Thaticherla Pichamma... v. The Official Receive...

Anantakrishna Aiyar and Cornish, JJ. — The 4th counter-petitioner T. Venkayya was adjudicated insolvent on 13th March 1925 on a petition filed by a creditor on 4th February, 1924. The Insolvent executed on 20th March, 1922, a sale-deed (Ex. II) and a mortgage-deed (Ex. III) in favour of his wife the first counter-petitioner. A petition was filed by the Official Receiver, Cuddapah, in the District Court on 7th August 1926, for an order that Exs. II and III be annulled and declared void as against the Official Receiver, under Sect. 53 of the Provincial Insolvency Act (V of 1920). The learned District Judge passed orders annulling Exs. II and III and declaring them void as against the Official Receiver. The first counter-petitioner, the wife of the insolvent, has preferred this appeal; and on her behalf it was argued that the learned District Judge had no jurisdiction to pass the order annulling the said transfers, because under Sect; 53 he could do so only:—

“if the transferor is adjudged insolvent within two years after the date of the transfer.”

The question is whether transfers made within two years prior to the presentation of the petition for adjudication as insolvent, but which are beyond two years from the date of the actual order of adjudication, could be annulled under Sect. 53 of the Act.

There has been difference of opinion on this question among the several High Courts in India. The Calcutta and the Madras High Courts have taken the view that such transfers could be annulled if they are within two years prior to the date of the presentation of the petition for adjudication: (See Rakhal Chandra Purkait v. Sudhindra Nath Bose (1) Sankaranarayana Aiyar v. Alagiri Aiyar (2), Rangiah v. Appaji Rao (3) and Venkatanarasayya v. Official Receiver, Godavari (4); whereas the High Courts of Bombay, Rangoon and Lahore have taken the opposite view: (See Nagindas v. Gardhandas Maung Pe v. Mating Po Htein and Hem Raj v. Krishen Lal . It was mentioned that the view of the Allahabad High Court is the same as that of the Madras High Court: Sheonath Singh…(Applicant); v. Munshi Ram…(Opposite Party).* ; but on referring to the report, we find that the question before the Court was not with reference to any transfer prior to the date of the petition for adjudication but in respect of a transfer made by the insolvent between the dates of the presentation of the petition and the order of adjudication. The decision in Hem Raj v. Krishen Lal is that of a Full Bench of that High Court. The various arguments in support of the respective contentions have been set out in that decision and the Indian Case-law on the point also is mentioned.

Under ordinary circumstances we should have felt bound to follow the three decisions of this High Court mentioned above, more especially as the learned Judges in Venkatanarasayya v. Official Receiver, Godavari (5) “say no reason for referring the question to a Full Bench:” We ordinarily in the circumstances would have rest satisfied with throwing a strong suggestion that it is pre-eminently a case for the legislature to intervene and make matters clear on such an important point; but we have been pressed with the change of language used in Sects. 51 to 55 and also Sect. 73 of the Provincial Insolvency Act. Though Sects. 53 and 54 deal with analogous matters, the words used in Sect. 53 are—“If the transfer or is adjudged insolvent within two years after the date of the transfer” while the words used in the very next section—Sect. 54, are—“If such person is adjudged insolvent on a petition presented within three months after the date thereof.” The wordings of the other Sects. 51, 52, 55 and 73 are also different. In a very recent case, Ramanandi Kuer v. Kalawati Kuer (6), the Privy Council point out that:

“Where there is a positive enactment of the Indian legislature, the proper course is to examine the language of that statute and to ascertain its proper meaning, uninfluenced by any consideration derived from the previous state of the law or of the English law upon which it may be founded.”

Though the Calcutta and the Madras decisions seem to carry out the policy of the legislature, we are not clear whether the words of Sect. 53, if interpreted according to the cannon of Construction enunciated by the Privy Council, support that interpretation. We think that in the circumstances the question Should be decided by a Full Bench of this Court.

We accordingly refer for the decision of a Full Bench the following question:

“Whether a transfer of property of the description given in Sect. 53 of the Provincial Insolvency Act (V of 1920) made by “an insolvent more than two years before the date of the actual order of adjudication but within two years of the date of the presentation of the petition for adjudication could be annulled by the Court under Sect. 33 of the Act at the instance of the Official Receiver.”

OPINION.

The question referred to us for decision runs as follows:

“Whether a transfer of property of the description given in Sect. 53 of the Provincial Insolvency Act (Act V of 1920) made by an insolvent more than two years before the date of the actual order of adjudication but within two years of the date of the presentation of the petition for adjudication could be annulled by the Court under Sect. 53 of the Act at the instance of the Official Receiver.”

The decision of this question depends upon the correct interpretation of the wording in Sect. 53 of the Act. The portion of the section relevant for our purpose is where it says that the adjudication of the insolvent should have been made within two years after the date of the transfer. As to the meaning to be attached to the point at which limitation has to be computed, there has been a conflict of judicial opinion. This High Court as also the Calcutta High Court has been of one opinion, namely, that a petition to annul an alienation can be filed if it is within two years before the presentation of the insolvency petition. The decisions of these High Courts proceeded on the view that the adjudication relates back to the presentation of the petition and following the view taken in the English decisions it has been so held. But a different view has been taken by the High Courts of Bombay, Rangoon and Lahore. The question, of interpreting the section is not quite free from difficulty; but in view of the recent amendment of this section by-Act X, 1930, which received the assent of the Governor-General on the 20th March, 1930, any doubt on this matter must be taken to have been set at rest.

The only point now to be considered is whether the amendment made by Sect. 6 of this Act has a retrospective effect, that is, will apply to a pending proceeding such as the one in question. If by means of this amendment, a new or altered period of limitation is prescribed, then it may be for consideration whether such an alteration in the law will have retrospective effect or not; but what would appear, from the Statement of Objects and Reasons in connection with this amending Act is that, in view of different interpretations having been put by several High Courts which led to a conflict of view, the legislature wanted to set that doubt at rest by declaring clearly what the real meaning of the expression in the section was. By the insertion of the words “on. a petition presented” after the words “is adjudged insolvent” the meaning is made clear and that meaning is in accordance with the view taken by this High Court and the Calcutta High Court. If the amendment in question has not introduced a new period of limitation but has only clarified the meaning of the old section, there is no doubt that it must be taken to apply to the present case. The recent Full Bench decision of this Court in Veerappa Chettiar v. Subramania Ayyar supports the view which we are taking. That case was in respect of an amendment made to a certain section in the Transfer of Property Act as to the meaning of the word “attestation” and it was held that the amendment had retrospective effect. It is difficult to distinguish in principle the present case from the one dealt with by the Full Bench. That being so, we think it unnecessary to canvass the decision of the several High Courts which were given under Sect. 53 of the Act before the amendment. We, therefore, answer this question in the affirmative.

N. R. R.Reference answered.