Skip to content


ibrahim Chittubhai Vs. A.G. Pancholi - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 371 of 1962
Judge
Reported inAIR1968Guj272; (1968)9GLR447
ActsRegistration Act, 1908 - Sections 47; Provincial Insolvency Act, 1920 - Sections 28, 37 and 55
Appellantibrahim Chittubhai
RespondentA.G. Pancholi
Advocates: C.K. Patel, Adv.
Cases ReferredOn Maung v. Maung Shwe Hpaung
Excerpt:
.....shall continue to vest in the official receiver. it was frankly conceded on behalf of the original opponent that if he could not bring his case within the language of section 55, the transfer would be void, but, contended his counsel, the requirements of section 55 were satisfied in his case and he was in a position to establish that the transfer was protected under that section. this view is clearly supported by the decision of the privy council in kalyanasundaram v. i am, therefore, of the view that in the present case the transfer of the said immovable property in favour of the original opponent took place on the date on which the instrument of transfer was executed in favour by bai mumtaz kunvarba and since that was prior to the date of the order of adjudication, the..........baroda, during the pendency of the petition bai mumtaz kunvarba executed in favour of the original opponent on 9th april 1956 an instrument of transfer of certain immovable property belonging to her by virtue of a gift deed executed in her favour of usmanmiya mahamadmiya on 23rd february 1955. before the instrument of transfer could be registered, an order was made on the petition on 30th june 1956 adjudicating usmanmiya mahamadmiya and bai mumtaz kunvarba as insolvent and the properties of the two insolvents as at the date of the presentation of the petition vested in the official receiver. the instrument of transfer was thereafter registered on 18th july 1956. it appears that the two insolvents namely usmanmuya mahamadmiya and bai mumtaz kunvarba failed to make an application.....
Judgment:
ORDER

(1) This revision Application raises an interesting question of law relating to the interpretation of section 28 of Provincial Insolvency Act and section 47 of the Registration Act. The question is as to what is the effect of an order of adjudication on a transfer of immovable property in respect of which the instrument of transfer is executed between the date of the presentation of the petition and the date of order of adjudication but the registration has taken place subsequent to the date of the order of adjudication. The facts giving rise to the question are very few and may be briefly stated as follows. On 17th February, 1956, a creditor named Gulamhusain Farukbhai presented a petition for adjudicating Usmanmiya Mahamadmiya and his wife Bai Mumtaz Kunvarba as insolvent tin the Court of the Civil Judge, Senior Division, Baroda, During the pendency of the petition Bai Mumtaz Kunvarba executed in favour of the original opponent on 9th April 1956 an instrument of transfer of certain immovable property belonging to her by virtue of a gift deed executed in her favour of Usmanmiya Mahamadmiya on 23rd February 1955. Before the instrument of transfer could be registered, an order was made on the petition on 30th June 1956 adjudicating Usmanmiya Mahamadmiya and Bai Mumtaz Kunvarba as insolvent and the properties of the two insolvents as at the date of the presentation of the petition vested in the Official Receiver. The instrument of transfer was thereafter registered on 18th July 1956. It appears that the two insolvents namely Usmanmuya Mahamadmiya and Bai Mumtaz Kunvarba failed to make an application to the Court for an order of discharge within the period granted by the Insolvency Court and the Insolvency Court, therefore, by an order dated 31st August 1959 annulled the order of adjudication and directed that the property of the insolvents shall continue to vest in the Official Receiver. This order was obviously made the Insolvency Court under section 37 of Provincial Insolvency Act. The Official Receiver thereafter made an application to the Insolvency Court on 18th February 1960 for a declaration that the transfer of the said immovable property effected by Bai Mumtaz Kunvarba in favour of the original opponent was void since it was effected after the presentation of the petition for adjudication and for recovery of possession of the said immovable property from the original opponent. The original opponent resisted the application inter alia on the ground that the transfer of the said immovable property was for valuable consideration and since the transfer had taken place before the date of the order of adjudication and the original opponent had at the time no notice of the presentation of the petition for adjudication against Bai Mumtaz Kunvarba, the original opponent was protected under section 55 of the Provincial Insolvency Act and the transfer was not invalidated by the making of the order of adjudication. The trial Court took the view that at the date of the order of adjudication, the transfer of the said immovable property in favour of the original opponent was not complete since the instrument of transfer was to registered and the said immovable property, therefore, continued to belong to Bai Mumtaz Kunvarba and, therefore, on the making of the order of adjudication, the said immovable property vested in the Official Receiver as property of Bai Mumtaz Kunvarba and there was accordingly no question of the applicability of section 55 which could be invoked only if the transfer had taken place prior to the date of the order of adjudication. The trial Court accordingly did not permit the original opponent to lead evidence for the purpose of showing that the transfer was for valuable consideration and that the original opponent had at the date of the transfer no notice of the presentation of the petition for adjudication. The trial Court also rejected another contention raised by the original opponent, namely, that the present application was not maintainable since it was preferred by the Official Receiver after the annulment of the order of adjudication. The argument was that once the order of adjudication was annulled, the insolvency proceedings came to an end and thereafter no application could be made by the Official Receiver for declaring a transfer of immovable property made by insolvent void but this argument was negatived by the trial Court. The trial Court in this view of the matter declared that the transfer of the said immovable property made by Bai Mumtaz Kunvarba in favour of the original opponent was void and directed the Official Receiver to take possession of the said immovable property from the original opponent thereupon preferred an appeal to the District Court, Baroda. The learned District Judge who heard the appeal also took the same view as the trial Court and held that the transfer of the said immovable property could not be complete without the registration of the instrument of transfer and since the instrument of transfer was not registered until after the making of the order of adjudication there was no valid and complete transfer at the date of the order of adjudication and the said immovable property continued to be the property of Bai Mumtaz Kunvarba and accordingly vested in the Official Receiver as property of Bai Mumtaz Kunvarba. The learned District Judge observed that since there was no valid and effective transfer of the said immovable property prior to the date of order of adjudication, the benefit of the protection conferred under Section 55 was not available to the original opponent and the original opponent could not claim to validate the transfer under that section. The learned District Judge also held that inasmuch as there was no transfer of the said immovable property prior to the date of the order of the adjudication and the said immovable property, therefore, vested in the Official Receiver as the property of Bai Mumtaz Kunvarba, the Official Receiver in whom all the property of the insolvents was vested by an express order of the Insolvency Court on the annulment of the order of adjudication was entitled to make an application to the Insolvency Court for a declaration that the transfer was void and for possession of the said immovable property from the original opponent. The learned District Judge accordingly confirmed that order passed by the trial Court and dismissed the appeal with costs. The original opponent thereupon preferred the present Revision Application in this Court.

(2) The main grievance of the original opponent in this Revision Application was that the learned District Judge had fallen into an error in holding that no transfer of the said immovable property had taken place prior to the date of the order of adjudication and that there was accordingly no question of considering whether the protection of Section 55 was available to the original opponent. It was contended on behalf of the original opponent that the instrument of transfer was executed by Bai Mumtaz Kunvarba in favour of the original opponent prior to the date of the order of adjudication and though it was undoubtedly registered after the making of the order of adjudication, the registration related back to the date of execution and once the instrument of transfer was registered, the instrument of transfer took effect from the date on which it was executed and the transfer, therefore, took place on the date of execution of the instrument of transfer and not fro the date of registration. The argument was that since the instrument of transfer was executed prior to the date of the order of adjudication, the transfer took place prior to the making of the order of adjudication and, therefore, it was necessary for the learned District Judge to consider whether the case of the original opponent fell within the protection conferred under section 55 of the Insolvency Act. If the case came within the four corners of section 55, the transfer, though made subsequent to the date of the presentation of the petition for adjudication, would be protected and the Official Receiver would not be entitled to have it declared null and void. It was frankly conceded on behalf of the original opponent that if he could not bring his case within the language of Section 55, the transfer would be void, but, contended his counsel, the requirements of section 55 were satisfied in his case and he was in a position to establish that the transfer was protected under that Section. This contention raises a question as to when the transfer could be said to have taken place, whether on the date of the execution of the instrument of transfer or on the date of registration and what is the effect of registration effected subsequent to the date of the making of the order of adjudication. The answer to this question depends on the true interpretation of Section 28 of the Provincial Insolvency Act and Section 47 of the Registration Act.

(3) Now it is an elementary proposition of law that where immovable property is of the value of over S. 100/- the transfer of such immovable property by way of sale can be effected only b a registered instrument executed by the transferor. The transfer would not be effective so as to pass titled in the immovable property tot he transferee unless the instrument of transfer is registered. But, says Section 47 of the Registration Act:

'A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration.'

Though the transfer cannot be effected except by a registered instrument, as soon as the instrument of transfer is registered, it operates from the time from which it would have commenced to operate if no registration was necessary and the transfer takes effect not from the date of registration of the instrument of transfer but from the date on which the instrument was executed. So far as the transferor is concerned, all that he is required to do for the purpose of effecting the transfer is to execute the instrument of transfer conveying the immovable property to the transferee. Once the instrument of transfer is executed by the transferor he has done everything in his power to convey the immovable property to the transferee. Then comes the next step of registration. Registration does not depend upon the consent of the transferor but is the Act of an officer appointed by law for the purpose, who, if the instrument of transfer is executed by or on behalf of the transferor, must register it if it is presented by a person having the necessary interest within the prescribed period. Neither death nor express revocation by the transferor is a ground for refusing registration if the other conditions are complied with. Registration is, therefore, necessary solemnity in order to make the transfer by way of sale enforceable but as soon as that necessary solemnity is carried out and the instrument of transfer is registered, the transfer becomes effective not from the date of registration but from the date of execution of the instrument of transfer. This view is clearly supported by the decision of the Privy Council in Kalyanasundaram v. Karuppa .

(4) The instrument of transfer in the present case was executed by Bai Mumtaz Kunvarba after the filing of the petition for adjudication but prior to the date of the order of adjudication though it was registered subsequent to the making of he order of adjudication. When Bai Mumtaz Kunvarba executed the instrument of transfer in favour of the original opponent, she did all that was in her power to complete the transfer of the said immovable property in favour of the original opponent and thereafter it was immaterial as to when the necessary solemnity of registration was carried out and the instrument of transfer was registered. Of course, unless the instrument of transfer was registered, the title in the said immovable property could not pass to the original opponent but as soon as that necessary solemnity was carried out and the instrument of transfer was registered, the transfer became effective from the date of the execution of the instrument of transfer. The transfer of the said immovable property, therefore, took place prior to the date of the order of adjudication and not subsequent to such date. Once the registration of the instrument of transfer was made, the Insolvency Court was bound to take into account the registration and it was not open to the Insolvency Court to say that there was no transfer of the said immovable property in favour of the original opponent at the date of the order of adjudication. The instrument of transfer was executed by Bai Mumtaz Kunvarba and all the remained to be done was registration of the instrument of transfer which was undoubtedly a necessary solemnity but which could be carried out within the prescribed period, the instrument of transfer began to speak from the date on which it was executed and the Insolvency Court could not say that it spoke only from the date of registration and not from the date of execution. To say that there was no valid transfer of the said immovable property on the date on which the instrument of transfer was executed would be to ignore the registration of the instrument though validly and lawfully made and to refuse to give effect to section 47 of the Registration Act. I am, therefore, of the view that in the present case the transfer of the said immovable property in favour of the original opponent took place on the date on which the instrument of transfer was executed in favour by Bai Mumtaz Kunvarba and since that was prior to the date of the order of adjudication, the original opponent was entitled to claim the protection of section 55 if he satisfied the other conditions set out in that section. This view appears to be fairly clear on principle but I may add that I find considerable support for this view in the Full Bench decision of he Rangoon High Court in U On Maung v. Maung Shwe Hpaung, AIR 1967 Rang 466 (FB), I must, therefore, reach the conclusion that the learned District Judge was in error in holding that there was not transfer of the said immovable property vested in the Official Receiver as property belonging to Bai Mumtaz Kunvarba at the date of the order of adjudication. The transfer of the said immovable property in my view took place on 9th April 1956 when the instrument of transfer was executed in favour of the original opponent and had Bai Mumtaz Kunvarba not been adjudicated insolvent, the original opponent would have been entitled to claim that he became the owner of the said immovable property from the said date on the execution of the instrument of transfer. But Bai Mumtaz Kunvarba was adjudicated insolvent by the order of adjudication dated 30th June 1956 and the transfer made subsequent to the filing of the petition for adjudication was therefore, null and void under section 28 of the Provincial Insolvency Act which declares that the order of adjudication shall relate back to and take effect from the date of presentation of the petition on which the order was made, so that the whole of the property of the debtor at the date of the presentation of the petition shall on the making of the order of adjudication, vest in the Receiver. The transfer could be held valid only if the original opponent could show that his case came within section 55 of the Insolvency Act. The original opponent wanted to lead evidence to show that the transfer fell within section 55 of the Insolvency Act but he was not given an opportunity to do so. It is, therefore, necessary that the matter should be remanded to the trial Court for the purpose of giving an opportunity to the original opponent to lead evidence for the purpose of showing that the transfer in his favour was protected under section 55 of the Insolvency Act.

(5) I must also mention one other contention raised on behalf of the original opponent and that was that the present application made by the Official Receiver was not maintainable since it was preferred after the annulment of the order of adjudication. This contention is without substance for it is clear that by this application the Official Receiver does not seek to set aside any transaction effected by the insolvent but merely seeks a declaration of the trial Court with a view to giving effect to the order passed by the Insolvency Act at the time of annulment of the order of adjudication that all the property of the debtor shall continue to vest in the Official Receiver. If the case does not come within the protection of section 55 of the Insolvency Act, the said immovable property would, on the making of the order of adjudication vest in the Official Receiver as the property of Bai Mumtaz Kunvarba, the insolvent, at the date of the presentation of the petition for adjudication and it would continue to vest in the Official Receiver even after the annulment of the order of adjudication by virtue of order made by the Insolvency Court while annulling the adjudication. The Official Receiver would, therefore, be entitled to maintain the present application for the purpose of establishing his right to the said immovable property under the order made by the Insolvency Court at the time of annulling the adjudication. The contention regarding the maintainability of the application by the Official Receiver must consequently be rejected.

(6) I , therefore, allow the Revision Application, set aside the orders passed by the trial Court and the learned District Judge and remand the application to the trial Court with a direction to dispose it of in accordance with law in the light of the observations contained in this judgment. The original applicant will pay the costs of this Revision Application to the original opponent.

(7) Petition allowed.


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