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Rakhal Chandra Purkait Vs. Sudhindra Nath Bose - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in(1919)ILR46Cal991
AppellantRakhal Chandra Purkait
RespondentSudhindra Nath Bose
Excerpt:
insolvency - adjudication, date of taking effect of--creditors, claims of--provincial insolvency act (iii of 1907), sections 16(6), 36. - .....or encumbrancer in good faith and for valuable consideration shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the receiver and may be annulled by the court.4. it is contended on behalf of the appellant that the transfer in the present case having been made more than two years before the date of the adjudication order, is not void against the receiver.5. section 16(6) of the provincial insolvency act, however, lays down that an order of adjudication shall relate back to and take effect from the date of the presentation of the petition on which it is made.6. it is contended that section 16(6) of the act does not affect any transfer made two years before the order of adjudication, but that the relation back has reference.....
Judgment:

Chatterjea and Panton, JJ.

1. This appeal is against an order of the District Judge of the 24 Perganahs under Section 36 of the Provincial Insolvency Act, by which he held that the alleged transfer of certain property made by an insolvent in favour of the appellant was void as against the Receiver.

2. The insolvent Braja Nath executed a deed of sale in favour of the appellant Rakhal on the 9th July 1913. Braja Nath applied to be declared insolvent on the 7th May 1915 and the order of adjudication was made on the 25th July 1915. The Receiver in insolvency applied to the District Judge on the 11th April, 1916, for avoiding the transfer. The learned District Judge held that the transfer was void having been made within two years before the date of the presentation of the petition for insolvency, and upon the evidence he found that the transfer was without consideration and did not pass any title to the appellant.

3. Now, Section 36 of the Provincial Insolvency Act lays down that any transfer of property not being a transfer made before and in consideration of marriage or made in favour of a purchaser or encumbrancer in good faith and for valuable consideration shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the Receiver and may be annulled by the Court.

4. It is contended on behalf of the appellant that the transfer in the present case having been made more than two years before the date of the adjudication order, is not void against the Receiver.

5. Section 16(6) of the Provincial Insolvency Act, however, lays down that an order of adjudication shall relate back to and take effect from the date of the presentation of the petition on which it is made.

6. It is contended that Section 16(6) of the Act does not affect any transfer made two years before the order of adjudication, but that the relation back has reference to other matters.

7. We are of opinion, however, that an order of adjudication relates back to, and takes effect from, the date of the presentation of the petition for the purpose of making the properties of the insolvent liable to the claims of the creditors. Under the English law, an order of adjudication relates back to, and takes effect from, the date of an act of insolvency but under the Indian Law [Section 16(6) of the Provincial Insolvency Act], an order of adjudication operates only from the day when the petition of insolvency is presented to the Court. It follows that from that time the property of the debtor is made available for payment of the debts. If the contention of the appellant were accepted, the provisions of the Act might be defeated in some cases. After the petition for insolvency is made, the order of adjudication may be delayed in some cases for more than two years, for instance where the matter goes up to the Privy Council on appeal, and in such a case any transfer made by the insolvent within two years before the date of presentation of the petition of insolvency, but more than two years before the order of adjudication would become valid. We do not think that such a result was contemplated, and we are of opinion that the provisions of Section 36 are to be read with Section 16(6) of the Act.

8. The next question is whether the learned Judge was right in his finding upon the evidence in the case.

9. It appears that the transfer was made by the insolvent in favour of his sister's son and it is found that notwithstanding the transfer, the insolvent was in possession of the property, and although it appears that the rent receipts stand in the name of his sister's son Rakhal, the insolvent mortgaged the property to a third person after the date of the transfer, and Rakhal himself was an attesting witness to the bond. Having regard to these facts and others mentioned in the judgment of the learned Judge, we think that his finding is correct.

10 The appeal must accordingly be dismissed with costs.


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