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Kolandayammal Vs. Sinnavelappa Goundan and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberAppeal No. 473 of 1946
Judge
Reported inAIR1952Mad27; (1951)2MLJ438
ActsCode of Civil Procedure (CPC) , 1908; Provincial Insolvency (Amendment) Act, 1948; Government of India Act, 1935; Provincial Insolvency Act, 1920 - Sections 28A
AppellantKolandayammal
RespondentSinnavelappa Goundan and ors.
Appellant AdvocateN. Sivaramakrishna Aiyar, Adv.
Respondent AdvocateN.R. Raghavachari and ;H. Rama Rao, Advs.
DispositionAppeal allowed
Cases ReferredSat Narain v. Kishen Das
Excerpt:
civil - question of law - code of civil procedure, 1908, provincial insolvency (amendment) act, 1948 and government of india act, 1935 - constitutional validity of act of 1948 challenged in so far as it affected agricultural land - non-exclusion of agricultural land indicated that legislature used words 'bankruptcy and insolvency' in comprehensive sense so as to empower it to enact laws in regard to bankruptcy and insolvency in respect of agricultural lands also - act of 1948 'intra vires' of dominion legislature. - - in performing this difficult duty it willbe a wise course for those on whom it is thrownto decide each case which arises as best they can,without entering more largely upon an interpretation of the statute than is necessary for a decision of the particular question in.....subba rao, j. 1. the plaintiff-respondent in this case challenges the constitutional validity of the provincial insolvency amendment act, 1948, in so far as it affected the agricultural land. the facts are in a small compass and may briefly be stated. 2. the plaintiff and defendants 2 and 3 are the sons of the first defendant. the 14th defendant is the wife of the first defendant. they constituted members of a joint hindu family of which the first defendant was the manager. he became heavily involved and was adjudged an insolvent in i.p. no. 63 of 1931 on the file of the court of the subordinate judge, coimbatore. the plaint schedule properties were sold in his insolvency by the official receiver. some items were purchased by one srinivasa ayyar on 24th july 1933 under ex. p-2 and other.....
Judgment:

Subba Rao, J.

1. The plaintiff-respondent in this case challenges the constitutional validity of the Provincial Insolvency Amendment Act, 1948, in so far as it affected the agricultural land. The facts are in a small compass and may briefly be stated.

2. The plaintiff and defendants 2 and 3 are the sons of the first defendant. The 14th defendant is the wife of the first defendant. They constituted members of a joint Hindu family of which the first defendant was the manager. He became heavily involved and was adjudged an insolvent in I.P. No. 63 of 1931 on the file of the Court of the Subordinate Judge, Coimbatore. The plaint schedule properties were sold in his insolvency by the Official Receiver. Some items were purchased by one Srinivasa Ayyar on 24th July 1933 under Ex. p-2 and other properties by the fourth defendant under Ex. P-4, dated 12-12-1935. Defendants 4 to 13 are the alienees or their successors-in-interest. Usufructuary mortgage interest in the second item devolved on the 15th defendant and he is in possession of the same. The plaintiff filed O.S. No. 109 of 1944 on the file of the Court of the Subordinate Judge, Coimbatore for partition and possession of his one-fourth share in the plaint schedule properties mainly on the ground that the Official Receiver had no power to sell the shares of the members of the family other than the first defendant. Pending the suit defendants 2, 3, 4, 5, 7, 8,11, 12, and 10 have entered into a compromise with the plaintiff and a compromise decree was passed in respect of them. The learned Subordinate Judge relying upon the provisions of the Provincial Insolvency Act as it then stood, held that the Official Receiver had no power to sell the son's shares in the family properties. He gave a decree to the plaintiff for the recovery of one-fourth share of the properties in the possession of the 9th defendant and the 15th defendant The 15th defendant under the decree would be entitled to possession only after depositing a sum of Rs. 2,500 in Court. The 15th defendant has preferred the above appeal, and defendants 2 and 3 have preferred cross-objections in so far as the lower Court did not give them a decree for partition and possession of their share.

3. Pending the appeal the Provincial Insolvency Amendment Act 1948 was passed by the Dominion legislature, and, under the amending Act, the power of the father to sell his son's shares was declared to be property within the meaning of Section 28 of the Provincial Insolvency Act. If the Amending Act is valid, the decree of the lower Court would be wrong.

4. The learned counsel for the plaintiff-respondent contended that the Provincial Insolvency Amendment Act of 1948 is 'ultra vires' of the Dominion Legislature in so far as it encroached upon the forbidden field reserved for the Provincial Legislature under the Constitution Act. He further contended that the said Act should be confined in its operation to the subject-matter within the jurisdiction of the Dominion Legislature, i.e., the property excluding agricultural land which is entirely within the purview of the Provincial Legislature. To appreciate his arguments it will be convenient at this stage to notice the principles of construction laid down by decided cases. Lefroy's Treatise on Constitutional Law contains the following statement :

'It seems quite possible that a particular Act, regarded from one aspect, might be 'intra vires', of a Provincial Legislature, and yet, regarded from another aspect, might be also 'intra vires' of the Dominion Parliament. In other words, what is properly to be called the subject-matter of an Act may depend upon what is the true aspect of the Act.'

The learned author proceeds to say:

'The cases which illustrate this principle show, by 'aspect' here must be understood the aspect of point of view of the legislator in legislating, the object, purpose and scope of the legislation. The word is used subjectively of the Legislator rather than objectively of the matter legislated upon.'

In the matter of C.P. & Berar Sales of Motor Spirit & Lubricants Taxation Act 1938; 49 Mad LW 36 the question was whether the Central provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act of 1938 or any provisions thereof were 'ultra vires' the Legislature of the Central Provinces and Berar, The said Act enacted for the levy and collection from every retail dealer a tax on the retail sales of motor spirit and lubricants at a particular rate on the value of such sales. The Legislature invoked the aid of Item 48 of the Provincial Legislative list dealing with taxes on the sale of goods. It was contended that the subject-matter of the Legislation was covered by Item 45 of the Federal Legislative List dealing with 'Duties of excise on tobacco and other goods manufactured or produced in India' and therefore the Act was 'ultra vires' of the provincial legislature. Sir Maurice Gwyer, C.J., in holding that the said Act was not 'ultra vires' of the Provincial Legislature, quoted with approval the passage in 'Citizens Insurance Co. v. Parsons' (1882) 7 A.C. 96 :

'In these cases it Is the duty of the Courts however difficult it may be, to ascerain in what degree, and to what extent, authority to deal withmatters falling within these classes of subjectsexists in each Legislature, and to define in theparticular case, before them to limits of theirrespective powers. It could not have been theintention that a conflict should exist; and inorder to prevent such a result, the two sectionsmust be read together and the language of oneinterpreted, and where necessary, modified bythat of the other. In this way, it may, in mostcases, be found possible to arrive at a reasonableand practical construction of the language ofthe Sections, so as to reconcile the respectivepowers they contain, and to give effect to all ofthem. In performing this difficult duty it willbe a wise course for those on whom it is thrownto decide each case which arises as best they can,without entering more largely upon an interpretation of the statute than is necessary for a decision of the particular question in hand.

The learned Chief Justice also pointed out thatCourts are entitled to look at the real substance of the Act imposing the tax at what it does and notmerely what it says in order to ascertain the truenature of the tax. The case in 'In re HinduWomen's Rights to Property Act, 1937; 54 M.L.W.22 decides that the Hindu Women's Rights toProperty Act, 1937, and the Hindu Women's Rightsto Property (Amendment) Act, 1938, do not operateto regulate succession to agricultural land in theGovernor's Provinces, but they operate to regulatedevolution by survivorship of property other thanagricultural land. Entry No. 21 of List II of theConstitution Act provides for devolution of agricultural land. Wills, intestacy and succession saveas regards agricultural land appears as Entry No. 1of List III of the Concurrent List. By Act XVIIIof 1937 certain rights in property by survivorshipas well as by succession were conferred on a widowwhich she did not possess prior to the Act. Thelearned Judges held that the operation of the Actshould be confined only to property other' thanagricultural land. The two main contentions raisedin that case were (1) that the Act was in any view'ultra vires' the Indian Legislature, so far as itsoperation might affect agricultural land in theGovernors' Provinces, (2) that if the Act should beheld to be only in part 'ultra vires' it would not onthe authorities be permissible to sever the goodfrom the' bad, so as to allow it at any rate tooperate in respect of property other than agricultural land in the Governors' Provinces. In dealing.with the contentions the learned Chief Justice says(at page 27):

'No doubt if the Act does affect agricultural land in the Governors' Provinces, it was beyond the competence of the Legislature to enact it; and whether or not it does so must depend upon the meaning which is to be given to the word 'property' in the Act. If that word necessarily and inevitably comprises all forms of property, including agricultural land, then clearly the Act went beyond the powers of the Legislature; but when a Legislature with limited and restricted powers makes use of a word of such wide and general import, the presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.'

In the view they have taken of the validity of the Act, the learned Judges held that the question of severability did not arise for consideration. In 'Subrahmanyan Chettiar v. Muthuswami Goundan (1941) 1 M.L.J. Sup 1 the validity of the Madras Agriculturists' Relief Act (IV of 1938), in so far as it affected promissory notes came in question. Tht Act was challenged as invading theforbidden field of entry No. 28 of List II of the Constitution Act. The impugned legislation was supported with reference to item 27 of the Provincial List 'Moneylending and money-lenders.' At page 17 Sir Maurice Gwyer, C. J., says' :

'It must inevitably happen from time to time that legislation though purporting to deal with subject in one list, touches also on a subject in another list and the different provisions in the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the Impugned statute is examined to ascertain its 'pith and substance' or its 'true nature and character' for the purpose of determining whether it is legislation with respect to matters in this list or in that.'

They held that the pith and substance of the Madras Act, whatever it may be, cannot at any rate be said to be legislation with respect to negotiable instruments or promissory notes. In 'Megh Raj v. Allah Rakiah', 60 M. L.W. 416 : (1947) 2 M.L.J. 1 the question was whether the Punjab Restitution of Mortgaged Lands Act, IV of 1938, the main purpose of which was giving relief to mortgagors by enabling them to obtain restitution of the mortgaged lands on terms less onerous than the mortgage deed required, was 'intra vires', the Punjab Legislature. It was contended that the Legislation offended the existing law such as sections 37, 69 and 70 of the Indian Contract Act and section 4(1) and (2) and section 59 of the Code of Civil Procedure whereas the opposite party sought to support the validity of the legislation by relying upon item 21 of the Provincial List. The learned Judges gave a wide connotation to the word 'land' used in item 21 and held that the impugned legislation fell within Its scope. This decision was relied upon by the appellant's counsel to show that legislation in regard to agricultural land Is covered by item 21 of the Provincial List. The Judgment of the Judicial Committee in 'Prafulla Kumar Mukherjee v. Bank of Commerce Limited, Khulna' (1947) 2 M.L.J. 6 Is very instructive and contains the principles of construction in a sufficient form. The question in dispute was as to the validity of the Bengal Money Lenders' Act 1940. Under that Act the amount recoverable by a money lender on his loans or principal and interest was limited and there was also a prohibition against the payment of sums larger than those permitted by the Act. It was contended that the Act trenches upon items within the federal jurisdiction such as promissory notes, banking, etc., and therefore was 'ultra vires' of the Provincial Legislature. The Judicial Committee approved the statement of law made by Sir Maurice Gwyer, C. J., in 'Subrahmanyam Chettiar v. Muthuswami Goun-dan' (1941) 1 M.L.J. Sup 1 already quoted. At page 13 they say:

'Subjects must still overlap and where they do the question must be asked what in pith and substance is the effect of the enactment of which complaint is made and in what list is its true nature and character to be found. If these questions could not be asked, much beneficient legislation would be stifled at birth, and many of the subjects entrusted to Provincial Legislation could never effectively be dealt with.'

Dealing with the argument of the invasion by the Provincial Legislature' to the subjects enumerated in the Federal List they, observe:

'No doubt it is an important matter, not as their Lordships think because the validity of an Act can be determined by discriminating betweendegrees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act. Its provisions may advance so far into Federal territory as to show that its true nature is not concerned with Provincial matters but the question is not, has it trespassed more or less, but is the trespass whatever it be, such as to show that the pith and substance of the Impugned Act is not money-lending but promissory notes or banking? Once that question is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to Its true content.'

In 'A. G. of Saskatchewan v. A. G. of Canada' 62 M.L.W. 439 the Judicial Committee had to consider whether section 6 of the Farm Security Act, 1944, enacted by the legislature of the Province of Saskatchewan, was 'intra vires' of the Provincial Legislature. Under that the contractual obligation of the purchaser of farm land, in the event of the yield of grain grown upon the land falling below a prescribed minimum, was affected by reducing the principal. It was argued that the pith and substance of the legislation was property, civil rights and agricultural land in the province a matter in relation to which the Provincial Legislature had exclusive legislative power and that in so far as the section affected interest it did so only incidentally. But the Judicial Committee held that the legislation sought to modify statutorily the contract between the two parties which would have the effect of not only reducing the rate of interest but also postponing the payment of interest. In this view they held that section 6 trenched upon the dominion field and that the dealing with interest of the Provincial Legislature was not incidental but lay at the heart of the matter. They arrived at this result by applying the principle that the true nature and character of the legislation should be considered. In 'Croft v. Dunphy' (1933) A.C. 156 the question was whether the Parliament of Canada was competent to provide by sections 151 and 207 of the Customs Act that if any vessel registered in Canada was hovering within twelve miles of the Canadian coast, having on board dutiable goods, the vessel and her cargo were to be seized and forfeited. It was held that the authority conferred on parliament to legislate in relation to customs duties extended to enact anti-smuggling provisions. This decision is important not for the facts of the case and Its actual decision but for the following statement of law found at page 165:

'When a power is given to legislate a particular topic it is important, in determining the scope of the power, to have regard to what is ordinarily treated as embraced within that topic in legislative practice and particularly in the legislative practice of the state which has conferred the power. Thus in considering what might be appropriately and legitimately enacted by the Dominion Parliament under its power to legislate in relation to 'bankruptcy and insolvency', it was considered relevant to discuss the usual contents of bankruptcy statutes.'

The relevancy of this passage in regard to the facts of the present case will be considered in due course. In 'Attorney-General for British Columbia v. Attorney-General for Canada', (1937) A.C. 391 the validity of the Farmers' Creditors Arrangement Amendment Act, 1935, came under Judicial scrutiny. Under that Act a fanner who was unable to meet his liabilities as they became due might make a proposal for a composition, and if the proposal was not accepted by the creditors, the matter was referred to Board of Review to formulate a proposal. The Board had the power to confirm the proposal which then became binding on the creditors and the debtor. The Judicial Committee heldthat the impugned legislation was 'intra vires' of the Dominion Parliament under section 91 of the British North America Act, 186T, which empowered it to enact laws in regard to bankruptcy and insolvency. They held that the words 'bankruptcy and insolvency' are wide and comprehensive enough to take in the scheme of composition under the amending Act.

5. Prom the aforesaid discussion of case law, the following principles emerge:

(1) A Constitution Act is an organic and fundamental statute and should be interpreted liberally and not technically or in a narrow spirit. The pith and substance of the Act and its reasonable Intent must be the guiding factors. (2) If the egislature purports to enact in regard to an item with a wide connotation, the said enactment may be confined to the subject-matter within its legal competence. (3) Where the Act contains valid as invalid provisions and the latter are sever-able from the former, effect should be given to the former. (4) An attempt should be made as far as possible to reconcile the conflicting items, and (5) when a power is conferred to legislate on a particular topic it is important to determine the scope of the power to have regard to what is ordinarily created as empowering within that topic in the legislative practice and particularly in the legislative practice of the state which has conferred the power.

6. Having regard to the aforesaid principles, we shall now proceed to consider the validity of the impugned Act. The Constitution Act provides for a hierarchy of powers. The material sections of the Constitution Act read as follows: (1) 'Notwithstanding anything in the two next succeding Sub-sections, the Dominion Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the 'Federal Legislative List'). (2) Notwithstanding anything in the next succeeding subjection, the Dominion Legislature, and, subject to the preceding Sub-section, a provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the 'Concurrent Legislative List'.) (3) subject to the two preceding Sub-sections the provincial Legislature has, and the Dominion Legislature has not, power to make laws for a province or any part thereof with respect to any of the matters enumerated in List II in the said Schedule (hereinafter called the 'Provincial Legislative List').

'List II Provincial Legislative List. Item 21. Land, that is to say, rights in or over land, land tenures, including the relation of landlord and tenant, and the collection of rents, transfer, alienation and devolution of agricultural land; land improvement and agricultural loans; colonization; Courts of Wards; encumbered and attached estates; treasure trove.'

'List III concurrent Legislative List. Item Section Transfer of property other than agricultural land; registration of deeds and documents. Items 12. Bankruptcy and insolvency; administrator general and official trustees.'

In the Provincial Insolvency Act after Section 28, the following section was inserted as Section 28A:

'Insolvent's property to comprise certain capacity. The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all-such powers in or over in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge;

Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or receiver or the Collector acting under Section 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court.'

Learned counsel for the respondent contended that Section 28A should be confined to the property over which the Dominion Legislature has jurisdiction and, as lands are included in the Provincial Legislative List, the Act should be confined to operate Only on the property other than the agricultural lands; whereas counsel for the appellant invoked the principle of 'pith and substance' and contended that the subject-matter of the Amending Act Is covered by item 12 of the Concurrent Legislative List. The two principles relied on by learned counsel are not in conflict. They apply to different set of circumstances. If the 'pith and substance' of an impugned Act is directly governed by a particular item the fact that it may incidentally encroach upon a forbidden field does not affect the validity of the Act. In such a case no question of confining the operation of the Act to the subject matter within the jurisdiction of a particular Legislature would arise as the entire subject matter is within its jurisdiction. On the other hand, if part of the subject matter of the Impugned Act comes under the purview of one legislature and the other part under the jurisdiction of a different legislature, applying the principle relied on by learned counsel for the respondent, cases have declared the validity of the impugned Act by confining its operation to that part of the subject matter within its jurisdiction. The question therefore is whether the 'pith and substance' of the Provincial Insolvency (Amendment) Act, 1948, is covered by item 12 of list 3, 'bankruptcy and insolvency.'

7. One of the principles extracted above indicates that to determine the scope of the power of the legislature to legislate on a particular topic, it is important to have regard to what is ordinarily treated as embraced within that topic in legislative practice. The policy and object of the bankruptcy law is succinctly stated by Blackstone in the following manner:

'Bankruptcy is a proceeding by which, when a debtor cannot pay his debts or discharge his liabilities or the persons to whom he owes money or has incurred liabilities cannot obtain satisfaction of their claims, the State, in certain circumstances, takes possession of his property by an officer appointed for the purpose, and such property is realised and distributed in equal proportions amongst the persons to whom the debtor owes money or has incurred pecuniary liabilities.'

The fundamental characteristic of insolvency legislation is stated by Lord Thankerton in 'A. G. for British Columbia v. A. G. for Canada' 1937 A.C. 391

'In a general sense insolvency means inability to meet one's debts or obligations; in a technical sense, it means the condition or standard of inability to meet debts or obligations, upon the occurrence of which the statutory law enables a creditor to intervene, with the assistance of a Court to stop individual action by creditors and to secure administration of the debtor's assets in the general interest of the creditors.'

It is therefore conceived in the interest of the creditors as a class and provides for distribution of the debtor's assets among them. It is an Important condition of the proper administration of insolvency law that the entire property of the insolvent should be vested in the Court orthe receiver appointed by the Court for the purposes of equitable distribution of the property among the creditors. In a country like India, where agriculture is the main occupation and where agricultural lands form the bulk of the properties of the majority of the people, it is inconceivable that the Constitution Act conferred on the Central legislature power to make a law in regard to Bankruptcy which cannot operate on agricultural lands. A perusal of the provisions of the Provincial Insolvency Act indicates tile scope of the bankruptcy law. Under Section 28 on the making of an order of adjudication, the whole of the property of the insolvent vests in the Court or in a receiver as the case may be. It has been never contended that, under Act V of 1920, agricultural land was excluded from such vesting. Having regard to the scope of the insolvency law, the Constitution Act specifically included the item of bankruptcy in the concurrent list as item 12. The history of the Amending Act also discloses that the said Act was enacted by reason of the power conferred under item 12 of the concurrent List. As aforesaid, under Section 28 of the Provincial Insolvency Act, V of 1920, the whole of the property of the insolvent viests in the Court or the receiver on the making of an order of adjudication. In the Full Bench Case of this Court in 'Balavenkata Seetharama Chettiar v. Official Receiver Tanjore', 49 Mad 849, it has been specifically ruled that on an insolvency of the father, his power to sell the sons' share in the family properties vests in the Official Receiver. But in the year 1943, another Full Bench of this Court, in 'Bamasastrulu v. Balakrishnarao' I.L.R. (1943) Mad 83 relying on the observations of the Judicial committee in 'Sat Narain v. Behari Lal', 6 Lah 1 and 'Sat Narain v. Kishen Das' 17 Lah 644 held that such a power is not 'property within this meaning of Section 28 of the Provincial Insolvency Act and therefore does not vest in the Court or the Official Receiver. This case undoubtedly negatived what had been regarded as settled law till then. The legal consequences of this decision were far-reaching and the creditors were deprived of a large extent of properties which they were accustomed to look to for discharging their liabilities in the case of the debtor's insolvency, pre-sumbly, the Amending Act was passed to get round the Pull Bench decision and to declare the correctness of the pre-existing law. Under the Amending Act the capacity of the Official Receiver to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent are also included in the definition of property. The 'pith and substance' of the Amending Act is clearly within the scope of item 12 of List 3: 'bankruptcy and insolvency'. The true nature and character of the legislation the scope and the ambit of it obviously relate to legislation in regard to bankruptcy and insolvency. The fact that it incidentally infringes on some other items in the Provincial List does not affect its validity.

8. Looking from a different angle, the same result would follow. A comperative study of list I and list 3 discloses that item 12 of list III is not in conflict with item 21 of List II. The following items may be noticed for comparison:

'Item 7. Wills, intestacy, and succession, save asregards agricultural land.

Item 8. Transfer of property other than agricultural land; registration of deeds and documents.

Item 9. Trusts and trustees.

Item 10. Contracts, including partnership, agency, contracts of carriage, and other special forms of contract, but not including contracts relating to agricultural land.

Item 11. Arbitration.

Item 12. Bankruptcy and insolvency.'

It will therefore be seen that whenever the Legislature intended to exclude agricultural lands it said so in definite terms. The non-exclusion of agricultural lands from item 12 is an indication that the legislature used the words 'Bankruptcy and Insolvency' In a comprehensive sense so as to empower it to enact laws in regard to bankruptcy and insolvency in respect of agricultural lands also. For the aforesaid reasons, we hold that the Amending Act of 1948 is 'intra vires' of the Dominion Legislature.

9. The learned counsel for the plaintiff next contended that on a construction of the provisions of Section 28A the power of the manager or the father, as the case may be cannot vest in the Official Receiver. For appreciating this contention thel relevant provision may be again extracted:

'28A. The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge.'

The learned counsel for the plaintiff contended that under this provision the powers of the insolvent mentioned therein cannot vest in the Official. Receiver as at the commencement of his insolvency or before his discharge such power will not be outstanding in him. Stress is laid on the words. 'at the commencement of his insolvency or before his discharge.' Relying on those words it is argued that as the properties of the insolvent vested in the Official Receiver, the insolvent could not have any power outstanding in him between the dates mentioned in the section. The argument may be. ingenious but has no merits. The necessity for introducing this section arose because the Courts. have held that the word 'property' in Section 28(2) did not comprise the power of the father or the manager, as the case may be, to alienate the other members' shares in the family properties. The Amending Act says that the property of the Insolvent shall comprise also such power. Either under Section 28 or under Section 28A the property of the insolvent can vest only after his adjudication i.e. at the commencement of the insolvency. It cannot conceivably vest in the Official Receiver before the adjudication of the insolvent. By reason of Section 28A that property comprises the said power. If the whole of the property of the insolvent can vest in the Court or in the receiver at the commencement of the insolvency, there is no difficulty in holding that along with the entire property, his powers mentioned in Section 28A also vest in the receiver. The words 'or before his discharge' also are emphasised in support of the learned counsel's argument that during that period the insolvent could not have any such power in him as all his properties would have vested in the Court or the receiver. But this ignores the fact that pending the insolvency the insolvent might get some properties or powers by devolution or otherwise. Such properties of powers also would vest in the Court or the receiver. The wording of Section 28A is not new. The material portions of Section 52 of the Presidency-Towns Insolvency Act read as follows:

'52. (1) The property of the insolvent divisible amongst his creditors, and in this Act referred to as the property of the insolvent, shall not comprise the following particulars, namely:

(2) Subject as aforesaid, the property of the insolvent shall comprise the following particulars,. namely: (b) the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit atthe commencement of his Insolvency or before his discharge.'

The Judicial Committee held on a construction ofthat section that on the adjudication of the father of a Hindu Joint family governed by the Mitakshara' his power to sell Joint family property to pay his antecedent debts not incurred for immoral or illegal purposes vests in the Official Assignee under Section 52(2) of the Presidency Towns Insolvency Act. The decision of the Judicial Committee on the analogous provision is binding on us. Further, we do not also see any insurmountable difficulty in giving effect to the clear intention of the legislature.

10. The learned counsel for the plaintiff furtherargued that Section 28A of the Provincial Insolvency Act has no application to the present case as according to him there was a final decision by a competent Court within the meaning of the first proviso. He says that the 'final decision by a competent Court' is the decision of the subordinate Judge which is under appeal before us now. We cannot accept this argument. ' Final decision by a competent Court' can only mean the decision of the Court which ultimately disposes of the suit. As an appeal has been filed against the Judgment of the subordinate Judge, it is impossible to treat his judgment as final within the meaning of the proviso.

11. The learned counsel for the plaintiff argued finally that under the aforesaid two sale deeds only the interests of the first defendant were conveyed by the Official Receiver Ex. P. 2 is one of the sale 4eeds and is dated 16th July 1934. Under thatdocument, the right title and interest of the insolvent in all the properties, more particularly described in the schedule together with all rights etc. was conveyed to the purchaser. At the time of the execution of the sale deed, the well-understood legal position was that the father could convey the interests of the sons also for his debts_ and therefore the receiver in whom the father's interests vested, had also a similar right. There is no reason to assume that he did not purport to convey the undoubted rights he had in the property. Indeed the sale notice Ex. D-6, clearly says that he will sell also the rights over the sons' shares. Further the schedules annexed to the sale deed give the entire extent of the properties sold. In the schedules it is not stated that only the father's share was sold. Even in the plaint the plaintiff understood this transaction as conveying the entire family estate. We therefore hold that under Ex. P-2 not only the father's interest but the interestsof the sons also were sold.

12. The other sale deed is Ex. P-4 dated 12-12-1935. By this sale deed the receiver purported to sell all the right, title and interest of the insolventincluding the son's share if any therein. The schedule contains the entire properties. Ex. D-6, the sale notice dated 27-6-1933, clearly mentions that the receiver was selling the disposing power of the father over the son's share, if any, of the Insolvent in the properties mentioned therein. As already stated, even in the plaint the plaintiff himself understood the transaction as conveying the entire property. We therefore hold that the entire properties including the son's shares were sold under Ex. P-2 and Ex. P-4.

13. In the memorandum of objections filed by the defendants 2 and S, it is contended that the lower Court should have given a decree to them also in regard to their shares in the suit properties. In the view we have taken on the merits these defendants are not entitled to the relief.

14. In the result the appeal is allowed with costs throughout and the memorandum of objections is dismissed with costs.

15. In our view a substantial question of law as to the interpretation of the Act arises in this case. Leave granted under Section 205 of the Government of India Act.


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