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Swarupchand Rayanji and ors. Vs. Majeti Janakiramayya and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1942Mad330; (1942)1MLJ318
AppellantSwarupchand Rayanji and ors.
RespondentMajeti Janakiramayya and ors.
Cases ReferredPaianiappa Chettiar v. Palani Goundan
Excerpt:
- - 3. taking the first contention it seems to me that it is well founded. it is also well settled that the power of a father to alienate his son's share for his debts which are neither illegal nor immoral would however vest in the official receiver, but the power is subject to the same qualifications as it is in the father's hands. therefore during the pendency of the attachment of the joint family property or the son's interest therein, should the father sell the son's share, as between the alienee and the father and the son, it would be perfectly valid though such an alienation would not avail against the attaching creditor......insolvent and the power of the first defendant to sell the plaintiff's share in the joint family property did not vest in the official receiver. it is admitted that the properties were attached before judgment on 18th march, 1931, and they were again attached : after the decree on 29th february, 1932. subsequent to the decree in april, 1932, the official receiver put in a claim petition stating that all the properties that were attached were the self-acquired properties of defendants 1 and 2 and the plaintiff had no share therein (ex. g). that petition was dismissed on 26th april, 1932 on the ground of unnecessary delay. there was an appeal preferred to the high court and it was dismissed on 18th september, 1932, on the ground that the appeal was incompetent and the remedy of.....
Judgment:

Venkataramana Rao, J.

1. These two appeals arise out of a suit for partition filed by the plaintiff against his father the first defendant and his uncle the second defendant, whose estates were on the date of the suit vested in the Official Receiver, Kistna, who was impleaded as the twenty-first defendant. The plaintiff claimed a fourth share in all the properties comprised in the plaint and incidentally prayed for a declaration that certain alienations effected by the Official Receiver, Kistna, were not binding on his : share. Defendants 3 to 20 are the various alienees but these appeals are confined to the alienations in favour of defendants 4, 11, 12 and 13, Appeal No. 427 of 1938 is by defendants 12 and 13 while Appeal No. 428 of 1938 is by defendants 4 and 11. The properties which are the subject-matter of Appeal No. 427 of 1938 are items 4 and 5 of B Schedule and items 2 and 3 of C Schedule and the properties which are the subject-matter of Appeal No. 428,of 1938 are items 8 of A Schedule and 10 of B Schedule and item 1 of C Schedule. The various dates of sale to the said defendants are as follows:

12th defendant ... 19th September, 1932. (Ex. VII)13th defendant ... 29th November, 1932. ' 2311th defendant ... 9th October, 1932. ' II4th defendant ... 7th December, 1932. (Ex. I)

The second defendant was adjudicated insolvent on 12th September, 1931, and the first defendant on 11th January, 1932. The first defendant and the father of the second defendant are the sons of one Janamsetty and they were on the date of. the insolvency of the second defendant admittedly members of an undivided Hindu family and upto the date of suit no division took place between the first defendant and his son the plaintiff and the second defendant or between the first defendant and the plaintiff. It is not disputed that the plaintiff is entitled to a fourth-share but his claim is resisted on the ground that the said properties constitute the self-acquired property of defendants 1 and 2, and the plaintiff has no title thereto and assuming they are joint family properties, they were validly sold by the Official Receiver in pursuance of the power to sell the share of the plaintiff for the debts of the 1st defendant. The plaintiff's case is that so far as the question of self-acquisition is concerned, it was concluded in his favour by reason of the orders on two claim petitions filed by the Official Receiver in the course of the execution of the decree in O.S. No. 28 of 1931, which was obtained by the 16th defendant against the plaintiff and defendants 1 and 2 and that in any event the properties which were sold were the subject-matter of attachment in the said suit long before the first defendant was adjudicated insolvent and the power of the first defendant to sell the plaintiff's share in the joint family property did not vest in the Official Receiver. It is admitted that the properties were attached before judgment on 18th March, 1931, and they were again attached : after the decree on 29th February, 1932. Subsequent to the decree in April, 1932, the Official Receiver put in a claim petition stating that all the properties that were attached were the self-acquired properties of defendants 1 and 2 and the plaintiff had no share therein (Ex. G). That petition was dismissed on 26th April, 1932 on the ground of unnecessary delay. There was an appeal preferred to the High Court and it was dismissed on 18th September, 1932, on the ground that the appeal was incompetent and the remedy of the Official Receiver was to file a suit under Order 21, Rule 63. (Vide Official Receiver, Kistna v. Imperial Bank of India (1934) 68 M.L.J. 78 : I.L.R. Mad. 403 . It is unnecessary to deal with the correctness of this decision as both the Official Receiver and the 16th defendant would be governed by it. While the appeal was pending in the High Court, the Official Receiver preferred another claim petition on 4th August, 1932, which was also dismissed on the ground of delay. Admittedly no suit was filed within one year from the date of either of the orders on the claim petitions. The learned Judge in the Court below has taken the view that it would not be open to the defendants to contend that the plaintiff has no right in the suit properties. By reason of this view he did not go into the question of fact as to whether the properties were self-acquired or not. On the footing that the property was the joint family property, the learned Judge negatived the defence of the defendants on the ground that inasmuch as the sale by the Official Receiver in favour of the various defendants was subsequent to the attachment he was not competent to sell the plaintiff's share in the suit property.

2. In these appeals Mr. Satyanarayana Rao on behalf of the appellants canvasses the soundness of the view taken by the lower Court on both the points. His contention is that the orders on the claim petitions cannot bar the Official Receiver and therefore the alienees who claim under him. His next contention is that though it is true that the pendency of an attachment of the joint family property would prevent the Official Receiver from selling the son's share, it would not prevent the vesting of the right of the first defendant to sell the plaintiff's share on the ground that the attachment only prohibits alienation so as not to defeat claims under that attachment.

3. Taking the first contention it seems to me that it is well founded. Whether a judgment-debtor is a party to an order on a claim petition so that he could be rendered bound thereby is a question of fact in each case. In this case, no doubt from the cause title in the claim petition it would appear that the Official Receiver made not only the decree-holder a party but also the plaintiff and defendants 1 and 2 party respondents 2 to 4. But from the order on the claim petitions it would appear that no notice was served on respondents 2 to 4, and the decree-holder alone was served and that the dismissal was on the ground of delay. Though the plaintiff was intended to be made a party to the petition, no notice having been served on, him at the time when the order was made, he could not be considered to be a party to the order on the claim petition. This was the view taken in Gruruva v. Subbarayudu I.L.R.(1890) Mad. 366 where the learned Judges remarked as follows:

A judgment-debtor may be the party against whom an order upon a claim in execution proceeding is made so as to be bound by the special rule of limitation prescribed for suits by such a party. Whether he is such a party or not must depend upon the facts of each ease. It is obvious that in some cases he could not be the 'party against whom an order on a clam,, is made, for the order may fee made without notice to him.

This view in Guruva v. Subbarayudu I.L.R.(1890) Mad. 366 has been followed in Muhuswami Mudaty v. Ayyalu Bathadu (1902) 13 M.L.J. 367 (c.f.' Appanna v. Appanna (1914) 1 L.W. 772 . The orders on the claim petitions do not therefore preclude the Official Receiver from raising the question of self-acquisition against the plaintiff.

4. The second contention raises a question of some difficulty. It is no doubt settled law that where a father in a joint Hindu family is adjudicated an insolvent, his share alone in the joint family property vests in the Official Receiver but not the share of the sons. It is also well settled that the power of a father to alienate his son's share for his debts which are neither illegal nor immoral would however vest in the Official Receiver, but the power is subject to the same qualifications as it is in the father's hands. Gopalakrishnayya v. Gopalan (1926) 54 M.L.J. 674 : I.L.R. Mad. 342 citing Sat Narain v. Beharilal (1924) 47 M.L.J. 857 : L.R. 52 IndAp 22 : I.L.R. 6 Lah. 1(P.C.). The power of a father to dispose of Ms son's share only subsists so long as the family continues joint but the power ceases when the family becomes divided. In Sat Narain v. Sri Kishen (1936) 71 M.L.J. 812 : 1936 L.R. 63 IndAp 384 : I.L.R. 17 Lah. 644 (P.C.) Lord Thankerton remarked as follows:

'The father's power of sale for his debts exists only so long as the joint family property is undivided and the capacity of the Official Assignee must be similarly limited.

It therefore follows that the father's power to sell would continue to subsist until division. The father's insolvency does not per se affect the undivided status and till the status is severed, the power would vest in the Official Assignee. Therefore while that status lasts, if an attachment of the son's share takes place, the question is, what is the effect of that attachment on the vesting of the said power in the Official Assignee? Before adjudication the attachment may be of the entire joint family property in execution of the decree against the father alone, The Official Receiver, Coimbatore v. Arunachalam Chettiar (1933) 66 M.L.J. 412 or in execution of a decree against the father and sons, Official Receiver, East Godavari v. Imperial Bank of India : (1935)69MLJ898 and Kanyaka Parameswaramma v. Venkataramayya : (1936)71MLJ294 , or of the son's share in execution of a decree against the son or after adjudication the attachment may be of the son's share alone, Arunachalam Chettiar v. Sabaratnam Chettiar : AIR1939Mad572 . In all these cases the view has been expressed that by reason of the attachment, the father's power of disposal of the son's share ceases and therefore there can be no vesting of this power in the Official Assignee or if there was vesting, he would be divested of it. The proposition is thus stated in Mayne's Hindu Law, at page 455 based on those cases:

When the son's interest in the family property has been attached in execution of any decree against him the power of the Official Assignee or Receiver to sell it for the payment Of the debts of the insolvent father is gone.

The question is to what extent this proposition can be said to be sound in principle? Section 64, Civil Procedure Code provides that where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein contrary to such attachment shall be void as against all claims enforceable under the attachment. If for any reason the attachment is withdrawn or released, the sale during the pendency of that attachment of the said property or interest would be valid. Therefore during the pendency of the attachment of the joint family property or the son's interest therein, should the father sell the son's share, as between the alienee and the father and the son, it would be perfectly valid though such an alienation would not avail against the attaching creditor. In Diravyam v. Veeranari : AIR1939Mad702 , Varadachariar, J., thus explained the 'true scope of Section 64, Civil Procedure Code, at page 863:

All that Section 64 of the Code provides is that any private transfer by the judgment-debtor of the property attached shall be void as against all claims enforceable under the attachment. It will not be accurate to read Section 64 as putting an end to the power of sale, because as between the transferor and the transferee, the alienation will undoubtedly be operative. If the attaching creditor is paid off or for any reason the attachment ceases to subsist, the alienee's title will be unassailable. The only effect of Section 64 is that such transfer shall not prejudice the rights of the attaching creditor.

In the course of the judgment he dissented from the observations of Chandavarkar, J., in Subraya v. Nagappa I.L.R.(1908) 33 Bom. 264 who took the view that the effect of the attachment was to deprive the father of the power of alienation of the son's interest in satisfaction of his own debt. I share the same view with Varadachariar, J., that Chandavarkar, J., has stated the proposition too broadly. The proposition would be correct if he had stated that the power of the father was deprived to the extent that it would not prevail against the claim under the attachment. The cases on which the proposition in Mayne is based are all cases where the question arose between the attaching creditor and the Official Receiver. (Vide the observations of Varadachariar, in Diravyam v. Veeranan : AIR1939Mad702 . As against the attaching creditor certainly the father's power would not prevail. But to say that once the attachment takes place the father's power is destroyed as stated by Madhavan Nair, J., in Official Receiver, Coimbatore V. Arunachalam Chettiar : AIR1931Mad118 , will be stating the proposition too broadly. I may also point out that the view taken by Madhavan Nair, J., was affirmed in the Official Receiver, Coimbatore v. Arunachalam Chettiar (1933) 66 M.L.J. 412 The same view was also taken in the Official Receiver, East Godavari v. Imperial Bank of India : (1935)69MLJ898 and by Pandrang Row, J., sitting alone in Subba Rao v. Official Receiver (1935) 42 L.W. 295 and by Venkataramana Rao, J., in Kanyaka Parameswaramma v. Venkatarramayya : (1936)71MLJ294 . It seems to me that so long as the family is undivided the power of the father to sell the son's share is not lost. The attachment of the son's interest may prevent the alienation taking effect as against the claims under the said attachment, and when a sale of that share is effected the power may be destroyed, but the power does not cease till the sale takes place. It would be open to the father to exercise the power of sale but the alienee would get a defeasible title as the alienation under the attachment would prevail. Therefore if the power of disposal subsisted, I do not see any reason why it could not vest in the Official Receiver subject to the same disabilities it was subject to in the father's hands at the date of vesting. During the pendency of the attachment, if the Official Receiver chooses to exercise the right of sale, the alienees will get a title which will prevail against the son though it may not prevail against the claims enforceable under the attachment, that is, if a sale takes place in pursuance of the attachment the purchaser under that sale will get an indefeasible title and the purchaser from the Official Receiver will not get any. In this case it will not be open to the alienee from the Official Receiver to resist the claim of the 16th defendant to bring the property to sale nor to contest the right of the purchaser under that sale, but the son would have no right against the alienee as his interest must be held to have been validly sold. This would be the correct legal position having regard to the rights of the father and the son in an undivided Hindu family taken in conjunction with Section 64 of the Civil Procedure Code. The earliest case in our Court is Gopalakrishnayya v. Gopalan (1926) 54 M.L.J. 674 : I.L.R. Mad. 342 where the question arose between an attaching creditor and the Official Receiver and what was decided in that case was that, as the son's share was attached by the creditor, the Official Receiver could not exercise the power of sale. In the Official Receiver, Coimbatore v. Arunachalam Chettiar (1933) 66 M.L.J. 412 which affirmed the decision of Madhavan Nair, J., the proposition was stated as enunciated in Mayne's book. In doing so, they purported to follow Subraya v. Nagappa I.L.R.(1908) 33 Bom. 264. The effect of that decision was stated in Official Receiver, East Godavari V. Imperial Bank of India : (1935)69MLJ898 , thus:

Once a decree has been followed by an attachment of the son's interest in the joint family property, the normal power of the manager of that property to alienate it for payment of debts from the moment of attachment ceases to be his right. Therefore the right in him having ceased, it cannot be transferred on his insolvency to the Official Receiver.

As I have already pointed out, these observations, if I may say so with respect, would not be correct in view of the true scope of Section 64, Civil Procedure Code as explained by Varadachariar, J., in Diravyam v. Veeranan : AIR1939Mad702 . In Arunaohdlam Chettiar v. Sabaratnam Chettiar : AIR1939Mad572 to which my learned brother was a party, the proposition was thus put at page 892,

The right to sell the son's, interest only exists so long as the son's interest in the family property exists. If the interest has been sold or if there has been a lawful attachment, which has the same effect, there exists no property over which the power can be exercised.

There can be no exception to the first part of the proposition that the right to sell the son's interest exists so long as the son's interest in the joint family property exists and it would cease the moment that interest had been sold; but the same effect would not follow from the attachment. Until the share is sold, the interest will subsist over which the power can be exercised subject to the disability imposed by Section 64, Civil Procedure Code though it will be prudent on the part of the Official Receiver not to exercise the power while the attachment subsists but to file a suit for partition and make the son's share available for the debts of the father after providing for the claims under the attachment. The decision in Paianiappa Chettiar v. Palani Goundan : AIR1936Mad948 was relied on. But the question there was as to the right of a creditor to attach and sell the son's share without the leave of the Insolvent Court and I held that it was open to the creditor to do so. I had not to consider in that case the precise question in issue in this case. It seems to me that the Official Receiver in spite of the attachment effected by the 16th defendant was competent to sell the plaintiff's interest and the plaintiff has no right to ask for any partition in view of the fact that his interests had been sold.

5. The result is that the appeals are allowed and the plaintiff's suit for partition so far as the items comprised in the said two appeals are concerned, is dismissed. This dismissal will in no way affect the rights of the respondents 4 and 5 under their attachment if they are subsisting. We allow costs in one appeal only, i.e., in Appeal No. 427 of 1938. The plaintiff-respondent will pay the costs to the appellants.

Somayya, J.

6. I agree with my learned brother. As pointed out by him in all the decisions on the point the contest was between the attaching decree-holder or persons claiming under the attachment on the one hand and the Official Receiver on the other hand. In such a case, the right of the former undoubtedly prevails.

7. But if as in the case before us, the attaching decree-holder does not bring the property to sale in pursuance of the attachment, why should the Official Receiver not exercise the power of the father for the benefit of the creditors, subject, of course, to any rights arising under the attachment? The attachment may leave a substantial surplus; property worth ten thousand may be attached for a decree for a thousand. In such a case, so long as the son has not become divided from the father, I do not see any reason why the Official Receiver standing in the place of the father should not sell the property. The son at any rate should, I think, be bound by the sale effected by the Official Receiver. The disability of the Official Receiver should be limited to a case where the question is between the Official Receiver and the attaching decree-holder or a person claiming under the attachment.


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