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Arasappa Pillai and ors. Vs. V. Thandavan Pillai and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 2331 of 1948
Judge
Reported inAIR1950Mad770; (1950)IIMLJ173
ActsProvincial Insolvency Act, 1920 - Sections 28A; Presidency Towns Insolvency Act, 1909 - Sections 52 and 52(2)
AppellantArasappa Pillai and ors.
RespondentV. Thandavan Pillai and anr.
Appellant AdvocateT.M. Ramaswami Iyer, Adv.
Respondent AdvocateM.R. Narayanswami and ; K. Vaidheeswaran, Advs.
DispositionAppeal dismissed
Cases ReferredRamasastrulu v. Balakrishna Rao
Excerpt:
.....- section 28a of provincial insolvency act, 1920 and sections 52 and 52 (2) of presidency towns insolvency act, 1909 - matter pertaining to insolvency of manager other than father of hindu joint family - powers of father-manager are greater than powers of manager who is not father of other coparceners because father has power not only to sell property in order to discharge liability but also right to sell his sons interest in family estate to discharge his own personal debts provided that they have not been incurred for any immoral or illegal purposes - fathers power to sell his sons property within section 52 (2) (b) of presidency towns insolvency act but power of manager who is not father to sell family assets to meet family liability not power which he can exercise for his..........bench that the central legislature would bring the provincial insolvency act and the presidency towns insolvency act into line in respect of the difference between them that the latter contains section 52(2)(b) for which there is no counterpart in the former. the trust so expressed has been fulfilled by the insertion of section 28-a in the provincial insolvency act in terms verbatim et litteratim identical with those of section 52(2)(b) of presidency towns insolvency act. 3. looking at the words 'for his own benefit' occurring in the body of the section it prima facie strikes one that they can have reference only to a father manager and not to a manager other than the father. to use the language of leach c. j. in the full bench judgment in ramasastrulu v. balakrishna rao, i. l. r......
Judgment:

Raghava Rao, J.

1. The short question for detrmination is this appeal which evoked a long argument of two days in fall and the better part of a third is whether Act XXV [35] of 1948 applies to cases of insolvency of a manager other than the father of a Hindu joint family. I feel highly indebted to counsel for their forcible and pointed and in no sense unnecessarily prolonged argument. The lower appellate Court has answered the question in the negative and the appellants assail the answer as Erroneous,

2. The primary matter for consideration is the language of the body of new Section 28-A together with the second proviso thereto and not the first of Act v [5] of 1920 which has come in by reason of Act XXV [25] of 1948. In the body of the new section the crucial words are 'for his own benefit' and in the relevant proviso the material words are the words of reference to 28th day of July 1942. That date is the date of the judgment of a Full Bench of this Court reported in Ramasastrulu v. Balakrishna Rao, I. L. R. (1943) Mad. 83: A. I. R. 1942 Mad. 682 which throw out an expression of trust on the part of the Full Bench that the Central Legislature would bring the Provincial Insolvency Act and the Presidency Towns Insolvency Act into line in respect of the difference between them that the latter contains Section 52(2)(b) for which there is no counterpart in the former. The trust so expressed has been fulfilled by the insertion of Section 28-A in the Provincial Insolvency Act in terms verbatim et litteratim identical with those of Section 52(2)(b) of Presidency Towns Insolvency Act.

3. Looking at the words 'for his own benefit' occurring in the body of the section it prima facie strikes one that they can have reference only to a father manager and not to a manager other than the father. To use the language of Leach C. J. in the Full Bench judgment in Ramasastrulu v. Balakrishna Rao, I. L. R. (1943) Mad. 83: A. I. R. 1942 Mad. 682

'The powers of a father-manager are greater than the powers of a manager who is not the father of the other coparceners, because the father has power not only to sell family property in order to discharge a family liability, but also the right to sell his sons' interest in the family estate to discharge his own personal debts, provided that they have not been incurred for any immoral or illegal purposes....... A father'spower to sell his sons' property must be taken to be a power falling within Section 52(2)(b) of the Presidency Towns Insolvency Act, but the power of a manager who is not the father of the other coparceners to sell family assets to meet a family liability is not a power which he can exercise for his exclusive benefit, and Section 52(2)(b) may not apply in such a case.'

4. Then again, in Verupaksha Reddi v. Chanalal Siva Reddi, I. L. R. (1944) Mad. 212: A. I. R. 1943 Mad. 652 in which Krishnaswami Aiyangar J. who had been himself a party to the Full Bench ruling, delivered the judgment of the Court consisting of himself and Mockett J. it is observed at page 215 of the report that while the father's power being a power which he could exercise for his own benefit within Section 52(2)(b), Presidency Towns Insolvency Act, would vest in the Official Assignee, the manager's power would not, as his power is exercisable for the benefit of the family and not for his own. I realise that the observations in the one case as well as in the other which I have extracted are obiter; but they undoubtedly tend to support the prima facie construction above indicated of the language of the statute with which we are concerned, which is modelled upon the language of the corresponding section of the Presidency Towns Insolvency Act.

5. As against these observations my attention has been drawn by learned counsel for the appellants to a sentence in the judgment of Gentle C. J. on behalf of the Court consisting of himself and Govindarajachari J. in the case reported in Venkata Reddi v. Suryanarayanamurthi : (1947)2MLJ507 which runs thus,

'At the time of the sale it was ordinarily believed that the power held by a manager of a joint Hindu family and also by a father who was a member of a joint Hindu family with his sons, to sell the family property in circumstances permitted by the Hindu law devolved on the Official Receiver, under the Provincial Insolvency Act as -undoubtedly it does pursuant to Section 52(2)(b) of the Presidency Towns Insolvency Act.'

The clause of the sentence underlined (hear italicised) by me is stressed by counsel as entitled to great weight as an expression of opinion of a Judge of ample experience on the Original Side of this Court as well as of the High Court at Calcutta. As between the two seta of observations referred to I have no hesitation in preferring the former to the latter as mere consonant to the actual normal meaning of the words 'for his own benefit' in the statute.

6. I may also notice that these words which have been copied into the Presidency Towns Insolvency Act from Section 38, English Bankruptcy Act have been in England interpreted as meaning 'for his own benefit' in a casa reported in In re Taylor's Settlement Trust, (1929) 1 Ch. 435: 98 L. J. Ch. 142. That case is referred to in Williams on Bankruptcy, 16th Edn. at p. 266 in these terms:

'Where a settlor by a voluntary settlement directing his trustees to accumulate and invest income reserved to himself power to requite the whole of the income for any year, or the whole income remaining uninvested, to be paid as to one half to himself and as to one half to a lady who afterwards became his wife, Eve J. held that the power was indivisible and could not be exercised by the settlor for his own benefit within the meaning of Sub-section (b), and, in consequence, that his capacity to exercise it did not pass to his trustee in bankruptcy.'

It is clear that as ruled by the Privy Council in Trimble v. Hill, (1880) 5 A. C. 342: 49 L. J. P.C. 49.

' Where a colonial legislature has passed an Act in the same terms as an Imperial Statute, and the latter has been authoritatively construed by a Court of Appeal in England, such construction should be adopted by the Courts of the Colony.'

The same principle, in my opinion, applies to the construction of Section 52(2)(b), Presidency Towns Insolvency Act by Courts in this country In so far as the corresponding terms of Section 38, English Bankruptcy Act have been construed in a particular manner by English Courts. It is argued for the appellants relying on the observation of Krishnan J. in the Full Bench ruling in Bala Venkata Seetharama v. Official Receiver, Tanjore, 49 Mad. 849: A. I. R. 1926 Mad. 994 that a general power of appointment under the English law is a very different thing in law from the power of the Hindu father or manager under the Hindu law. In making that observation the learned Judge was dealing with the argument before the Court that a power could never be treated as property in view of the English ruling in Ex parte Gilchrist, In re Armstrong, (1886) 17 Q. B. 521 : 55 L. J. Q. B. 578. That does not, I am clear, invalidate the process of interpretation that I am adopting, the words 'for his own benefit' in Section 52(2)(b), Presidency Towns Insolvency Act with the aid of decisions on the meaning of the same words in the corresponding section of the English Bankruptcy Act. 6. It is contended for the appellant that there are decisions of this Court in Rangayya Chettiar v. Thanikachala Mudali, 19 Mad. 74 (of a single Judge, Subramania Aiyar J.) and in Nunna Setti v. Chidarboyina, 26 Mad. 214 of a Bench (Bhashyam Aiyangar and Moore JJ.) which interpreting the words 'for his benefit' in Section 30, Insolvent Debtors Act, 11 and 12 vict. Ch. 21 Sections 7, 30 have held them to be of sufficient amplitude to cover the power of a manager who is not the father to sell the interest of his coparceners for purposes binding upon the coparcenary. It is urged that there is no substantial difference between those words 'for his benefit' and the words 'for his own benefit' which occur in Section 52(2)(b),Presidency Towns In-solvency Act and in the new Section 28A, Provincial Insolvency Act. Whether the learned Judges in those cases did or did not mean a distinction between the two sets of words--and I am prepared to assume that they did not mean any such distinction--there is no doubting the fast that a course of decisions under Section 266, Civil P. C. then in existence (Section 60 of the present Code) illustrated by Jagabhai Lalubhai v. Vajbhukandas Jagjivandas, 11 Bom. 37 and Sardarmal v. Sabapathi, 21 Bom. 205, entered into the reasoning of the learned Judges in their interpretation of the words 'for his benefit' in Section 30, Insolvent Debtors Act there in question.

7. The relevancy of that course of decisions under a different Statute to the interpretation of the Presidency Towns Insolvency Act has been negatived by the Privy Council in their decision in Sat Narain v. Beharilal , in no uncertain terms, Says Sir John, Edge in delivering the judgment of their Lordships at p. 11 of the report:

'Cases which have arisen under Section 266, Civil P. C. 1882, or under Section 60, Civil P. C., 1908, depended on different considerations, and decisions in cases under those sections are likely to mislead a Court which has to construe the Presidency Towns Insolvency Act 1909.' His Lordship further observes at p. 12 of the report: 'Their Lordships do not intend to say one word which might have the effect of disturbing and raising doubts as to decisions under Section 266, Civil P. C., 1882, or under Section 60 of the present Code but they must deal with the matter upon the words of the statute which has to be applied in this case.'

Moreover, while their Lordships in fact refer to Rangayya, Chetti v. Thanikachala Mudali, 19 Mad. 74, Munna Setti, v. Chidaraboyina, 26 Mad. 214 and Fakirchand Motichand v. Hurruckshand, 7 Bom, 438, in the course of their judgment, it is only to put them aside as cases decided under a different statute as appears from their Lordships' observations to be found at page 23 of the report. As Curgenven J. remarks in Official Receiver, Anantapur v. Ramachandrappa, 52 Mad. 246 : A.I.R. 1929 Mad. 166 referring to the following observation of Bhashyam Aiyangar J. in Nunna Setti v. Chidaraboyina, 26 Mad. 214.

'If the question were res integra and not covered by a course of judicial decisions, bearing upon the corresponding expression occurring in Section 266 of the Civil P. C., (now Section 60) I should entertain considerable doubt as to whether a power which, under the Hindu law, a managing member of a joint Hindu family has over the interests and shares of the junior members in the family property, is within the meaning of Section 30, Insolvency Act, a power vested in the insolvent which he can lawfully exercise for his benefit.'

Since the Privy Council have now deprecated the practice of deriving an analogy from Section 266, Civil P. C., and have upon this ground among others disposed of the cases which stood in the learned Judge's way, this observation is entitled to much weight as an expression of Bhashyam Aiyangar J.'s personal opinion.'

Mr. Ramaswami Aiyar for the appellants has in support of the appeal also relied upon the reference to 28th day of July 1942 in the second proviso to Section 28-A, Provincial Insolvency Act as indicating that since that is the date of the decision in Ramasastrulu v. Balakrishna Rao, I. L. R. (1943) Mad. 83 : A. I. R. 1942 Mad. 682 which was itself concerned with the right of a manager of a joint Hindu family not the father, to sell the family assets to discharge debts which are payable out of the joint estate as or as not property within Section 2(d), Provincial Insolvency Act, it follows that the Legislature had in mind cases of managers, not fathers, as well as cases of father-managers in enacting Section 23-A. He has also drawn my attention in particular to the observation at page 94 of Ramasastrulu v. Balakrishna Rao, I. L. R.(1943) Mad. 83: A. I. R. 1942 Mad. 682 FB which is as follows:

'If we are to have regard to the judgments of the Privy Council in the Lahore cases, as we must, we must hold that under the Provincial Insolvency Act the manager's power to sell does not vest in the Official Receiver.'

As regards the argument founded upon the reference to the date in the proviso I am not prepared to say that prima facie it is without force. At the same time as observed by Lord Halsbury L. C. in his speech in the House of Lords in the case in West Derby Union v. Metropolitan Life Assurance Society, 1897 A. C. 647 : 66 L. J. Ch. 726, a proviso cannot be so read as to suggest that the previous part of the section of which it is & proviso should imply by law the existence of words there of which there is not a trace in the previous words of the section itself. So to read, rules His Lordship, would certainly be a very serious invasion upon any rule of construction by which any document, whether an Act of Parliament or anything else, has ever been construed, and one should be very much averse indeed to lend any countenance to such a mode of construing a proviso.

8. Then as regards the argument founded upon the observation of Leach C. J. at page 94 of Ramasastrulu v. Balakrishna Rao, I. L. R. (1943) Mad. 83: A. I. R. 1942 Mad. 682 I am perfectly clear that the learned Judge did not mean to say going back upon the view already expressed by him at pages 90 and 91 of the Report and referred to in the foregoing part of this judgment anything to the effect that under the Presidency Towns Insolvency Act the manager's power to sell would vest by reason of Section 52(2)(b) while under the Provincial Insolvency Act it Would not so vest for want of a similar provision.

9. I have refrained from entering into any detailed discussion such as has been attempted at the hearing by counsel on both sides of the case law prior to the enactment of Act XXV [25] of 1948, except in so far as strictly necessary to the interpretation of the words of Section 28-A which that Act has introduced into the Provincial insolvency Act v [5] of 1920. In my opinion, such a discussion is not, except to the extent indicated herein relevant to the interpretation of the statute with which I am concerned. I may add that the view taken by me accords with that expressed in Mayne on Hindu Law and Usage, latest Edition, para. 350 and 350 (a) at pages 442 to 446.

10. In the result, the second appeal fails and is dismissed with costs. No leave.


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