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In Re: Mirja Md. Masrur Ali Khan - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1942Cal150
AppellantIn Re: Mirja Md. Masrur Ali Khan
Excerpt:
- .....rs. 36,788- as unsecured liabilities. the balance now standing to his credit in the hands of the official assignee is rs. 219-5-3. not having applied for his discharge, the adjudication was annulled on 23rd july 1928, more than 12 years ago, and an order was made by the registrar in the following terms, namely, 'annulled. the assets to remain in the hands of the o/a subject to the further order of the court.' this order was not completed and filed by the official assignee until 4th december 1940. the official assignee has discovered recently that the debtor owns a fractional share amounting to l9/576ths in a property known as the dhalbhum mining estate at dhalbhum in the district of singhbhum which he failed to disclose in his schedule. he asks therefore that the debtor be ordered to.....
Judgment:
ORDER

Lort-Williams, J.

1. In this petition of the Official Assignee of Calcutta he states that the debtor was adjudicated insolvent on his own petition on 17th September 1923, more than 17 years ago, and filed his schedule of affairs on 18th December 1923 showing Rs. 36,788- as unsecured liabilities. The balance now standing to his credit in the hands of the Official Assignee is Rs. 219-5-3. Not having applied for his discharge, the adjudication was annulled on 23rd July 1928, more than 12 years ago, and an order was made by the Registrar in the following terms, namely, 'Annulled. The assets to remain in the hands of the O/A subject to the further order of the Court.' This order was not completed and filed by the Official Assignee until 4th December 1940. The Official Assignee has discovered recently that the debtor owns a fractional share amounting to l9/576ths in a property known as the Dhalbhum Mining Estate at Dhalbhum in the District of Singhbhum which he failed to disclose in his schedule. He asks therefore that the debtor be ordered to amend his schedule of affairs accordingly, and that he may be given liberty to sell the debtor's interest and declare and distribute a dividend.

2. In his affidavit the debtor states that of the creditors shown in his schedule only Allenbery & Co., for Rs. 1170 and Aga Wasik Ali for Rs. 2150 have proved their claims, and one other has submitted a proof for J Rs. 258 which is challenged. He says that the Dhalbhum Estate was and is still in the hands of a Receiver appointed in a suit in this Court, protracted litigation is still pending, and there are claims against the estate to the extent of over four lakhs of rupees. In these circumstances the then Official Assignee Mr. Faulkner told him that in view of the litigation and that his share would be worth only Rs. 1000 or Rs. 1500 he did not claim the property, from which the debtor has not received anything up to date. He sold his share for Rupees 1500 to Mr. J.C. Galstaun on 22nd November 1938, and after j paying the costs of assignment, etc., received Rs. 1200 in settlement.

3. Section 17, Presidency Towns Insolvency Act, provides that upon adjudication the property of the insolvent shall vest in the Official Assignee. Section 23 (1) provides that where an adjudication is annulled all sales and dispositions of property and payments duly made, and all acts therefore done by the Official Assignee or other person acting under his authority or by the Court shall be valid, but the property of the debtor who was adjudicated insolvent shall vest in such person as the Court may appoint or, in default of any such appointment, shall revert to the ' debtor to the extent of his right or interest therein on such terms and subject to such conditions (if any) as the Court may declare by order. It is clear therefore that the effect of the annulment is to divest the Official Assignee of the debtor's property, which reverts to the debtor unless the Court by order appoints some one in whom it shall vest, not necessarily the Official Assignee. The order made on 23rd July 1928 was not in terms such an order. The Registrar did not appoint any one in whom the property should vest. He merely directed that the assets should remain in the hands of the Official Assignee subject to the further order of the Court. Subject to this condition they reverted to the debtor on the annulment. Generally speaking the effect of annulment is to put creditors back in their original position. They can again file or proceed with suits, and execute decrees by means of imprisonment of the debtor or otherwise.

4. For this purpose, the Court may recommit the debtor to his former custody and thereupon all processes which were in force against him shall be deemed to be still in force as if he had never been released--S. 23 (2). Notice of annulment must be published in the Gazettes. Pending the taking of such steps, it may well be that the Court will think it desirable to make an order to keep the assets in the hands of its officer, for the time being. But that is very different both in terms and in intention from an order vesting the assets in the Official Assignee or appointing the Official Assignee as the person in whom they shall vest and so preventing them from reverting to the debtor under the provisions of the section. The effect of annulment in this section is clearly intended to be different from that in Section 18A which provides that upon annulment by the High Court of the order of a Subordinate Court the debtor's property shall vest in the Official Assignee and the Court may give directions for its custody.

5. Where it is intended, as in the latter section, that the assets shall vest in the Official Assignee, this is stated specifically. Where, as in Section 23 the vesting of the property is intended to be left to the discretion of the Court, the order of the Court should be stated in clear and explicit terms. The expression 'remain in the hands' cannot have meant ' remain vested in the hands,' because on annulment the assets ceased to be so vested and therefore could no longer 'remain'. For, the same reason it is necessary for the section to provide, as it does, that they 'shall' vest, if a proper order of appointment is made. If, again, it was intended to appoint the Official Assignee as the person in whom the property should 'vest', there was no necessity to add the condition 'subject to the further order of the Court.' The section provides for terms and conditions to be applied only to the debtor on reversion -- otherwise no conditions are necessary. The effect of the order was that the property of the debtor reverted to him, but on condition that the assets already in the hands of the Official Assignee were to remain in his hands subject to the further order of the Court. The share in question was neither in his hands nor vested e in him and therefore was not affected by the order. This petition therefore must be dismissed with costs, limited to the assets in the hands of the Official Assignee.


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