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Allahabad Bank Vs. Bhagwan Das Johari and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1926All262
AppellantAllahabad Bank
RespondentBhagwan Das Johari and ors.
Cases ReferredSat Narain v. Behari Lal
Excerpt:
- .....may be sent to the receiver in insolvency to take steps accordingly and to act as if the entire family property were the assets of the insolvent. this order was not justified because on an adjudication of a hindu father as an insolvent under the insolvency act, the joint property of the family does not at once vast in the assignee. their lordships enunciated this proposition of law in the case of sat narain v. behari lal air 1923 pc 18, where the terms construed were those of the presidency towns insolvency act (3 of 1909). the term 'property' is defined in the provincial insolvency act in the same words: (section 2(d) of act v of 1920.) that pronouncement of their lordships will therefore cover the present case also.2. on the 6th of february 1925, the receiver of the insolvency.....
Judgment:

1. This is an appeal by a decree-holder, the Allahabad Bank, Ltd., Bareilly, an order of the Subordinate Judge of Bareilly, dated 24th February 1925. The order does not contain the facts of the case which must therefore be narrated here. The decree-holder had obtained a decree against one Banke Lal and his four sons on 31st January 1924. An application for execution was presented on 8th May 1924 and the property of the whole family was attached and proceedings were being taken for sale of the property. Before a sale took place, Banke Lal alone was adjudged an insolvent by the Insolvency Court which appointed a Receiver for his property. His property thereupon vested in the Receiver. On 7th December 1924, subsequent to the insolvency proceedings, the pleader for the Bank requested the lower Court that the father's one-fifth share may be released and only four-fifths of the attached property may be sold. The Court passed an order accordingly. On 26th January 1925 two sons of the Banke Lal applied that the entire property of the family may be sold by the Receiver appointed by the Insolvency Court. There was no suggestion that the entire property had vested in the Receiver upon an adjudication in favour of the father. On this application the lower Court passed an order wish the terms of which we do not agree. The learned Subordinate Judge directed that copies of the application and of the order of the Court may be sent to the Receiver in insolvency to take steps accordingly and to act as if the entire family property were the assets of the insolvent. This order was not justified because on an adjudication of a Hindu father as an insolvent under the Insolvency Act, the joint property of the family does not at once vast in the assignee. Their Lordships enunciated this proposition of law in the case of Sat Narain v. Behari Lal AIR 1923 PC 18, where the terms construed were those of the Presidency Towns Insolvency Act (3 of 1909). The term 'property' is defined in the Provincial Insolvency Act in the same words: (Section 2(d) of Act V of 1920.) That pronouncement of their Lordships will therefore cover the present case also.

2. On the 6th of February 1925, the Receiver of the Insolvency Court, Babu Johri, applied that he may be permitted to carry out the sale of the entire family property, and on this application the lower Court ordered that sale proceedings through the Amin and the Collector shall be stopped and that the whole property shall be sold by the Receiver in whom, according to the Court, the entire property had vested. The decree-holder was informed of this order. Eighteen days later, on the 24th February, the learned Judge ordered the execution case to be struck off. This is the order under appeal. It is in the following terms: Banke Lal, judgment-debtor, has been declared an insolvent. His property together with the whole of the family property, will be sold through the Receiver.'

3. The mere words of this order as quoted above are not objectionable as the lower Court would be wall advised to have the sale of the sons' interest and of the father's interest in the joint family property carried out by the same agency. The previous orders of the lower Court however indicate that according to its opinion all the assets have vested in the Receiver. Such a finding will obviously he prejudicial to the decree-holder because, if the assets are all vested in the Receiver, the other creditors will claim rateable shares in the shares of the sons in the joint family property and so far that portion of the property of the sons will not be available to the decree-holder-appellant.

4. We set aside the order of 24th February 1925, and direct the lower Court to proceed according to law. We have already indicated that the insolvency of the father does not vest the interest of the sons in the joint family property in the Receiver. Whatever interest the sons may have in the property will be available to the decree-holder appellant to satisfy his decree of the 31st January 1924 which was specifically passed against the sons as wall as against the father. We think that the proper procedure in the case would be to carry out execution proceedings in combination with the Receiver in insolvency and arrange so that the entire property both of the father and of the sons, may be sold at the same time. It appears that part of the immovable property is house property which could be sold by the lower Court directly and part is revenue paying property which will have to be sold through the Collector of the district. There ought to be no difficulty about the sale of the shares of the sons in the house property being carried out at the same time that the share of the father is sold. The lower Court may appoint she Receiver in insolvency, sale officer for the house property and when the property is sold the Receiver, under the direction of the lower Court and independently of the Insolvency Court, will deposit four-fifths of the sale amount in the lower Court for the benefit of the decree-holder appellant. There will be some difficulty in selling the share of the sons in the revenue paying property along with the share of the father. It may be found possible by the Court to advise the Collector at the time of the sale that the sale by him may take place at the same time that the father's share is sold. If any other arrangement of joint sale suggests itself to the lower Court and is acceptable to the parties, it may adoptee.

5. The respondents were not represented to-day and the appeal was heard ex parte. The appellant shall receive his costs here including fees on the higher scale.


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