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Aniruddha Mitra Vs. Official Receiver, Alipur Judge's Court and Ors. (27.08.1941 - CALHC) - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata
Decided On
Reported inAIR1942Cal241
AppellantAniruddha Mitra
RespondentOfficial Receiver, Alipur Judge's Court and Ors.
Cases ReferredTara Sundari Debi v. Sarada Charan
Excerpt:
- .....the proceedings in suit. they are not in any sense monies given to the applicants by virtue of any right to maintenance the applicant possessed. it was simply a gift made by the testator in their favour from the testator's bounty and therefore they must be taken as annuities which the applicants are entitled to deal with by way of charge, transfer or assignment and as such are attachable under section 266.'6. according to this view, the right to maintenance in order to be unassignable in law must be based on the personal law of the parties, or the relationship between the grantor and the grantee; and unless the grantee has a legal right to be maintained by the grantor according to the personal law by which they are governed, right to such maintenance can be transferred. the result is.....
Judgment:

B.K. Mukherjea, J.

1. This appeal is directed against a judgment of the District Judge, 24 Par ganas dated 4th July 1939 passed in exercise of insolvency jurisdiction, in a proceeding under Sections 4 and 53, Provincial Insolvency Act. The material facts are not in controversy and may be shortly stated as follows : Rai Behari Lal Mitter Bahadur, the father of the appellant, was a wealthy resident of this city, and he died on 7th February 1933 leaving behind him a will which was executed on 5th July 1932. Under this will, the appellant Aniruddha, who was the only son of the testator, was given nothing else, but an allowance of Rs. 700 per month for his maintenance during the period of his natural life. Similar allowances were given to the wife and daughter-in-law of the testator, and after giving a large annuity to the University of Calcutta, the will directed that the residue of the estate was to go to the son or sons of Aniruddha, either natural born or adopted when they would arrive at the age of 21. Failing such sons, the entire estate would go to the University of Calcutta, to be applied for certain purposes specified in the will. Aniruddha, it appears, led a very fast life, and incurred debts to a considerable extent soon after his father's death. On 5th May 1934, he executed a mortgage in favour of respondent 3 by which he hypothecated his right to a portion of his maintenance allowance given to him by his father's will amounting to Rs. 450 a month as security for an advance of Rs. 17,000 only. On 12th September 1934 he created another mortgage in favour of respondent 2 by which, to secure a loan of Rs. 28,000, he mortgaged, amongst other properties, his right to the balance of the maintenance allowance.

2. On 11th May 1936, he filed a petition for insolvency, and the adjudication order was made on 24th of August following. On 20th February 1939, the Official Receiver in whom the estate of the insolvent vested, started a proceeding under Sections 4 and 53, Provincial Insolvency Act, for a declaration that the two mortgages mentioned above were illegal and void and were liable to be annulled inter alia on the ground that a right to future maintenance was not alienable in law under Section 6(dd), T.P. Act. An issue was raised on this point, which was heard as a preliminary issue by a District Judge and by his order dated 4th July 1931, the learned Judge decided this point in favour of the mortgagees and held that the transfers in dispute did not come within the mischief of Section 6(dd), T.P. Act. This order was not challenged by the receiver, but the insolvent has come up against it by way of appeal to this Court. A preliminary objection has been raised on behalf of respondents 2 and 3, that no appeal lies against the order of the District Judge at the instance of the insolvent who can have no locus standi in a proceeding under Section 4 or Section 53, Provincial Insolvency Act. Under Section 75 (2), Provincial Insolvency Act, the debtor, any creditor, the receiver or any other person aggrieved by a decision or order of a District Court as is specified in Schedule 1, come to or made otherwise than in appeal from an order made by a subordinate Court may appeal to the High Court. The order complained of, undoubtedly decided a question of title under Section 4, Provincial Insolvency Act, and hence comes within the category of appealable orders, as enumerated in Schedule 1 to the Act. Section 75 expressly mentions the 'debtor' as a person competent to appeal, though it is well settled that he can appeal only if he is aggrieved by the order of the District Judge and not otherwise.

3. The whole point for our consideration, therefore, is whether the insolvent can be said to be lawfully aggrieved by the order of the District Judge against which this appeal is directed. The meaning to be given to the words 'person aggrieved' in connexion with administration of Bankruptcy laws has been discussed in several cases both in England and India. One of the leading cases on this point is Ex parte Sidebotham; In re Sidebotham Ex parte sidebotham; In re sidebotham (1880) 14 Ch. D. 458. It was held there by James L.J. that a person aggrieved must be a person who had suffered a legal grievance; the act or decision complained of must have deprived him of something to which he was lawfully entitled or he must be refused something which he had a right to demand. The words do not mean a man who is disappointed of a benefit, which he might have-received if some other order had been passed. Thus, although an insolvent is entitled to the surplus that remains after the sale of his properties, yet it is not a legal right but a mere hope or expectation; and enormous mischief would result if a bankrupt was allowed to interfere with the administration of his estate on the contingent chance of acquiring more surplus : vide Ex parte Sheffield; In re Austin (1879) 10 Ch. D. 434. In re Lead bitter (1879) 10 Ch. D. 388. In the last-mentioned case the bankrupt after his discharge applied under Section 39, Solicitor's Act, for taxation of a bill of costs to be paid by the trustee in bankruptcy to the solicitor of a mortgagee of the bankrupt. It was held by Sir George Jessel that the bankrupt was not a person interested in the property within the meaning of Section 39, Solicitor's Act. These cases have been followed in India, and reference may be made amongst 'others to the decisions in Hari Rao v. Official Assignee of Madras : AIR1926Mad556 and Sakhawat Ali v. Radha. Mohan Sakhawat Ali v. Radha Mohan ('19) 6 A.I.R. 1919 All. 284.

4. It has been argued by the mortgagees in the present case, that as under Section 28, Provincial Insolvency-Act, all the properties of the insolvent vested in the receiver, the insolvent could not be said to be legally interested in the result of a proceeding under Section 4, Provincial Insolvency Act. The argument indeed is perfectly sound, for the insolvent cannot have any locus standi in a dispute between the receiver on the one hand, and the transferees on the other, and he cannot be heard to say that if the transfers were annulled and the properties applied for the benefit of the general creditors, he would have had a chance of obtaining a larger surplus, after the insolvency proceedings were at an end. The position which the-insolvent takes up in the present case is, however, entirely different. What he says is this: that if the decision of the Court below had been otherwise and the right to the monthly allowances, that had not accrued due already was held to be inassignable in law, then not only would the mortgages be rendered inoperative but all future allowances as would be payable to him after he obtains his discharge would not vest in the receiver at all under Section 28(5), Provincial Insolvency Act. The receiver himself would not be entitled to sell the insolvent's right to future maintenance for the benefit of his creditors, such rights being unattachable under Section 60(1)(n), Civil P.C. This is not really hampering the administration of his estate on the off-chance of obtaining a surplus. A question is raised which is of vital importance to the insolvent, viz., to what extent the monthly allowances, to which he is entitled under his father's will would vest in the receiver under Section 28, Provincial Insolvency Act. We think that in these circumstances the insolvent can be said to be a party aggrieved by the order of the District Judge, and this appeal cannot be thrown out on the preliminary point. In any event, an appeal would lie with the leave of this Court; and we would be prepared to grant such leave, if it was necessary.

5. Coming now to the merits of the appeal, the question that requires consideration is as to whether the insolvent's right to the monthly allowance of Es. 700 under the will of his father as had not accrued due already, could be assigned by way of mortgage, in view of the provisions of Section 6(dd), T.P. Act. The Court below is of opinion that the amount payable to the insolvent under his father's will was in the nature of an annuity, not of future maintenance, within the meaning of Section 6(dd), T.P. Act, and in support of this reliance has been placed on a decision of Sale J. in Gopal Lal Seal v. F.J. Marsden ('06) 10 C.W.N. 1102. In that case a question arose as to whether a certain sum of money payable to the applicants as monthly allowances under the will of their maternal grand father could be attached under a prohibitory order. Sale J. answered this question in the affirmative and held that Section 266, Civil Procedure Code, (which corresponds to Section 60(1)(n) of the present Code) was not applicable to a grant of this description. 'The gift in question' so runs the judgment 'was a gift to the sons of the daughter of the testator and is described in the will as a monthly allowance, and is treated as such in the proceedings in suit. They are not in any sense monies given to the applicants by virtue of any right to maintenance the applicant possessed. It was simply a gift made by the testator in their favour from the testator's bounty and therefore they must be taken as annuities which the applicants are entitled to deal with by way of charge, transfer or assignment and as such are attachable under Section 266.'

6. According to this view, the right to maintenance in order to be unassignable in law must be based on the personal law of the parties, or the relationship between the grantor and the grantee; and unless the grantee has a legal right to be maintained by the grantor according to the personal law by which they are governed, right to such maintenance can be transferred. The result is that where the allowance is given as a matter of favour out of the bounty of the grantor, or is the result of a contractual agreement between the parties, the provision of Section 6 (dd) T.P. Act, would not apply. In our opinion, this would be attaching a very much restricted meaning to the plain words of the section. The policy of the law undoubtedly is to interdict alienation, of what is intended to be given for the personal enjoyment of the grantee. It is not proper that in such cases the grantee should starve whereas the property which was intended to be enjoyed by him personally should be held by a stranger.

7. But we cannot say that there could not be a maintenance grant unless there was an antecedent obligation on the grantor to maintain the grantee under the personal law of the parties. Whatever doubts might have existed on this point are now removed by the clear words of Section 6 (dd), T.P. Act, (which was introduced by the amending Act of 1929) which says that a right to future maintenance in whatsoever manner arising, secured or determined cannot be transferred. If the right is only to arise under settled personal laws, these words would be altogether Unnecessary. The expression 'in whatsoever manner arising' certainly refers to the way in which the right is created and not merely evidenced. This view is supported by the decision of the Privy Council in Rajendra Narain Singh v. Mt. Sundar Bibi . In this case certain villages had been conveyed to a judgment-debtor without power of transfer during the life time of the grantor in order that he. should possess and enjoy the same thereof in lieu of maintenance. It was held by their Lordships of the Judicial Committee that the debtors' interest was neither attachable nor saleable under Section 60 (1)(n), Civil P.C. This decision was in 1925 and Clause (dd) of Section 6, T.P. Act, which was introduced in 1929 was quite in conformity with this decision. It is true that there is a distinction between a maintenance allowance and an annuity; and whether an allowance is the one or the other may depend upon the facts of each case : vide Subraya v. Krishna ('24) 11 A.I.R. 1924 Mad 22. Altap Begam v. Brij Narain : AIR1929All281 . Tara Sundari Debi v. Sarada Charan ('10) 12 C.L.J. 146. In the present case, we have no doubt that the sum of Rs. 700 a month which was given to the appellant was nothing else but a maintenance grant. The testator had vast properties and he practically disinherited his son, giving him only so much as was necessary for his maintenance. The provisions for maintenance of the testator's wife and daughter-in-law occur in the same paragraph, and are couched in identical language. The appellant, it appears, was an adopted son of the testator, and the testator might have thought that even though he was disinheriting his adopted son he had a moral duty to maintain him.

8. Our conclusion therefore is that the right of the insolvent to the allowance of Rs. 700 a month was a right to maintenance, and the monies that had not accrued due at the date of transfer, were not assignable in law. The mortgages therefore must be held to be inoperative. The monies as they accrued due would undoubtedly come to the receiver till the insolvent gets his discharge. It would be certainly open to the insolvency Court to attach a condition to the order of discharge that the insolvent would subscribe some part of his allowance for the benefit of his creditors. The appeal is thus allowed and the order of the District Judge is set aside. There will be no order as to costs. It will be open to the insolvent, if he is so advised, to apply to the Insolvency Court for giving him such allowance for the support of himself or his family as the Court considers proper. It will also be open to the mortgagees to surrender their securities and rank as ordinary creditors.

Roxburgh, J.

9. I agree.


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