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Phani Bhusan Basu and ors. Vs. Shashi Bhusan Maity - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1935Cal391
AppellantPhani Bhusan Basu and ors.
RespondentShashi Bhusan Maity
Cases ReferredTatireddi v. Ramachandra Rao
Excerpt:
- .....at the instance of the insolvent whose properties had at the time of the application vested in the receiver in insolvency2. the question of the right of the insolvent, the appellant in this court to make the application as aforesaid, was decided against him by the court in which the sale was held. on appeal, the decision of the primary court was reversed by the learned district judge of midnapur. in our judgment the decision of the court of appeal below cannot be supported either on principle or by authority. the property of the insolvent having vested in the receiver, after such a receiver had been appointed by the insolvency court, the receiver completely represented the insolvent under the law, in respect of his properties and the insolvent has no locus standi to maintain the.....
Judgment:

1. This appeal has arisen out of an application made by an insolvent purported to have been made under Section 28(2) Prov. Ins. Act, for having it declared that a sale in execution of a decree was void, on the ground that the sale having taken place without the leave of the insolvency Court, could not be allowed to stand. There is no question that the order of adjudication under the Provincial Insolvency Act was passed on 22nd April 1933, and the order related back to the date of the presentation of the petition for insolvency, on 21st November 1930, and as such the order of adjudication must be taken to have been in force when the sale in question took place on 15th March 1932. The only point for consideration in the case before us therefore is whether the application before the Court with the prayer for declaration that the sale held on 15th March 1932 was void was maintainable, at the instance of the insolvent whose properties had at the time of the application vested in the receiver in insolvency

2. The question of the right of the insolvent, the appellant in this Court to make the application as aforesaid, was decided against him by the Court in which the sale was held. On appeal, the decision of the primary Court was reversed by the learned District Judge of Midnapur. In our judgment the decision of the Court of appeal below cannot be supported either on principle or by authority. The property of the insolvent having vested in the receiver, after such a receiver had been appointed by the insolvency Court, the receiver completely represented the insolvent under the law, in respect of his properties and the insolvent has no locus standi to maintain the application filed by him in Court. The law on the subject appears to be sufficiently clear, regard being had to the provisions contained in the Provincial Insolvency Act, bearing upon the question of vesting of proportion of an insolvent after an adjudication order has been made by the insolvency Court, and there is no provision contained in the statute, which might be deemed to have conferred any locus standi on the insolvent, to bring an action of the present description. It may be noticed in this connexion that in a decision of this Court in which the English practice and procedure under the English Bankruptcy Act 1914, was reviewed, the bankrupt was held to have no locus standi to be retained as a defendant in a suit, after his properties had vested in the trustee in bankruptcy: see Prince Victor N. Narain v. Bhairabendra Narayan Deb 1930 Cal 388.

3. The position that appears to be sound in law, applicable to the facts of the case before us, and the principle underlying the same were clearly indicated in the case of Banamali Dutt v. Lalit Mohan Ghosal 1919 Cal 1006, where it was held by this Court that a judgment-debtor who has been adjudicated an insolvent, had no right to maintain an appeal against a decision in execution, after his properties had vested in the Official Receiver; and it finds support also from the decisions of other High Courts in India (see in this connexion Bhagawan Das v. Amritsar National Bank 1928 Lah 675, Kala v. Assa Jalal 1916 Sind 20, Sakhawat Ali v. Radha Mohan 1919 All 284 and Hari Rao v. Official Assignee 1926 Mad 556. The decision of the Madras High Court in the case of Tatireddi v. Ramachandra Rao 1921 Mad 402 was cited before us in the course of argument, on the side of the respondent in this Court, in which it was observed by the learned Judges deciding the case, that an insolvent after an order of adjudication had been made, was not disqualified, by reason of his insolvency, from appealing from an order refusing to set aside a sale. It appears that Spencer, J., in the course of his judgment in the case, expressed the opinion that it was the property of the insolvent which became vested in a receiver. The learned Judge added:

There were no words in the statute which might be read as making insolvency equivalent to civil death of the individual and taking away his common law rights of action

4. According to the learned Judge

for protecting the right of the creditors in an insolvent's property, the receiver might appropriately be joined as party, but that it did not follow from that, that the insolvent had no locus standi in civil proceedings of any kind.

5. In our judgment, the observations to which reference has been made above are not in consonance with the approved view of the law applicable to the subject, regard being had to the provisions contained in the Provincial Insolvency Act, relating to the vesting of properties of an insolvent in the Court or the receiver, after the order of adjudication has been made by the Court; and the observations are not also in line with the approved view of the law, as taken by the different High Courts in this country and in England, in regard to the effect of vesting of properties of an insolvent in the receiver in insolvency. The question was not whether there was the civil death of the insolvent, after an order of adjudication had been made by the insolvency Court, but whether the insolvent could be held to have any right in himself to bring any action before the Court, after his properties had vested in the receiver. That question as has already been indicated above, must, in our judgment, be answered in the negative, against the insolvent. The result of the conclusion we have arrived at, as mentioned above, is that this appeal must be allowed, and the order passed by the Court of appeal below set aside, and we direct accordingly. The appeal is allowed; the order-appealed from is discharged, and the decision and order passed by the Subordinate Judge on 19th July 1933, is restored. The appellant is entitled to get his costs in this appeal and his costs in the Courts below. The hearing fee in this Court is fixed at two gold mohurs. In view of the above order in the appeal, the application in revision is not pressed.


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