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Hridaykrishna Adya Vs. Osmanali Mandal - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata
Decided On
Reported inAIR1932Cal151,136Ind.Cas.143
AppellantHridaykrishna Adya
RespondentOsmanali Mandal
Excerpt:
- 1. this appeal raises a question under section 53, provincial insolvency act. the matter has arisen under the following circumstances. one lehajuddin jamadar was adjudicated an insolvent under the provincial insolvency act, on 5th july 1927. subsequently by an order made by the insolvency court, a receiver was appointed to take charge of the properties belonging to the insolvent, the receiver was asked to investigate whether the insolvent had got any immovable properties. the attention of the receiver was drawn to the fact that the insolvent had conveyed certain immovable properties to one osmanali mandal on 26th may 1926, that is, on a data which was within two years of the date of adjudication of the insolvent as such. the receiver made an investigation and submitted a report to the.....
Judgment:

1. This appeal raises a question under Section 53, Provincial Insolvency Act. The matter has arisen under the following circumstances. One Lehajuddin Jamadar was adjudicated an insolvent under the Provincial Insolvency Act, on 5th July 1927. Subsequently by an order made by the insolvency Court, a receiver was appointed to take charge of the properties belonging to the insolvent, The receiver was asked to investigate whether the insolvent had got any immovable properties. The attention of the receiver was drawn to the fact that the insolvent had conveyed certain immovable properties to one Osmanali Mandal on 26th May 1926, that is, on a data which was within two years of the date of adjudication of the insolvent as such. The receiver made an investigation and submitted a report to the insolvency Court. His report wag to the effect that the transfer in favour of Osmanali Mandal was not in good faith nor for valuable consideration. Ha accordingly prayed to the insolvency Court that the said transfer might be annulled under the provisions of Section 53, Provincial Insolvency Act. It appears that the receiver had taken the statements of various people who appeared before him. The matter, having come before the insolvency Court, under these-circumstances, the question arose whether that Court could take action under Section 53, go into the matter for itself and come to a determination on the point as to whether or not the transfer in favour of Osmanali Mandal was in good faith and for valuable consideration. On that point it was obvious that the insolvency Court had to take evidence; but it did not take evidence, but was content with the report of the receiver and the statements of the parties who had appeared before the receiver. No evidence in the legal sense of the term was taken by the insolvency Court. The Court came to the conclusion that an order under Section 53 of the Act being of a summary character it was not desirable in the circumstances to make such an order. But he referred the receiver to the civil Court for determination by means of a suit of the question or questions raised in his report. It is against this order of the insolvency Court, which is dated 14th June 1929, that the present appeal has been directed.

2. Our attention has been drawn to the circumstances under which the order in question came to be made and Section 53, Provincial Insolvency Act, has been contrasted with Section 55, Presidency Towns Insolvency Act. It is clear from the records before us that if the question had to be determined by the insolvency Court under the Provincial Insolvency Act, such investigation has not been done. On the other hand, it is equally clear that if according to the language of Section 53, Provincial Insolvency Act, it is open to the insolvency Court to decline jurisdiction and to refer the parties to a civil Court for determination of the matter in issue, then what has been done by the insolvency Court is one which it was competent to do and to which no exception can be taken. The question therefore is whether the insolvency Court, under the Provincial Insolvency Act, is the only Court which can determine the question raised in the section or whether any other Court has jurisdiction to go into the matter.

3. Mr. Panchanan Ghose, who has appeared for the transferee, contends that, according to the decisions in England based on a section which is more or less identical with Section 56, Presidency Towns Insolvency Act, the insolvency Court is not the only forum which has seisin of matters such as are referred to in Section 55, Presidency Towns Insolvency Act. That is no doubt true, as far as the decisions go at the present moment; but, there is a significant change in the terms of Section 53, Provincial Insolvency Act, and it has been held in several cases decided in India that under the Provincial Insolvency Act, the insolvency Court is the only Court which has jurisdiction in the matter to go into the questions raised under Section 53, Provincial Insolvency Act, and decide the same and that the parties should not be referred to the civil Court for determination of such questions: see! in this connexion the cases collected in Sir Dinshab Mulla's book on Insolvency at pp. 48, 49, 429 and 430. Therefore the view which has found favour in India, is that the insolvency Court under the terms of the Provincial Insolvency Act, is the only appropriate tribunal which can determine the question raised under Section 53 of the Act and we are in agreement with this view.

4. In that view of the matter, the question arises whether such determination: has taken place in this case. The learned Additional District Judge has not come to any decision, He has referred no doubt to various circumstances, giving perhaps an idea of the inclination of his mind, but he has not, as stated above come to any decision, he having been content with expressing an opinion that it was a summary order which was prayed for and that he was not willing to make such a summary order. That obviously having regard to what has been stated above is wrong and therefore the conclusion we have come to is that the report of the receiver in insolvency should be treated as an application for action under Section 53, Provincial Insolvency Act and that the matter has got to be investigated in evidence to be produced in Court. If the evidence does not satisfy the Court that the transaction in question can be successfully impeached, having regard to the language of Section 53, then obviously the transferee must be held to have acquired a valid title to the properties conveyed by the deed of transfer. If on the other hand, the evidence does not satisfy the Court that the transfer Cannot be questioned, then it will be for the Court to determine whether such transfer, in the circumstances of this case should be annulled by the Court. We desire to express no opinion. We have only indicated what should be done.

5. Therefore the conclusion is that the matter should be remitted to the Court of the Additional District Judge at Howra sitting in insolvency and the matter must be investigated afresh on evidence to be produced in Court.

6. Mr. Ghose points out that certain transactions took place, which were beyond the limit of two years from the date of adjudication. These and various other circumstances will no doubt be brought to the notice of 'the learned Judge. But having regard to the terms of the order, we prefer not to go into the merits ourselves, but will leave the matter to be tried out afresh on lines indicated above by the learned Additional District Judge of Howrah sitting in insolvency.

7. The costs of this appeal will abide the result. We assess the hearing fee at three gold mohurs.


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