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Kashi Nath and anr. Vs. Kanhaiya Lal Sharma - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Judge
Reported inAIR1915All305; (1915)ILR37All452; 29Ind.Cas.990
AppellantKashi Nath and anr.
RespondentKanhaiya Lal Sharma
Excerpt:
act no. iii of 1901 (provincial insolvency act), section 34 - decree for sale of certain property was obtained by one of the creditors--prior to sale judgement-debtor was adjudged insolvent--position of other creditors. - - it seems to us quite clear that section 34 of the provincial insolvency act was intended to put creditors of an insolvent who have not actually attached the property before the date of the order of adjudication in at least as good a position as creditors of the insolvent who, but for his insolvency, would have been entitled to claim a retable distribution of the assets received on an execution sale......of the general body of creditors. under section 64 of the code of civil procedure neither the private alienations made by keshab deo nor the execution sale of the property could affect the right of the appellants to bring the property to sale in execution of their decree. the appellant's case is that the property has under the private alienations and the execution sale ceased to be the property of keshab deo, and that all that the appellants have is the special right conferred upon them by section 64 of the code of civil procedure to execute their decree against the property, notwithstanding the private alienations and the execution sale. they contend that the property is no longer the property of keshab deo, and therefore section 34 of the provincial insolvency act does not apply.....
Judgment:

Chamier and Piggott, JJ.

1. This is an appeal against an order of the Second Additional Judge of Aligarh, passed under the Provincial Insolvency Act. In June, 1909, the appellants filed a suit against Keshab Deo and others and they caused certain immoveable property of Keshab Deo to be attached under Order 38 of the Code of Civil Procedure before judgement. The appellants obtained a decree in that suit on June 12th, 1913. In the meantime Keshab Deo had transferred portions of the property by four sale-deeds, dated November 15th and 16th, and December 6th and 9th, 1909, and part of the property which had been attached had been sold in 1909 in execution of a decree passed by the Bombay High Court. Keshab Deo had, in 1911 been declared insolvent and the respondent, Pandit Kanhaiya Lal Sharma, had been appointed receiver of his property. The receiver has claimed the property in question as property which is available for the creditors of the insolvent, and the learned Judge has decided that it is property available for the creditors, and has directed the Subordinate Judge who placed the property under attachment to release it from the attachment and make it over to the receiver. It appears that execution of the decree obtained by the appellants was taken out by them in 1914, the property was proclaimed for sale and the sale was to have taken place on January 22nd last. It was at this point that the receiver claimed the property on behalf of the general body of creditors. Under Section 64 of the Code of Civil Procedure neither the private alienations made by Keshab Deo nor the execution sale of the property could affect the right of the appellants to bring the property to sale in execution of their decree. The appellant's case is that the property has under the private alienations and the execution sale ceased to be the property of Keshab Deo, and that all that the appellants have is the special right conferred upon them by Section 64 of the Code of Civil Procedure to execute their decree against the property, notwithstanding the private alienations and the execution sale. They contend that the property is no longer the property of Keshab Deo, and therefore Section 34 of the Provincial Insolvency Act does not apply so as to entitle the receiver to claim it. It may be that the private alienations and also the execution sale of the property are void as against the receiver, and if so, there can of course, be no doubt that the property is the property of Keshab Deo and Section 34 must be held to be applicable. Assuming, however, that the private alienations and the execution sale are not voidable or void as against the receiver, we think that the property must still be regarded as the property of the debtor, Keshab Deo. The decree-holders are entitled to bring the property to sale as the property of Keshab Deo because the private alienations and execution sale are void as against them. Section 34 of the Provincial Insolvency Act provides that where execution of a decree is issued against the property of a debtor, no person shall be entitled to the benefit of the execution against the receiver except in respect of assets realized in the course of execution by sale or otherwise before the date of the order of adjudication. The sale has not yet taken place, but execution of the appellant's decree has issued against the property. In our opinion the property must still be regarded as the property of the debtor, and it is as property of the debtor that it is liable to answer the decree held by the appellants. It seems to us quite clear that Section 34 of the Provincial Insolvency Act was intended to put creditors of an insolvent who have not actually attached the property before the date of the order of adjudication in at least as good a position as creditors of the insolvent who, but for his insolvency, would have been entitled to claim a retable distribution of the assets received on an execution sale. In our opinion the learned Judge was right in holding that the property was available for the general body of creditors. But we express no opinion as to the rights of the alliances or of the purchasers at the execution sale as they are not before us. The appeal is dismissed with costs.


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