Sita Ram v. B. Jado Rai

Mears, C.J:— This is an appeal under Section 75 of the Provincial Insolvency Act, from an appellate order of the District Judge of Agra, dated 15th December 1930, confirming an order of the Judge of Small Causes, dated 21st March 1930, in certain proceedings relating to one Earn Prasad, insolvent.

2. One Girdhari Lal had four sons two of whom are Basanti Lal and Shambhunath. The names of the two others cannot be gathered from the papers before us. Basanti Lal died in the lifetime of Girdhari Lal leaving a son Ram Prasad. On 13th October 1913, Ram Prasad applied that he should be adjudicated an insolvent. He was so adjudicated on 18th May 1914. Babu Jado Rai, who is an advocate of this Court practising at Agra, was appointed a receiver on 3rd June 1914.

3. The receiver took certain steps to take possession of some property in the possession of Girdhari Lal on the averment that it was joint ancestral property and that the insolvent had a share therein. This was opposed by Girdhari Lal on the ground that the entire property in his hand was his self-acquired property. This contention was upheld by the Court on 10th September 1915.

4. Girdhari Lal died. The receiver claimed that the insolvent had inherited a one-fourth share in the estate of Girdhari Lal. Shambhu Nath and his two brothers (names unknown) repudiated the title of the insolvent and claimed the entire estate left by Girdhari Lal under a will executed by him. The insolvency Court on 12th November 1917 held the will to be genuine and decided the matter against the receiver.

5. Sita Ram and Tulsi Ram, the two minor sons of the insolvent, brought a suit for partition of their alleged share in the estate of Girdhari Lal. This suit was registered as Suit No. 292 of 1921 and was directed against Shambhu Nath and his two brothers. The minors obtained a preliminary decree for partition on 29th June 1928. This decree appears to have been superseded by a compromise between the parties by which the defendants appear to have bought out the plaintiffs and the plaintiffs received from the defendants a house in haveli Bahadur Khan in Mohalla Belanganj in the city of Agra and Rs. 8,000 in cash.

6. One of the scheduled creditors, named Beni Prasad, applid to the insolvency Court to attach this house. This application was dismissed on 24th September 1923. On appeal the learned District Judge by his order dated 18th February 1924 reversed the decision of the trial Court and made the following order:

“The receiver shall take possession of and distribute amongst the creditors the entire share of the one-sixth of the property …. of Girdhari Lal etc.

7. The sons appealed to this Court. The appeal was heard by Walsh, Ag. C.J and Dalal, J. Their judgment is reported in Sita Ram v. Beni Prasad(1). It was held that the point at issue in the case was whether a Hindu father was entitled or not to property obtained by his sons on a division of joint ancestral property when he desired to satisfy his debts out of the proceeds of such property. This issue was answered in favour of the receiver and the following propositions were enunciated:

“As soon as the sons received joint family property at partition, the right became vested in the receiver of taking their property to pay a Hindu father's debt. The receiver did not become entitled to this right subsequent to the partition.”

8. It was therefore ruled that the property sought to be attached by Beni Prasad was liable for the debts due from the insolvent but the sons of the insolvent were entitled to prove the immorality of the debts. As a sequence, this Court modified the order of the District Judge dated 18th February 1924 and remanded the case under O. 41, R. 23 of the CPC.

9. On remand the sons challenged the debts on the ground that the debts were not genuine. As the result of this objection the insolvency Court decided that the bulk of the debts was fictitious and that the sons were liable for only two debts amounting to Rs. 210 and Rs. 200 respectively. There was an appeal from this order and the learned District Judge held that it was not within the scope of the enquiry of the insolvency Court as the result of the order of remand passed by the High Court to go into the question of the genuineness of the debts. The learned District Judge held that the debts included in the schedule could be impugned by the sons on only one ground, namely, that they were tainted with immorality. There was a further appeal to this Court and the view of the learned District Judge was upheld.

10. Ram Prasad insolvent died on 15th September 1929.

11. On 13th February 1930 an application was presented by the receiver setting out in detail the facts which we have set out above. In para. 5 of this petition we find the following statement:

“The receiver applied to the insolvency Court for orders for taking property in his possession-under attachment. This application was resisted and the application was dismissed holding that in the insolvency proceedings, the minor sons of the insolvent could not be ejected and the receiver be pat in possession.”

12. The petition of the receiver referred to here has not been placed before us. The order of the insolvency Court directing the dismissal of the petition on the ground that the minor sons could not be dispossessed by the receiver has not been placed before us. If there is such an order in existence and the petition does not state that such an order has been displaced on appeal, it is not within the competence of the receiver to make a second petition against the sons of the insolvent for the grant of the identical relief.

13. The petition dated 13th February 1930 with which we are not concerned does not ask for the sons of the insolvent being ejected from the property and the receiver being put into possession. In para. 6, the receiver states that there-was once a sale of the attached house, that the bid of Mohan Lal creditor was for Rs. 14,000, that this sale proved infructuous, that the property was again put to sale and that no one came forward to purchase it as the purchaser could not get immediate possession over the property. The relief claimed was in these terms:

“Under the circumstances, I would request your honour to ask the scheduled creditors to bid over the house in question and the house should be knocked down to the highest bidder, or to pass such other order as the Court considers reasonable and proper.”

14. This petition was resisted by the insolvent's sons upon a variety of grounds including the ground that they were not liable to ejectment. Many of the pleas raised by them were not open to them by reason of previous orders against them which had the force of res judicata. Mr. Sayed Uddin disposed of the case by a most perfunctory judgment consisting of the following lines:

“There is no force in the objection of the minors. The receiver should take possession of the property and after proper advertisements and notification should sell the same. The receiver may take the help of the police, if necessary. Locks if any may be borken open.”

15. We are of opinion that the order was not reasonable and proper. In the first place, the receiver had not asked for the ejectment of the minors and for being put into possession of the property. In the second place, if the statement of facts embodied in para. 5 of the petition are correct, such a relief would not be open to the receiver if such relief had once been claimed by the receiver before and refused by the Court.

16. The order of Mr. Syed Uddin was affirmed by the District Judge. The judgment proceeded upon a ground which is perfectly intelligible to us although it may be erroneous. The learned Judge seemed to be of opinion that his predecessor by an order dated 18th February 1924 had directed the receiver to take possession of the property in question and that this order had been modified by the High Court but not set aside. We are of opinion that the learned District Judge had not been able to appreciate the nature and scope of the order of the High Court. We cannot enter into any question as regards the legality of the order of the High Court in the case reported in Sita Ram v. Beni Prasad. If the matter were res integra, we might have held that where on a compromise the sons of an insolvent receive certain property from certain persons who are the owners of the property under a will from their father, such property cannot be treated as the joint family property held by them in coparcenary with their father. We have already indicated we cannot enter into the question. The matter is concluded against the minors by previous judgments which are inter partes. But we have no doubt in our mind that the High Court by the judgment in the reported case did in substance though not in form supersede the order of the learned District Judge dated 18th February 1924. In modifying the order it did not intend to confirm and as a matter of fact did not adopt the order of that Court authorizing the receiver to take possession of the property. No question could arise as to the right of the receiver to seize the property so long as the question had not been settled as to whether the debts were enforceable against the sons. The High Court directed that as this had not been determined, the case must go back and the question determined. The question of the receiver's power to proceed in execution could not arise till that matter was disposed of. Under the insolvency law, the receiver is entitled under certain circumstances to seize or attach the property belonging to the insolvent. In the case of Anand Prakash v. Narain Das Dori Lal(2), one of the questions referred to the Full Bench was:

“whether it is open to the receiver in the insolvency to seize the sons' share and sell it in order to satisfy the debts payable by the father etc.”

17. The question was answered in the affirmative and it was held that the receiver could attaeh and sell the joint family property so as to bind the sons. In the reported cases, sometimes the word “seize” has been used and sometimes the word “attach.” We are of opinion that they have been indifferently used to express the same idea. Where property in the hands of the sons can be made available for payment of the father's debts, the receiver is entitled to have recourse to the usual processes of law, namely, to attach and sell the property. Attachment does not create an interest in the property attached. It has the effect of invalidating alienations in conflict with the interest of the auction-purchaser. There is nothing in the scheme of the Insolvency Act, authorizing the receiver to eject the sons of the insolvent from the property in their possession. The property of the sons is not the property of the insolvent. The right of the receiver to enforce the payment of the debts by reason of the pious obligation of the Hindu sons is not property which vests in the receiver under Section 28 of the Provincial Insolvency Act. Looked at from every possible angle, the receiver has no right to dispossess the sons of the insolvent from the property, and his right is restricted to attach and sell the property. In the result, we allow the appeal and set aside the orders of both the Courts below with costs. The case must go back to the trial Court for the disposal of the application, dated 13th February 1930, after the receiver has more clearly defined the exact nature of the relief claimed by him.

W.D/R.K

18. Appeal allowed.