in possession of both the premises in question during the period in suit and in any case she was entitled to recover the amount due to her as expenses of administration which could be recovered from the official receiver by means of a suit.

5. Sukhdeo Prasad died during the pendency of the suit, and his widow was brought on the record in his place- The learned Munsif held that the right to sue survived to Smt. Sumita Devi. that she is now the owner of the property in suit, that the tenancy rights did not vest in the official receiver and that in view of the fact that Sukhdeo Prasad had approached the insolvency Court but had not been able to gel any relief from it his suit was bar red under the provisions of the Insolvency Act The learned Munsif therefore, refused to grant any relief to the plaintiff against the official receiver The judgment and decree of the learn ed Munsif were affirmed by the learned Civil and Sessions Judge on the findings that the debt in question was a provable debt that the rent for the premises in question for the period in suit could not be claimed as administration charges and that the claim of the plaintiff was barred under Sub section (2) of Section 28 of the Insolvency Act. The learned Court of first appeal further held that the plaintiff's suit was not maintainable because permission of the Insolvency Court had not been taken to file thatsuit. All questions of fact involved in the suit were left undetermined by the Court of the first appeal because in its opinion the appeal could be disposed of on legal grounds only.

6. This second appeal was referred to a Division Bench by a learned single Judge of this Court because in his opinion the main point involved in the appeal was whether the rent due from a monthly tenant, who is adjudged insolvent, for a period subsequent to his adjudication and prior to his discharge could constitute a debt provable within the meaning of Sub-section (2) of Section 34 of the Provincial Insolvency Act and whether under Sub-section (2) of Section 44 of the said Act an order of discharge would release the insolvent from such debt.

7. We have heard learned counsel for both the parties Had the insolvent himself remained in possession of the premises the finding of the learned Civil and Sessions Judge that the claim of rent as against the insolvent constituted a debt provable within the meaning of Sub-section (2) of section 34 of the Provincial Insolvency Act could not be disturbed. In the case of a tenant from month to month the obligation to pay rent is not incurred every month on the first day of the month of tenancy but is incurred when the monthly tenancy was first taken. Sub-section (2) of Section 34 definitely provides that even the future liabilities of the insolvent shall be provable if they are by reason of any obligation incurred before the date of his being adjudged insolvent. The rent due from the insolvent for the premises occupied by him after he had been adjudged insolvent and prior to his discharge would there fore, constitute a debt provable within the meaning of Sub-section (2) of Section 34 of the Provincial Insolvency Act and under Sub-section (2) of Section 44 of the said Act an order of discharge would release the insolvent from such debt We are supported in this view by the case of Lachmi Narayan v. Amulyadhan Auddy, ILR (1950) 1 Cal 628 In which it was held that the rent due from a monthly tenant, who is adjudged insolvent, for a period subsequent to his adjudication and prior to his discharge would constitute a debt provable within the meaning of Sub-section (2) of Section 34 of the Provincial Insolvency Act. The learned Judges who decided that case took that view because in their opinion the obligation for the payment of debt becoming due after the date of adjudication was created not after the date of the adjudication but before it when the premises first came into the tenancy of the insolvent. For this proposition they relied on the case of Utility Articles .. ILR (1943) Bom 553 : (AIR 1943 Bom 306) It is true that a contrary view was taken in the case of Official Trustee of Bengal v Kissen Gopal : AIR1930Cal459 . by a Division Bench of the Calcutta High Court which expressed the view that in case of rent due from an insolvent for a period subsequent to the date of adjudication 'there was no such antecedent obligation which accrued for the liability to pay rent for theperiod after the adjudication.' However, the same was not considered to be good law by the Calcutta High Court itself in the later case of Lachmi Narayan, ILR (1950) 1 Cal 628 (supra) We respectfully agree with the view taken in the case of Lachmi Naravan. TLR (1950) 1 Cal 628.

8. It has, however, been contended by the learned counsel for the appellant that inasmuch as the premises in question were not in occupation of the insolvent himself but were either in the occupation of the Official Receiver in connection with the administration of the property of the insolvent or in possession of some third party who had got the machine attached and a supurdar appointed (Sic) The Court of first appeal having left the question of fact undecided, it is difficult to say what the exact position was it has further been contended that in case the Official Receiver was in possession of the premises in connection with the administration of the property of the Insolvent the plaintiff's claim or at least the whole of it--could not be thrown out because the Official Receiver was bound to pay the rent of the premises occupied by him for purposes of administration as expenses of administration He has further contended, and in our opinion with some force, that the expenses of administration claimed from the Official Receiver is not provable under Sub-section (2) of Section 34 of the Provincial Insolvency Act. and a suit for its recovery can be brought against the Official Receiver in case the claim has not been preferred before the insolvency Court it-self and rejected by it In case of such rejection the order becomes final unless an appeal is filed against it -- Vide section 75 of the Provincial Insolvency Act The learned counsel has very correctly pointed out that there is nothing on the record to show that the insolvency Court had disposed of the matter in respect of the entire period for which rent was claimed. He has therefore, submitted that the present appeal cannot be disposed of unless the first appellate Court records its clear findings on the questions of fact involved in the case

9. It is open to a person claiming expenses of administration from the estate of the insolvent to claim the same either in the insolvency proceedings or by means of a suit The expenses of administration fall under Clause (3) of Section 61 of the Provincial Insolvency Act and cannot be regarded to be provable debt under Section 34 of the said Act There is. therefore, nothing in the Provincial Insolvencv Act itself to bar the institution of a suit for the recovery of the expenses of administration which were at no time claimed in the insolvency proceedings or regarding which the claim was at no time rejected by the Insolvency Judge All that could be shown to us during the course of arguments was that it was only in respect of a portion of the period in suit that such claim was made and rejected by the Insolvency Judge on 6-1-1951 while with regard to another portion the order passed by the Insolvency Judge on 3-8-1951 indicated that the claim should be made before the pro-per forum. That portion of the claim could certainly be made in a proper forum, by means of a suit.

10. It was held in the case of Sarode Vithoba v. Madanlal Lalchand & Co., AIR 1955 Mys 29, which came up before the Mysore High Court in second appeal, that the rent due from the date on which the interim receiver took possession of the movables and locked and sealed the premises upto the date of the sale of the movables had to be treated as 'expenses of administration or otherwise' within the meaning of Sub-section (3) of Section 61 of the Provincial Insolvency Act. Similar view was taken in the case of : AIR1930Cal459 , in an appeal from an order passed under Section 75 of the Provincial Insolvencv Act. disallowing such claim We respectfully agree with the view taken in those cases.

11. It has vet to be considered by the lower appellate Court whether any order has been made in the exercise of insolvencv jurisdiction by the insolvencv Court in respect of the rent claimed for any period subsequent to 3-8-1951 The first appellate Court will also have to decide whether the premises in question remained in the actual or constructive possession of the official receiver and whether he remained liable for the payment of its rent during the period in question. Unless the questions of fact are determined by the first appellate Court, it will not be possible to dispose of this case in second appeal.

12. The result is that the appeal is allow ed. the judgment and decree of the learned Civil and Sessions Judge passed on 31st May, 1956. are set aside and the case is remanded to the first appellate Court for decision in accordance with law in the light of the observations made above. The costs shall abide the result.


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