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The Official Receiver Vs. M.R.M.K.A.R.R.M. Arunachalam Chettiar - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtChennai
Decided On
Reported inAIR1934Mad217; (1934)66MLJ412
AppellantThe Official Receiver
RespondentM.R.M.K.A.R.R.M. Arunachalam Chettiar
Cases ReferredSripat Singh Dugar v. Prodyat Kumar Tagore
Excerpt:
.....been incurred for immoral purposes, only one-third would be affected by the decree while if that contention was unsuccessful the whole of the estate would remain subject to the order for sale. but an attachment or sale of their shares in such circumstances will hold good till it has been established that the debt is not binding on their shares......after the date of the attachment. it therefore follows that the father's power of disposal of the sons' shares had been destroyed by the existing attachment of those shares; and the official receiver cannot therefore get any power to deal with the sons' shares by reason of the order of adjudication.' it is now argued for the appellant, official receiver, that this view of the law is wrong. mr. krishnaswamier in his argument has, of course, to allow that the shares of the sons do not vest in the official receiver. this has been decided by the privy council in sat narain v. behari lal (1924) l.r. 52 indap 22 : i.l.r. 6 lah. 1 : (1924) 47 m.l.j. 857. but he refers us to the full bench decision in seetharama chettiar v. official receiver, tanjore i.l.r. (1926) mad. 849 : (1926) 51 m.l.j......
Judgment:

Bardswell, J.

1. This is an appeal against the decision of., Madhavan Nair, J. in Second Appeal. The appellant is the Official Receiver of Coimbatore. A suit (O.S. No. 206 of 1926 on the file of the Subordinate Judge of Coimbatore) was brought by Arunachalam Chetti against Krishnasvvami Goundan on a promissory note. There was an attachment before judgment of what was admittedly the joint family property of Krishnaswami Goundan, though it was attached only as being the property of Krishnaswami Goundan, and his sons were not made parties to the suit. The plaintiff on 11th December, 1926, got a decree and applied in execution for the sale of the attached property. The judgment-debtor, Krishnaswami Goundan, filed an insolvency petition (I. P. No. 320 of 1927), on which he was adjudicated an insolvent in February, 1928. By an order passed in December, 1927,- the Official Receiver had been made interim Receiver pending the adjudication and on 6th January, 1928, both he and the judgment-debtor applied for stay of the sale in execution. The executing Court ordered that the sale should go on but that the sale proceeds should go to the Official Receiver. The sale proceeds were sent to the Official Receiver accordingly but Arunachalam Chettiar applied for three-fourths of them to be sent to the executing Court on his behalf, on the ground that they represented the shares of the three sons of the insolvent, which shares had been attached before the presentation of the insolvency petition. The three-fourths were ordered to be sent, and the Official Receiver transmitted the money. He had not, however, been given notice of the decree-holder's application and he filed the petition with which this appeal is concerned, praying that he might be heard before a cheque was issued. The Principal Subordinate Judge held that no cheque could be issued to the decree-holder for the three-fourths but that the three-fourths should be sent back to the Official Receiver. On appeal, however, the District Judge ordered the money to be returned to the executing Court and his decision has been upheld by Madhavan Nair, J. on Second Appeal.

2. That learned Judge in his judgment has thus expressed himself 'The petition for adjudication was presented after the date of the attachment. It therefore follows that the father's power of disposal of the sons' shares had been destroyed by the existing attachment of those shares; and the Official Receiver cannot therefore get any power to deal with the sons' shares by reason of the order of adjudication.' It is now argued for the appellant, Official Receiver, that this view of the law is wrong. Mr. Krishnaswamier in his argument has, of course, to allow that the shares of the sons do not vest in the Official Receiver. This has been decided by the Privy Council in Sat Narain v. Behari Lal (1924) L.R. 52 IndAp 22 : I.L.R. 6 Lah. 1 : (1924) 47 M.L.J. 857. But he refers us to the Full Bench decision in Seetharama Chettiar v. Official Receiver, Tanjore I.L.R. (1926) Mad. 849 : (1926) 51 M.L.J. 269 (F.B.) in which the decision of the Privy Council in the Lahore case has been considered and explained and it has been held that, alike under the Presidency-towns Insolvency Act and the Provincial Insolvency Act, the power of a Hindu father to sell the shares of his sons for paying his just and proper debts, vests in the Official Receiver, the Privy Council decision not being an authority to the contrary. He also quotes another Full Bench decision in In re Sellamuthu Servai I.L.R. (1923) Mad. 87 : (1923) 46 M.L.J. 86 (F.B.) in which it was held that the Official Assignee standing in the shoes of the insolvent father could exercise the father's right of selling the sons' shares also in the ancestral estate, in payment of any debt incurred by the father that was neither illegal nor immoral. What has to be shown, however, in the present case is whether the selling power of the insolvent over his sons' shares in the property was available at the time when the insolvency petition, on which adjudication followed, was presented so that that power was available for being vested in the Official Receiver.

3. There can be no doubt but that what was attached in the suit against Krishnaswami Goundan and what was afterwards brought to sale was the entire joint family property. Mr. Krishnaswamier for the appellant has argued that as far as the sons' shares were concerned it was only the father's rights of sale over them that were attached and sold but such is certainly not the case. The petition for attachment before judgment, the execution petition and the verified statement which was filed with the execution petition make it clear that it was the property itself in its entirety that was attached and afterwards brought to sale. It is true that the property is described as being the property of the insolvent (judgment-debtor) and that no reference is made to the insolvent's sons but that will not make it any the less the property of the insolvent and his three sons or alter the fact that it was the entire property as such. It may be that under Section 60 of the Civil Procedure Code, property which can be attached includes saleable property over which the judgment-debtor has a disposing power which he may exercise for his benefit, but if property of such a nature is to be attached it should be specifically stated that such is the case. Here what was attached was clearly the whole of the immoveable property and not any mere right of sale over it or any part of it. Mr. Krishnaswamier, however, further argues that even so the attachment will not be binding upon the shares of the sons in that they were not parties to the suit against the insolvent and that there was no order prohibiting the sons from alienating their shares. With reference to the latter of these two points he cites Subraya v. Nagappa I.L.R. (1908) Bom. 264 in which it was held that when the right, title and interest of a Hindu son in joint ancestral property has been attached in execution of a decree against him and its private alienation by him has been prohibited by an order of the Court under Section 276 of the Code of Civil Procedure (to which the present Section 64 corresponds in a modified form his father is deprived of the power of alienation of that interest in satisfaction of his own debts. But that was a case in which the share of a son had been separately attached in execution of a decree in a suit in which he was the sole defendant in respect of a debt due from him personally. The present case in which the entire property was attached before judgment in a suit brought against the father is very different. Such a suit can be brought against the father alone, as in the present instance, or the sons may be joined as parties in it, but the fact of the sons not being joined in it will not affect the matter as it has been argued for the appellant that it will do. In Gopalakrishnayya v. Gopalan I.L.R. (1928) Mad. 342 : : AIR1928Mad479(1) , which has been relied upon by Madhavan Nair, J., the sons had been made parties to the suit and their shares had been attached so as, as it was held, to prevent the Official Receiver from exercising powers of sale over them. But it was held by a Bench of this Court in Doraiswami v. Nagaswami : AIR1929Mad898 that a decree passed against the father personally after the exoneration of his sons can be executed against such family property, that such property is liable for the father's debt and that the sons could claim exoneration from the liability only on the ground that the debt is immoral or illegal. Even in this case, the sons, though exonerated, had been parties, but there is the further case also decided by a Bench, of Subramania Pillai v. Venkatarama Reddi : AIR1930Mad257 in which a decree had been obtained against a father only. It was there held that where a money decree had been obtained against a father and properties had been attached, even when there was ambiguity in the description of the properties such as by the use of the words 'right, title and interest of the judgment-debtor,' still it must be taken prima facie that the intention in the execution proceedings is to proceed against the whole of the interest that may be proceeded against on account of the Hindu Law that a father's debts may be executed against the son, and that execution against the father is effective enough to bind the son also. In the case now under notice there is no ambiguity either in the application for attachment or in the execution petition. This last decision is based upon a number of decisions of the Privy Council, none, however, of which is specified. But one of them appears to be that of Sripat Singh Dugar v. Prodyat Kumar Tagore . In that case a mortgage decree had been granted against the father of a joint Mitakshara family who alone was party to the mortgage, and in execution of it the entire family property was brought to sale. The sons and other members of the family contended that all that had passed under the sale was the father's one-third share. In a suit for a declaration that only one-third share had passed it was found that the debt was for a legal and necessary purpose and that when the contention that such was not its nature had failed, the whole of the property must be deemed to have passed by the sale. In the course of his judgment Buckmaster, L.C. remarked:

The property in question was joint property governed by the Mitak-shara Law. By that law a judgment against the father of the family cannot be executed against the whole of the Mitakshara property if the debt in respect of which the judgment has been obtained was a debt incurred for illegal or immoral purposes. In every other event it is open to the execution creditor to sell the whole of the estate in satisfaction of the judgment obtained against the father alone.

4. In the same judgment it was held that the use of the words ' right, title and interest' (of the judgment-debtor) could only be taken to, mean that if it could be established that the debt had been incurred for immoral purposes, only one-third would be affected by the decree while if that contention was unsuccessful the whole of the estate would remain subject to the order for sale. If the meaning was otherwise the execution creditor would have been deprived of the undoubted right that he possessed, except upon the happening of one event which in the result has never arisen, to sell the entirety of the estate. This case is conclusive. There is no doubt an advantage in joining the undivided sons in a suit against their father for a debt, in that they can then at once set up their case, if they have one, of the debt being one that is illegal or immoral, but it is clear that the whole joint family property can be proceeded against as such even if they are not parties to the suit. Of course it is still open to them, if they are not parties to the suit, to oppose any proceedings against their shares on the ground of the debt being one that does not bind them, and to that extent any such proceedings in a suit to which they are not parties are conditional. But an attachment or sale of their shares in such circumstances will hold good till It has been established that the debt is not binding on their shares. In the present case no attempt has been made to show that it is not so binding.

5. The fact that the sons' shares have now been sold cannot make any difference to the position. The sale proceeds of them represent those shares, though they have taken another form.

6. Nor can Section 51 of the Provincial Insolvency Act have any application. By that section where execution of a decree has issued against the property of a debtor, no person shall be entitled to the benefit of the execution against the Receiver except in respect of assets realised in the course of the execution by sale or otherwise before the date of the admission of the petition. In so far as there has been execution against the shares of the sons it is not an execution against the property of the insolvent. As. to his own quarter share the sale proceeds of it have gone to the Official Receiver for the benefit of the general body of creditors.

7. In my opinion the decision of our learned brother is correct and this appeal must be dismissed with costs.

Horace Owen Compton Beasley, Kt., C.J.

8. I agree.


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