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Dasarathy Sinha Vs. Mahamulya Ash - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in60Ind.Cas.977
AppellantDasarathy Sinha
RespondentMahamulya Ash
Cases Referred and London and County Contracts Ltd. v. Tallack
Excerpt:
insolvency - bankrupt, undischarged, after-acquired property of, title to--stranger, right of, to dispute. - .....that joygopal's administrator had no title whatsoever to convey; that the title vested in the official assignee, and that, therefore, toe plaintiff's case should be dismissed without culling upon the defendant, the ground being that the title has been shown to be vested in some one else according to the plaintiff's evidence.4. i am going to consider this matter from two points of view. i am going to consider first, whether i ought, at this stage, to stop the case and dismiss the plaintiff's suit if the answer to that question 13 in the negative, i will then proceed to consider what amendment, if any, i ought to allow mr. avetoom's clients to introduce into their pleading.5. now, the section of the act of 1848 upon which the first question turns is section 7, and that section is one.....
Judgment:

Rankin, J.

1. This is a suit brought in February 1917 by Dasarathy Sinha, who claims to be entitled to an undivided eight annas interest in certain premises in Calcutta, known as, No. 21, Harodhone Lane. The plaintiff's claim is made on these lines. He says that these premises belonged at one time to a joint Hindu family of which Jitram Rakhit and Ramsabek Rakhit were the members. The plaintiff has sat out the various steps in his title, but these do rot concern the present question until we come down to a conveyance, dated the 1st December 1911, from one Srimanto Kumar Datt to one Joygopal Pal. It appears that Joygopal had a vesting order made against him on two occasions under the Indian Insolvency Ant, being the Imperial Statute 11 & 12 Victoria, Chapter 21 of 1848. According to the admissions made by the plaintiff's witnesses, and according to the original documents produced, the orders were made on the following dates, the first in the 2nd December 1899 and the second on the 4th May 1905. It appears that, in the case of neither insolvency, did Joygopal Pal get his final discharge, though in the first insolvency he got an order for his personal discharge on the 5th June 1900. After his death, namely, on the 25th August 1915, one Shahai Narain Pal took a conveyance of the premises in question from the administrator appointed by the Court to Joygopal Pal's estate. Shahai Narain Pal, according to the plaintiff's evidence, was a mere benamidar for himself, and it appears that on the 26th May 1916, he executed a deed of relinquishment to the plaintiff, thereby vesting in the plaintiff all the rights that accrued to the purchaser under the transaction of 25th Agust 1915.

2. The defendant is sued as a person in possession of an interest in the premises in question, and, according to the plaintiff's case, the defendant is a purchaser of the interest that at one time belonged to one Ram Sabek Rakhit and afterwards to his adopted son, Rajessur Rakhit. The issue in the case are, broadly speaking, the question whether the plaintiff can prove his title, and the question whether the plaintiff has been out of possession or the defendant in adverse possession for 12 years before the date of the institution of the suit.

3. The defense, so far as the allegations in the plaint are concerned, does not admit the various steps in title which the plaintiff has pleaded and it also raises the question whether the transactions were fictitious, but it does not in any way expressly refer to the fact of either of the two insolvencies of Joygopil Pal. Those insolvencies have apparently been brought to the notice of the defendant's advisers at a late stage, if not actually during the conduct of the plaintiff's case. In this state of things, at the end of the plaintiff's evidence and after he has dosed his case, Mr. Avetoom, for the defendant, takes the point that, in view of the fact of these insolvencies under the Act of 1848, it appears that Joygopal's administrator had no title whatsoever to convey; that the title vested in the Official Assignee, and that, therefore, toe plaintiff's case should be dismissed without culling upon the defendant, the ground being that the title has been shown to be vested in some one else according to the plaintiff's evidence.

4. I am going to consider this matter from two points of view. I am going to consider first, whether I ought, at this stage, to stop the case and dismiss the plaintiff's suit If the answer to that question 13 in the negative, I will then proceed to consider what amendment, if any, I ought to allow Mr. Avetoom's clients to introduce into their pleading.

5. Now, the section of the Act of 1848 upon which the first question turns is Section 7, and that section is one which runs upon very well known lines, or, more correctly, upon lines which, almost a hundred years ago, were very well-known in the Courts. The wording of it is as follows:

That upon filing of any snob petition as is aforesaid, it shall be lawful for the said Court and the said Court is hereby authorised and required to order that is the real and personal estate and effects of such petitioner, whether within the territorial within the limits of the Charter of the East India Company or without, except the wearing apparel.... and all debts due to him and all the future estate, right, title, interest and trust of the said petitioner in or to any real or personal estate or effects within or without the said territories which such petitioner may purchase, or which may revert, descend, be devised or bequeathed, or come to him, and all debts growing due to him before the Court shall have made its order in the nature of a certificate as hereinafter mentioned, do vest in the Official Assignee for the time being of the said Court, and that all books. in any way relating to such petitioner's estate and effects in his possession or under his custody or control, shall be deposited with such Assignee, and such order shall be entered of record in the said Court and such and shall instantly and without any conveyance or assignment, vest all the real and personal estate, effects, and debts as aforesaid and shall hold and stand possessed of the same for the purposes and in manner hereinafter mentioned.

6. It is quite true that, on the face of this section, what may be called 'after acquired property' is just as much, and apparently jest as quiokly, vested in the Official Assignee as is the property which belongs to an insolvent at the moment when the bankruptcy commences. The words shall instantly and without any conveyance or assignment' are directed to show that the older form of parties by which the Commissioner in Insolvency executed a deed of assignment in favour of Assignees is no long to obtain under this Act of 1848. There is no doubt, however, upon the authorities that, although on the face of this section, 'after-acquired property' and property acquired previous to insolvency appear to be on the same footing, there is in fact a substantial difference between the vesting in one case and the vesting in the other. That matter is now amply covered by authority, it is concluded by the authority, first of all, of the Privy Council in the case of Moses Kerakoose v. Benjamin Brooks 8 M.I.A. 339 : 4 W.R. 61 (P.C.) 1 Suth P.C.J. 426 : 1 Sar. P.C.J. 778 : 19 E.R. 559 and by later authority in the case of Kristommul Mitter v. Suresh Chunder Deb 8 C. 556 : 12 C.L.R. 253 : 4 Ind. Dec. (N.S.) 358, by the decision of Fatimabibi v. Fatimabibi 16 B. 452 : 8 Ind. Dec. (N.S.) 780 and the case of Rowlandson v. Champion 17 M. 21 : 6 Ind. Dec. (N.S.) 14. All these, cases agree in this that the reasoning laid down in England in the case of Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512, is applicable to the Act which I have now to construe. That being so, the first point which Mr. Bose taker is that, although in a case as between the Official Assignee or his assigns and the insolvent or some one claiming under him, as having acquired a right in 'after acquired property,' there may be a question whether the full doctrine, afterwards more precisely formulated by developed in the case of Cohen v. Mitchell 1890 : 25 Q.B.D. 262 at P. 266 : 59 L.J.Q.B. 409 : 63 L.T. 206 : 38 W.R. 551 : 7 Morrell 207, applies or does not apply to these transactions in Calcutta land, this much at all events is certain and is unchallenged by any case, tie, that it is not a defence which a stranger can take as against an insolvent or some one claiming under him, to say that the right in question was the after acquired property ' of an insolvent and is vested, in the Official Assignee unless he also can plead and prove that the Official Assignee has intervened. The case of Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512, which I have referred to, has apparently been some times thought to go the whole length afterwards covered by the decision of Cohen v. Mitchell 1890 : 25 Q.B.D. 262 at P. 266 : 59 L.J.Q.B. 409 : 63 L.T. 206 : 38 W.R. 551 : 7 Morrell 207. With that view I am not prepared to agree, but the exact point decided in Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512, is the point which Mr. Bose take's. Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512 was a decision as to the Validity of a demurrer. The defendant in that case had taken a plea, viz, Plea No, 7, alleging the proceedings in bankruptcy, the appointment of the Official Assignee, the fact that the estate did not produce nor has as yet produced sufficient to pay off the creditors; that the bill of exchange sued upon wag endorsed to the plaintiff and the cause or causes of action thereon accrued to him after the said signing and writing of the last certificate. In other words, what was pleaded in that the plaintiff was suing upon the after acquired right of an insolvent, and that the insolvent, having no rights of his own, could not maintain the action. Now, the exact decision of the Court upon that matter was that the insolvent had a good right except against the Assignees and that, as the plea did not state that they had interfered, it did not contain a complete defence. In other words, the Official Assignee himself and, of course, an assign from him may dispute the title which an insolvent has, or has purported to give, to his after-acquired property; no stranger may dispute that title except upon condition that he allege and prove that the offical Assignee has intervened.

7. Now, that question is an entirely different question to the one which arises in connection with the doctrine of Cohen v. Mitchell 1980 : 25 Q.B.D. 262 at.P. 266 : 59 L.J.Q.B. 409 : 63 L.T. 206 : 38 W.R. 551 : 7 Morrell 207. In connection with that doctrine the questions that arise are, whether, at the time when the insolvent purported to give the right, the Official Assignee had intervened or not, and whether the purchaser from the insolvent took for value and in good faith. It may or may not be either in England or in India, that certain interests in land are not within the Scope of the doctrine of Cohen v. Mitchell 1890 : 25 Q.B.D. 262 at.P. 266 : 59 L.J.Q.B. 409 : 63 L.T. 206 : 38 W.R. 551 : 7 Morrell 207. To my mind, It is another propjsition and one unsupported, so far as I know, by auy authority, to say that the narrower rule in Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512 is subject to any exception in the case of land, In order that the rights given by the Statute in after-acquired properly shall enure to creditors only and shall not be used by strangers to enlarge their own rights, any mere third person desiring to bad the bankruptcy as a defect in the title which an insolvent has purported to give to some one else in his after acquired property, must show that the Official Assignee has intervened. There may be think there are other reasons for preventing this very special kind of just tertii from being made to serve the ends of a stranger even in actions to which just tertii is in general a defence. But the reason stated applies to interest in land as fully as to any other interests; though it may well be that the reasons given in New Land Development Association and Gray, In re (1892) 2 Ch. 138 : 61 L.J.Ch. 323 : 13 L.T. 404 : 40 W.R. 295 for exempting certain interests in realty from the wider doctrine of Oohen v. Mitchell 1890 : 25 Q.B.D. 262 at.P. 266 : 59 L.J.Q.B. 409 : 63 L.T. 206 : 38 W.R. 551 : 7 Morrell 207 were well-founded, The scope of that exemption has since been narrowed: Clayton and Barclay's Contract, In re (1895) 2 Ch. 212 : 64 L.J. Ch. 615 : 13 R. 556 : 72 L.T. 764 : 43 W.R. 549 : 2 Monson 345 : 59 L.P. 489, Rent County Gas Light and Koke Co Ltd, In re (1909) 2 Ch. 195 P. 201 : 78 L.J. Ch. 625 : 100 L.T. 983 : 16 Monson 185 and its principle doubted Official Receiver v, Cooke (1906) 2 Ch. 661 : 75 L.J. Ch. 757 : 13 Monson 337 the exemption has finally been abolished by Statute so far as England is concerned. But, for my purpose, and with reference to the authorities binding upon me, the important thing to notice is that in no one of the cases has the rule in Herbert v. Sayer (1844) 5 Q.B. 965 : 2 D. and L. 49 : 13 L.J.Q.B. 209 : 8 Jur. 812 : D. and Mer. 723 : 114 E.R. 1512 been relaxed, Rcwlandion v. Champion 17 M. 21 : 6 Ind. Dec. (N.S.) 780 Bird v. Philpott (1900) 1 Ch. 822 : 69 L.J. Ch. 487 : 82 L.T. 110 : 7 Monson 251, Official Receiver v. Cooke (1906) 2 Ch. 661 : 75 L.J. Ch. 757 : 13 Monson 337 and London and County Contracts Ltd. v. Tallack (1903) 51 W.R. 408 : 19 T.L.R. 159 are cases where the Official Assignee or a purchaser from him was one of the parties. On the first point, and for these reasons, it seeme to me that it would be wrong of me to dismiss the plaintiff's aotion at the end of his evidence. I treat this for the moment not as a matter of pleading but as a matter of proof. There is not only no pleading before me, but there is no proof before me, that, at the date when this action was brought or indeed at any other date, the Official Assignee, in respect of this property, No. 21, Harodhone Lane, had ever intervened at all. That being so, I cannot stop the case at the end of the plaintiff's evidence, and I cannot now dismiss the action.

8. The action, therefore, must go on, and I have to consider Mr. Avetoom's application for leave to amend, and it is necessary for me to make up my mind as to what leave I propose to give. What I propose to do in that matter is this: I shall alley Mr. Avetoom by an amendment to raise the fact of each of those two insolvencies, I shall allow him also to aver and give him an opportunity of proving, if he can, that at any date down to the date of the bringing of this action, the Official Assignee Lad intervened, that will not allow any amendment which alleges an intervention by the Official Assignee after the date on which this plaint was filed. My reason for that is, that if it is open still to the Official Assignee to claim the benefit of any judgment which the plaintiff may recover in this action, it is much better that that should be done in separate proceedings, and it may or may not be done in the Insolvency Court, but any such claim as that I am going to keep out of this action, It may well be that as between the plaintiff and the Official Assignee there are by this time many complicated questions. While I shall allow these defendants to allege specifically and found upon any intervention by the Official Assignee, before action brought, I am not going to allow this suit to be differed by anything that the Official Assignee might do for the first time now. On those terms, if Mr. Avetoom's client produces in writing the amendment to the written statement which he proposes to make, I shall allow it. So far as the plaintiff is concerned, if there are any matters which require specific pleading after that, I shall be able to deal with that question later.


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