Skip to content


Chhote Lal Vs. Kedar Nath and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad
Decided On
Judge
Reported inAIR1924All703; (1924)ILR46All565; 84Ind.Cas.289
AppellantChhote Lal
RespondentKedar Nath and ors.
Cases ReferredKristocomul Mitter v. Suresh Chunder Deb
Excerpt:
.....7 - insolvent--disposal of after-acquired property by insolvent--bona fide transactions with insolvent. - - 2,300 to baijnath, the transferee, the decree was taken as fully satisfied. 2. we may point out here that the learned judge of the lower appellate court has made a mistake in saying that the application was made on the 21st of february, 1922. that was the date on which the official assignee in calcutta signed the application which was actually filed on the 3rd of march, 1922. the application of the official assignee was dismissed on the 4th of march, 1922, by the learned subordinate judge on the ground that the decree had been satisfied and there could be no substitution of names. chhote lal came in and pleaded that he had satisfied the decree and it could not be executed..........under the insolvent debtors act, on the 4th of september, 1906. on the 11th of january, 1910, kedar nath obtained an order for personal discharge, but he continued to be an adjudicated insolvent so far as the property was concerned. in 1921 kedar nath sued one chhote lal for recovery of a certain sum of money on the ground that it was due to him for certain services rendered to chhote lal. he obtained a decree on the 19th of january, 1922. on the 11th of february, 1922, kedar nath sold the-decree to baijnath. chhotfe lal filed an appeal against the decree and made an application to the court for the stay of execution pending the appeal on the ground, inter alia, that kedar nath was an undischarged insolvent. it appears, however, that the parties came to terms on the 22nd of.....
Judgment:

Mukerji and Daniels, JJ.

1. The facts of this case are briefly these. One Kedar Nath of Agra was adjudicated insolvent in Calcutta under the Insolvent Debtors Act, on the 4th of September, 1906. On the 11th of January, 1910, Kedar Nath obtained an order for personal discharge, but he continued to be an adjudicated insolvent so far as the property was concerned. In 1921 Kedar Nath sued one Chhote Lal for recovery of a certain sum of money on the ground that it was due to him for certain services rendered to Chhote Lal. He obtained a decree on the 19th of January, 1922. On the 11th of February, 1922, Kedar Nath sold the-decree to Baijnath. Chhotfe Lal filed an appeal against the decree and made an application to the court for the stay of execution pending the appeal on the ground, inter alia, that Kedar Nath was an undischarged insolvent. It appears, however, that the parties came to terms on the 22nd of February, 1922. A compromise was filed in the execution department by which, on payment of a sum of Rs. 2,300 to Baijnath, the transferee, the decree was taken as fully satisfied. The appeal was also dismissed on an application by the appellant, Chhote Lal. The official assignee then, for the first time, intervened on the 3rd of March, 1922. On that date he made an application to the learned Subordinate Judge of Agra asking that his name might be substituted in place of Kedar Nath and that he might be permitted to execute the decree.

2. We may point out here that the learned Judge of the lower appellate court has made a mistake in saying that the application was made on the 21st of February, 1922. That was the date on which the official assignee in Calcutta signed the application which was actually filed on the 3rd of March, 1922. The application of the official assignee was dismissed on the 4th of March, 1922, by the learned Subordinate Judge on the ground that the decree had been satisfied and there could be no substitution of names. On the 24th of March, 1922, the official assignee made an independent application for execution of the decree which had been obtained by Kedar Nath. Chhote Lal came in and pleaded that he had satisfied the decree and it could not be executed against him. He led evidence before the court of the first instance to prove the factum of payment. The learned Subordinate Judge came to the conclusion that there was a payment, but that payment could not exonerate Chhote Lal. On appeal, the District Judge came to the same conclusion and dismissed the appeal of Chhote LaL.

3. In this Court it has been contended on behalf of Chhote Lal that having regard to the law as has been interpreted by various rulings of court, he was not to be called upon to make a; second payment.

4. On behalf of the respondent it was urged that there was really no finding on the part of the first court to the effect that there was a bond fide payment and that no such finding was confirmed by the learned District Judge. We have, however, heard a portion of the evidence and notice that the official assignee led no evidence to contradict that evidence which had been adduced on the part of Chhote Lal. We must, therefore, hold and do hold that Chhote Lal did as a matter of fact make a payment of Rs. 2,300 and that payment was a bond fide one to satisfy the decree passed against him.

5. Now the question is whether the fact that Chhote Lal was aware that Kedar Nath was an undischarged insolvent precluded him from making a valid payment of the decree. We have been referred to Sections 7, 26 and 27 of the Insolvent Debtors Act and to the following cases, namely, Cohen v. Mitchell (1890) L.R. 25 Q.B.D. 262, Laduram Nathmull v. Nandalal Karuri (1920) I.L.R. 47 Calc. 556, Kristocomul Mitter v. Suresh Ghunder Deb (1882) I.L.R. 8 Calc. 556, Sriramulu Naidu v. Andalammal (1906) I.L.R. 30 Mad. 145 and Alimahmad Abdul Hussein v. Vadilal Devchand (1919) I.L.R. 43 Bom. 890. It appears to us, as a result of these authorities, that, in spite of the fact that by order passed under Section 7 of the Insolvent Debtors Act, the future property of Kedar Nath was to vest in the official assignee, Kedar Nath was left free to dispose of any property that he might acquire after being declared an insolvent and that all persons dealing with him bond fide and for a consideration were to be discharged from making a further payment to the official assignee, provided the transactions took place before the official assignee intervened and claimed the property on behalf of the insolvent's estate.

6. The leading case on the point is that of Cohen v. Mitchell (1890) L.R. Q.B.D. 262. That case was quoted in Alimahmad Abdul Hussein v. Vadilal Devchand (1919) I.L.R. 43 Bom. 890, and Shah, J., on page 903, says:

In India long before the decision in Cohen v. Mitchell, it was held JI Kristocomul Mitter v. Suresh Chunder Deb (1882) I.L.R. 8 Calc. 556, that so long as the official assignee had not interfered, an insolvent who had not obtained his final discharge had power with respect to after-acquired property to buy and sell and give discharge, and do all other acts which he could have done before his insolvency.

7. He has shown at page 905 of the report that this law applied to both movable and immovable property. We are dealing with movable property, namely a decree.

9. The authorities, therefore, establish the proposition for which the appellant contends. Indeed, Mr. Ashthana, the learned Counsel on the other side, agrees that the point cannot be controverted. We accordingly allow the appeal with costs, and set aside the decrees of the courts below, and dismiss the application for execution made by the official assignee. The appellant will get his costs in the courts below as well.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //