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Lala Shikri Prasad Vs. Hafiz Aziz Ali and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1922All196; 63Ind.Cas.601
AppellantLala Shikri Prasad
RespondentHafiz Aziz Ali and ors.
Excerpt:
.....(iv of 1882), section 53--fraudulent transfer by insolvent before insolvency--inquiry--procedure--decision--appeal. - - the act of the receiver was an act attaching some very valuable property which the receiver in a very clear closely reasoned, was strong report has come to the conclusion had been sold by the insolvent soma three years before the insolvency merely with intent to defraud and delay his creditors, or, as the receiver says, to hood wink his creditors and save the property, the district judge has held rightly that it does not some within any of the express provisions of the insolvensly law and he has gone onto hold erroneously that a transaction cannot be attacked under the provisions of the transfer of properly act or under the general provisions of the law in the..........we remit the case to the district judge to hear and decide the application as though it were a question of title involving matters of law and fact under section 4 of the new act which was not in force when he adjudicated. he must allow the respective parties to adduce any material evidence they may be advised.2. mr. m.l. agarwala on behalf of the respondent has very forcibly urged upon us the contention that we ought to dismiss this appeal on the ground that no appeal lay. probably no appeal did lie under the old act under which this proceeding was commenced and decided. at any rate, no appeal lay without the permission of the court and no permission has been given. the new act of 1920 became law on the 25th february 1920. this decision was passed on the 5th may 1920. the appellant.....
Judgment:

1. This order cannot stand. The learned Judge has totally misconceived the position. The original application wag by the insolvent complaining, under the old Act which is now repealed against an Act of the Receiver. The act of the Receiver was an Act attaching some Very valuable property which the Receiver in a very clear closely reasoned, was strong report has come to the conclusion had been sold by the insolvent soma three years before the insolvency merely with intent to defraud and delay his creditors, or, as the Receiver says, to hood wink his creditors and save the property, The District Judge has held rightly that it does not some within any of the express provisions of the Insolvensly law and he has gone onto hold erroneously that a transaction cannot be attacked under the provisions of the Transfer of Properly Act or under the general provisions of the law in the Insolvency Court. Here he is wrong. The Insolvency Court has to administer the law under its own procedure and to decide questions arising in insolvency which are covered by special provisions of the Insolvency Act, where, for example, a trustee is given a higher title than the original debtor. But the Insolvency Court also has to apply, and to decide, all questions of general law including such questions as are raised by Section 51 of the Transfer of Property Act. That is one reason why the administration of insolvency is so onerous and imposes a very heavy burden on the District Courts If the Receiver is right in fact, clearly this transaction was void tinder Section 53 of the Transfer of Property Act, at d the property attached by the Receiver ought to be distributed as part of the estate among the creditors But the Receiver is not a judicial officer, and it is not sufficient for the Judge merely to refuse to disagree with him. We are of opinion in this case that, owing to his having considered the question of law to be a final bar, he has not applied his mind at all to the question of fact. Hs has only said that the Receiver's reasoning is sound enough. There ought to be a full inquiry between the Receiver and the creditor on one hand, and the debtor and his family on the other as to the bona fides of this transaction. Whether you call it summary or not, it ought to follow the ordinary course of a suit. In the main, the provisions of the Civil Procedure Code are applicable to such inquiry, and there ought to be sworn testimony and the game care used with regard to documents, and the admission or rejection of documentary evidence, as in a suit We remit the case to the District Judge to hear and decide the application as though it Were a question of title involving matters of law and fact under Section 4 of the new Act which was not in force when he adjudicated. He must allow the respective parties to adduce any material evidence they may be advised.

2. Mr. M.L. Agarwala on behalf of the respondent has very forcibly urged upon us the contention that we ought to dismiss this appeal on the ground that no appeal lay. Probably no appeal did lie under the old Act under which this proceeding was commenced and decided. At any rate, no appeal lay without the permission of the Court and no permission has been given. The new Act of 1920 became law on the 25th February 1920. This decision was passed on the 5th May 1920. The appellant had to consider at the date when the decision was passed what his right of appeal was, if any. The old Act of 1907 had been repealed and the only Act in faros was the Act of 1920, Section 75, Sub-section (2) of the Act of 1920 gives a right of appeal to any creditor against a decision of the District Court of the nature specified in Schedule I of that Act. Amongst the decisions specified in Schedule I of that Act is the decision under Section 4 of a question of title, We are clearly of opinion that the decision which is appealed against was a decision on a question of title within the meaning of Section 4, although Section 4 did not exist when the case cross, and being such a decision it was one against which the creditor had a right of appeal by the only Act in force at the time when the appeal was tiled. We, therefore, remit the case as above mentioned, and on the whole justice will be done by allowing costs to abide the result.


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