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Om Prakash and anr. Vs. Moti Ram - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1926All447; 94Ind.Cas.175
AppellantOm Prakash and anr.
RespondentMoti Ram
Excerpt:
- - their lordships clearly held that the effect of the insolvency of the father was not at once to vest the entire property in the official receiver......the defence raised was that the father having been declared an insolvent, the entire family property vested in the receiver, and that, therefore, the sons had no such right left in the family property as would entitle them to maintain the suit for pre-emption. their lordships of the privy council considered several sections of the presidency towns insolvency act iii of 1897 and came to the conclusion that the insolvency of the father did not deprive the sons of their right to maintain a suit for pre-emption. the following words from the judgment will bear quotation:it may be that under the provisions of section 62 or in some other way that property (property of the sons) may in a proper case be made available for payment of the father's just debts; but it is quite a.....
Judgment:

Mukerji, J.

1. This appeal arises out of certain insolvency proceedings. One Lachhman Das became an insolvent and the Official Receiver, B. Moti Ram, took possession of a certain property of the insolvent and sold the same to a certain party. Two sons of the insolvent put in a petition before the learned District Judge praying that two-thirds of the property should not be delivered to the purchaser, but should be reserved for themselves. They said that the father had only a third share in the property, and that alone should go to the purchaser. The Official Receiver produced the case of Bawan Das v. C.M. Chiene AIR 1922 All 79 before the learned Judge, and following that case the learned Judge dismissed the petition of the sons. The sons have appealed.

2. It has been argued that the authority of this Court should be treated as having been overruled by a recent pronouncement of their Lordships of the Privy Council to be found reported in Sat Narain v. Behari Lal .

3. It has been said on the respondent's behalf that in this Court and in other Courts the view has always been taken that where a father in a Hindu family governed by the Mitakshara law has been declared an insolvent, the receiver is entitled to sell not only the share of the father that will fall on him on the partition, but the entire property in his hand belonging to the whole family consisting of himself and his sons. This view is supported by the ruling of this Court referred to above. The case of Official Assignee v. Ram Chandra Ayyar AIR 1923 Mad 55 also takes the same view. Let us now consider the Privy Council case quoted by the learned Counsel for the appellant. A certain Hindu father, Rai Bahadur Srikishen Das, had two sons. The father was declared an insolvent. Thereafter the sons brought a suit for pre-emption with respect to certain property sold in the neighbourhood. The defence raised was that the father having been declared an insolvent, the entire family property vested in the receiver, and that, therefore, the sons had no such right left in the family property as would entitle them to maintain the suit for pre-emption. Their Lordships of the Privy Council considered several sections of the Presidency Towns Insolvency Act III of 1897 and came to the conclusion that the insolvency of the father did not deprive the sons of their right to maintain a suit for pre-emption. The following words from the judgment will bear quotation:

It may be that under the provisions of Section 62 or in some other way that property (property of the sons) may in a proper case be made available for payment of the father's just debts; but it is quite a different thing to say that by virtue of his insolvency alone it vests in the assignee, and no such provisions should be read into the Act.

4. As I read the judgment of their Lordships of the Privy Council all that was decided was that it might be open to the creditor or the Official Assignee to proceed against the sons' shares in the family property; but so long as the shares were not sold, the sons would exercise such rights as they might possess by virtue of being the owners of their shares in the property. As already stated, their Lordships considered the provisions of the Presidency Act. In this case we have to consider the provisions of Section 28 of the Provincial Insolvency Act (V of 1920). Section 28, Clause (2), reads as follows:

On the making of an order of adjudication the whole of the property of the insolvent shall vest in the Court or in a receiver.

5. The question is whether the expression 'property of the insolvent' means the property which the insolvent, as the father of his sons, was entitled to call his own and sell it under certain circumstances or that share which goes to the father in the event of a partition between himself and the sons. On the authority so long prevailing in this Court, we take it that the former meaning is the proper meaning of the word 'property' as used there. I find nothing in the Privy Council case which shows that this interpretation would be wrong.

6. Much has been said as to the inconvenience that would arise from the course that has so long been adopted in this Court; but it is not necessary to discuss that question.

7. I am of opinion that the petition of the appellant was rightly dismissed, and 1 would dismiss the appeal with costs.

Sulaiman, J.

8. I concur. There can be no doubt that the trend of the authorities so far has been to allow the receiver in insolvency to dispose of the joint family property in lieu of the debts of the father where the latter has been declared insolvent. I may refer only to the recent case of Bhagwan Das v. O.M. Chiene AIR 1922 All 79. It will, therefore, be difficult to depart from this view or to reconsider the point, unless these rulings have been overruled either expressly or by implication. The learned advocate for the appellant relies upon the recent pronouncement of their Lordships of the Privy Council in Sat Narain' v. Behari Lal . The only point before their Lordships was whether the effect of the insolvency of the father was to divest the sons of all their interests in the joint property so as to deprive them of their right of pre-emption as co-sharers. Their Lordships clearly held that the effect of the insolvency of the father was not at once to vest the entire property in the Official Receiver. There are, no doubt, some observations on pp. 95 and 96 suggesting that, although the words 'disposing power' in Section 2 may be wide enough to cover a Hindu father's power to sell the joint property and apply the proceeds to the payment of his debts, yet the definition of 'property' seemed to suggest that what was contemplated was an absolute and unconditional power of disposal.

9. There is a further point pressed before us that, when their Lordships guarded themselves from saying that the property did not become available for payment of the father's just debts, they referred to Section 52 of the Presidency Towns Insolvency Act, corresponding to which there is no express provision in the Insolvency Act. Section 2(d) begins by saying that 'Property includes....' It is obvious that it does not contain an exhaustive definition of the term 'property.' In the Full Bench decision of the Madras High Court in Official Assignee v. Ram Chandra Ayyar AIR 1923 Mad 55 the learned Judges based their decision on the combined effect of Sections 7, 30 and 52 of the Presidency Towns Insolvency Act.

10. The interests of a father in the entire joint family property extend over the whole property, and it seems difficult to hold that he has no interest in the entire property because if a partition were to take place the interests of his sons would be cut out and set apart. As, in my opinion, the case decided by their Lordships does not overrule the previous rulings of this Court and other High Courts, I find it impossible to take a different view.

11. The appeal is dismissed with costs.


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