Citation Codes

Equivalent Citations

citation codes

Case Number

Appeal Against Order No. 395 of 1926.

Attorney(S)

Mr. T. R. Arunachala Aiyar for Mr. B. Somayya for the Appellant.
Mr. V. S. Govindachar for the 1st Respondent.

Judges

Devadoss, J.
On a reference under Sect. 98
C. P. C.
by Odgers
Curgenven, JJ..

Acts

Indian Insolvency Act, Statute 11 and 12 Vic, Chap. 21. The Provincial Insolvency Act of 1920
Presidency Towns Insolvency Act of 1907. The Provincial Insolvency Act of 1907
Provincial Insolvency Act of 1907 and the present Insolvency Act of 1920,
PROVINCIAL INSOLVENCY ACT 1920
English Bankruptcy Act and the Presidency Towns Insolvency Act
Presidency Towns Insolvency Act, the Act and the Act
Sect. 52(2) of the Presidency Towns Insolvency Act
Sect. 52 of the Presidency Towns Insolvency Act
19:The section of the Bankruptcy Act of 1883
Sect. 2 (d) of the Provincial Insolvency Act
Sect. 28 of the Provincial Insolvency Act
Sect. 65 of the Provincial Insolvency Act
PRESIDENCY TOWNS INSOLVENCY ACT 1909
Sect. 2 (e) of the Presidency Towns Act
Sect. 30 of the Indian Insolvency Act
Provincial Insolvency Act (V of 1920),
Provincial Insolvency Act of 1907
PRESIDENCY TOWNS INSOLVENCY ACT
Sect. 120 of the Lunacy Act, 1890,
Sect. 30 of the Insolvency Act,
PROVINCIAL INSOLVENCY ACT

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Smart Summary

Summary of Court Opinion — Reference under Sect. 98 CPC on Vesting of Manager's Disposing Power

Factual and Procedural Background

This matter arises from an appeal against an order of the District Judge of Anantapur under a petition framed under Sect. 65 of the Provincial Insolvency Act to set aside a sale insofar as it affected a certain minor's share in property sold. The facts, as stated in the opinion, involve a Hindu joint trading family whose members incurred debts for the family trade. The Official Receiver sold joint family properties for the benefit of the creditors.

The joint family included two insolvents (referred to as the second and third insolvents), an undivided brother (the manager), the petitioner (another member) and a nephew of the first insolvent. The core procedural issue before the Court was whether the manager's power (when the manager is not the father) vests in the Official Receiver so as to permit sale of a minor's share.

The District Judge had held that the minor's share was not liable to be sold. Two Judges (Odgers, J. and Curgenven, J.) gave differing opinions on appeal: Odgers, J. would allow the Civil Miscellaneous Appeal (holding that the Official Receiver had vested manager's powers), whereas Curgenven, J. would dismiss the appeal (holding the minor's share was not liable). Because of the difference of opinion, the point of law was referred under Sect. 98, Code of Civil Procedure, to a third Judge for opinion. The reference question as framed is reproduced in the opinion (see below).

Counsel of record as named in the opinion: Mr. B. Somayya for the Appellant; Mr. V. S. Govindachar for the 1st Respondent.

Legal Issues Presented

In a Hindu joint trading family where there are one or more minor members and the manager is not the father, and the adult members including the manager have been adjudicated insolvents, does the power of the manager to dispose of the joint family property for debts incurred for trading purposes pass to and become exercisable by the Official Receiver so as to bind the minors' shares?
More broadly, whether under the Provincial Insolvency Act (notably Sect. 28 read with the definition of "property" in Sect. 2(d)), the managing member's disposing power over co-parceners' shares constitutes "property" of the insolvent that vests in the Official Receiver when the managing member is adjudicated insolvent.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court (how the opinion used or treated it)
Sanyasi Charan Mandal v. Asutosh Ghose	Held that a minor partner should not be adjudicated an insolvent; decision treated as a partnership case and stated not directly in point for some aspects of Hindu family cases.	Referred to show that a minor cannot be adjudicated insolvent and to distinguish partnership cases from joint Hindu family circumstances; the opinion notes it was not directly in point for certain questions about receivers dealing with non‑adjudicated persons' property.
Sat Narain v. Behari Lal (Privy Council)	Established that it is not the members' shares that vest in the Official Receiver but the father's power to sell the shares under certain circumstances (the decision also observed how property of sons might be made available under other provisions).	Used as a principal authority for the proposition that the Father's disposing power (not the sons' shares) can vest in the Official Receiver; central to the debate whether the same principle extends to a manager who is not the father.
Seetharama Chettiar v. Official Receiver, Tanjore (Full Bench)	Full Bench held that under Sect. 28 of the Provincial Insolvency Act the father's power to sell his sons' shares for his debts vests in the Receiver (sons' shares themselves do not vest).	Relied upon by those Judges who would hold that the disposing power vests in the Receiver; discussed at length and contrasted with the view that the definition of "property" in Sect. 2(d) ought to be decisive.
Rangayya Chetti v. Thanikachalla Mudali	Subrahmanya Aiyar, J.'s reasoning supported (in that case) that the Official Assignee could convey shares of those persons upon whom the debts of the insolvent were binding; the judgment contains discussion about whether there is any sound distinction between sons and other co-parceners.	Cited as authority supporting the proposition that the Official Receiver can deal with co-parceners' shares (including brothers or collaterals) where the debts are binding on them; explicitly relied upon by the third Judge and by Judges who favoured vesting manager's power in the Receiver.
Fakirchand Motichand v. Motichand Harruckchand	Earlier authority considered in the course of decisions about the Official Assignee's powers over family property and shares.	Referenced as one of the earlier authorities relied upon in Rangayya Chetti; used to show historical judicial treatment of similar questions (limited, as per the text, to the factual and statutory contexts of those cases).
A.A.O. No. 31 of 1925 (Waller & Madhavan Nair, JJ.)	Held that the power of the manager to deal with joint family property vests in the Official Receiver and that he is entitled to sell joint family property to satisfy family debts (case of a brother/paternal cousin as manager).	Relied upon by Odgers, J. and by the third Judge as recent supporting authority for holding that the manager's power vests in the Official Receiver.
Nannu Setti v. Chidaraboyina	Considered whether the undivided share of a minor co-parcener vested in the Official Assignee; judgment passed under a different statute and to be read subject to the Privy Council's observations in Sat Narain.	Cited to show earlier judicial doubts and to demonstrate statutory differences; the opinion notes it is not directly authoritative under the current Acts but contains useful observations (including an expressed personal doubt about whether the managing member's power is within the Insolvency Act).
Official Assignee of Madras v. Ramachandra Ayyar	Previously held that where a managing member was adjudicated insolvent the Official Assignee could take possession of the family property (with consequent power of sale for debts binding on the family).	Noted as authority whose force was affected by the Privy Council decision in Sat Narain; cited in discussion of whether possession and power of sale follow from adjudication.
Jagabhai Lalubhai v. Bhukandas Jagjivandas	Earlier case referred to in the chain of authorities about the Official Assignee/Receiver's powers over family property.	Referenced as one of the precedents considered in Rangayya Chetti and subsequent reasoning; used as part of the historical jurisprudential background.
Subramania Aiyar (decision referred to in text)	Expressed view (as cited) that the manager's disposing power might be within the meaning of the Insolvency Act; specific phrasing used by the opinion when summarising various judicial views.	Referred to in the context of contrasting judicial approaches; the opinion quotes and considers Subramania Aiyar's reasoning in the broader survey of authorities.

Court's Reasoning and Analysis

Odgers, J. (majority view in his opinion)

Begins by framing the sole question: whether the manager's power (when the manager is not the father) vests in the Official Receiver to permit sale of a minor's share.
Affirms that a minor cannot be adjudicated insolvent and relies on Sanyasi Charan Mandal v. Asutosh Ghose to that effect.
Relies on the Privy Council decision in Sat Narain v. Behari Lal to show the established principle that what vests in the Official Receiver is not the shares themselves but the disposing power of the father under certain circumstances.
Accepts the Full Bench decision in Seetharama Chettiar v. Official Receiver (Tanjore) as explaining that under Sect. 28 the father's disposing power vests in the Receiver as insolvent's property; views that if this can be based on Sect. 28 the limitation in Sect. 2(d) is avoided.
Sees no principled difference between a father-manager and a brother-manager: if a brother-manager can sell to preserve the business and thereby exercises a disposing power for his own benefit (in the relevant, restricted sense), that power should vest in the Official Receiver.
Finds support in the recent A.A.O. No. 31 of 1925 decision (Waller & Madhavan Nair, JJ.) and on that basis holds the District Judge to be wrong and would allow the Civil Miscellaneous Appeal with costs.

Curgenven, J. (dissenting view)

Emphasises a distinction between (a) vesting of joint family property in the Official Receiver and (b) vesting of a power of disposal over that property.
Accepts the Privy Council's Sat Narain holding that upon a father's adjudication the members' shares do not vest in the Official Assignee; only the father's undivided share does. Notes this applies to the Provincial Act as well.
Accepts the Full Bench (Seetharama Chettiar) as laying down that the father's power to sell his sons' shares vests in the Receiver under the Provincial Act, but asks whether that principle should be extended to a managing member who is not the father.
Focuses on the statutory definition of "property" in Sect. 2(d): "property includes any property over which, or the profits of which, any person has a disposing power which he may exercise for his own benefit." Curgenven, J. reads "for his own benefit" as excluding a disposing power exercisable only in a representative capacity.
Argues that a manager of a joint family disposes in a representative capacity to benefit the family, not for his own sole benefit; therefore the manager's disposing power does not fall within the definition of the insolvent's "property" that vests in the Official Receiver under Sect. 28.
Surveys earlier authorities (including Rangayya Chetti and Nannu Setti) but concludes it is unwarrantable to extend the Full Bench's reasoning so as to cover managers other than fathers; would therefore confirm the District Judge and dismiss the appeal with costs.

Third Judge (reference under Sect. 98, final "Opinion")

The reference question is reproduced verbatim and repeated as the central issue to be decided.
Reviews the settled law: under the Presidency Towns Insolvency Act the father's disposing power vests in the Official Assignee; the Full Bench (Seetharama Chettiar) held that under the Provincial Insolvency Act (V of 1920) a father's disposing power vests in the Official Receiver.
Poses the specific question whether the same principle applies where the managing member is not the father.
Surveys Rangayya Chetti and allied authorities (including Jagabhai Lalubhai, Fakirchand Motichand) where Subrahmanya Aiyar, J. held that the Official Assignee can convey shares of those upon whom the insolvent's debts are binding, and notes subsequent decisions that followed that approach (including Nannu Setti and A.A.O. No. 31 of 1925).
Observes that, were the question res integra, he might have been inclined to construe Sect. 28 together with Sect. 2(d) so as not to include a manager's representative disposing power; yet because of the line of existing decisions and recent authorities (Rangayya Chetti; A.A.O. No. 31 of 1925) he follows those cases.
Concludes by answering the referred question in the affirmative: he follows Rangayya Chetti and Waller & Madhavan Nair (A.A.O. No.31/1925) and holds that the manager's power to deal with joint family property vests in the Official Receiver and that the Receiver is entitled to sell the joint family property to satisfy debts binding on the family.

Holding and Implications

Holding: Question answered in the affirmative. The third Judge, after reference under Sect. 98 CPC, held that in the circumstances posed by the reference the power of the manager (who is not the father) to dispose of joint family property for debts incurred for trading purposes does pass to and become exercisable by the Official Receiver so as to bind minors' shares, following Rangayya Chetti and the decision in A.A.O. No. 31 of 1925.

Immediate Consequences for the Parties

One Judge (Odgers, J.) had allowed the Civil Miscellaneous Appeal with costs on the basis that the Official Receiver had vested manager's disposing powers and so the sale could bind the minor's share.
Another Judge (Curgenven, J.) dissented and would have confirmed the District Judge's order setting aside the sale of the whole property so far as it affected the minor.
By reason of the difference of opinion the matter was referred to a third Judge, who answered the referred question in the affirmative, supporting the view that the Official Receiver's powers include the managing member's disposing power and that such power can bind minors' shares where debts of the family are properly shown to be binding on them.

Broader Legal Implications (as discussed in the opinion)

The opinion records a clear division in judicial approach: (a) one line of authority (including the Full Bench in Seetharama Chettiar and the recent A.A.O. No. 31 of 1925) supports vesting of the managing member's disposing power in the Official Receiver, and (b) another line emphasises the statutory definition of "property" (Sect. 2(d)) and the phrase "for his own benefit" as limiting vesting to powers exercisable for the insolvent's own/sole benefit (which, it is argued, excludes representative powers such as those exercised by a manager for family benefit).
The opinion notes that some earlier authorities operate under different statutes or have been affected by the Privy Council's decision in Sat Narain v. Behari Lal; the Court recognises the statutory nuances between the Presidency Towns Act, the old Indian Insolvency Act and the Provincial Insolvency Acts and the deliberate legislative wording changes (e.g., adoption of the phrase "for his own benefit").
Because the third Judge follows existing judicial decisions (notably Rangayya Chetti and A.A.O. No. 31/1925), the practical effect indicated by the opinion is that an Official Receiver can, in cases meeting the criteria identified, exercise the manager's disposing power and thereby sell shares of non-adjudicated members (including minors) where the debts are shown to bind those shares.

Note: This summary is confined to and faithful to the content of the provided opinion. It does not add facts or arguments beyond those expressly contained in the text of the opinion.

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The Official Receiver, Anantapur (1St ). v. Ramachandrappa, Minor By Next Friend Bala Nagamma And Others S (Petitioner And S 2 To 5).

Odgers, J. — This is an appeal from the order of the District Judge of Anantapur on a petition under Sect. 65 of the Provincial Insolvency Act to set aside a sale with regard to a certain minor's share in the properties sold. The matter concerns a trading family and the debts have been incurred for the family trade. The Official Receiver sold the joint family properties for the benefit of the creditors. The joint family consists of the second and third insolvents and their undivided brother, the petitioner and another member, nephew of the first insolvent. The sole question in this case is whether the power of the second insolvent as the manager but not the father of the joint Hindu family vests in the Official Receiver to permit him to sell the share of the minor in the property. It is, of course, clear that the minor cannot be adjudicated an insolvent and in Sanyasi Charan Mandal v. Asutosh Ghose which was a case like the present of a minor partner in a family concern, it was held that the minor should not be adjudicated simply because there was a restricted remedy under the Contract Act against his share in the partnership. The Court expressly said that it would make no difference if it were a Hindu trading family. It is now settled by the Privy Council in Sat Narain v. Behari Lal(2), that it is not the share of the members of the joint family that vest in the Official Receiver but the power of the father to sell the shares of the other members under certain circumstances. Their Lordships lay this down perfectly clearly although they also make it clear that under Sect. 52(2) of the Presidency Towns Insolvency Act or in some other way the property of the sons may be made available for payment of the father's just debts. That was explained by a Full Bench of this Court in Seetharama Chettiar v. Official Receiver, Tanjore(3), which was the case of a father. Krishnan and Ramesam, JJ., heldthat such a power vests in the Receiver under Sect. 28 of the Act as the insolvent's property and not as property under Sect. 2 (d), which was the view taken by Venkatasubba Rao., J. I do not understand the learned Judges to have based their decision exclusively on the fact that the manager in that case was the father, because it seems to me that if you can base the decision as the majority did on section 28 of the Act, you are free from the definition in Sect. 2 (d) which says that property includes

“any property over which or the profits of which any person has a disposing power which he may exercise for his own benefit.”

It has been contended that in the face of that section it is only father's power that can possibly vest in the Official Receiver, namely, the right to sell the joint family property for the payment of his own just debts. But I fail to see any difference in principle between that and the case of a brother (manager) who is justified in selling the joint property for paying the debts of the joint family business. The minor was interested in the business, just as the manager was and if the manager can sell in order to preserve the business, it seems to me that he is exercising a disposing power which he may exercise for his own benefit. The Privy Council in Sat Narain v. Behari Lal although they refer to the case in Rangayya Chetti v. Thanikachalla Mudali later on say that it was decided under a different statute and that Sanyasi Charan Mandal v. Asutosh Ghose was a partnership case and these are not directly in point. In the first of these cases, Subrahmanya Aiyar, J., following Fakirchand Motichand v. Motichand Harruckchand(4) held that the Official Assignee could convey the share of the sons in the joint property but not the share of the brother. It seems to me that once you get the idea admitted of the power of disposition over the property of the insolvent which is clearly established in Sat Narain v. Behari Lal and Seetharama Chettiar v. Official Receiver, Tanjore(5) there is no difference between the power of the manager if he is a father and the power of the manager when he is a brother or other relation even in the case of a minor partner who cannot be adjudicated. I am supported in this view by a very recent decision of Waller and Madhavan Nair, JJ., in A.A.O No. 31 of 1925 which was a case of a brother or paternal cousin in which they say the power of the manager to deal with joint family property vests in the Official Receiver, relying on the observations of Subrahmanya Aiyar, J., in Rangayya Chetti v. Thanikachalla Mudali. I would therefore hold that the learned District Judge is wrong and that the Official Receiver, though he did not succeed to the managership of the family, had vested in him the manager's powers of disposition.

The Civil Miscellaneous Appeal should therefore, in my opinion, be allowed with costs.

Curgenven, J.—The question we have to decide in this case is whether upon the manager of a Hindu family and some but not all the other members carrying on a family trade being adjudicated insolvents, the Official Receiver can, under the Provincial Insolvency Act V of 1920, sell the whole joint family property including the shares of those not adjudicated. In the present case, the members adjudicated were an uncle and two out of three brothers, the third brother who was not adjudicated being a minor. In the order now under appeal the learned District Judge has held that the minor's share is not liable to be sold.

There is a clear distinction butween the vesting of joint family property in an Official Receiver and the vesting of a power of disposal over that property. It has been held by the Privy Council in Sat Narain v. Behari Lal that upon the adjudication of a Hindu father under the Presidency Towns Insolvency Act the property of the Joint Hindu family consisting of himself and his sons does not therby become vested in the Official Assignee but only the father's undivided share so vests; and this decision applies equally to an adjudication under the Provincial Act. A fortiori the rule holds good if we substitute a family manager other than a father for a father. This decision of their Lordships came under consideration in a recent Madras case, Seetharama Chettiar v. Official Receiver, Tanjore where the question which arose was whether, upon a father's adjudication under the Provincial Insolvency Act, his power to sell his son's shares, as well as his own share, for paying his just and proper debts vested in the Official Receiver. The point raised being deemed one of considerable importance, a Bench consisting of three Judges (Krishnan, Ramesam and Venkatasubba Rao, JJ.) was constituted to decide it. They unanimously affirmed the proposition, agreeing that the Privy Council decision went no further than to lay down that the son's share did not vest, and left undecided this further point. Accepting then, as we must, the view of the insolvency law taken by this Full Bench, does it follow that the power of disposal of a manager of a Hindu family also vests, under the Provincial Insolvency Act, in the Official Receiver?

The point which the Full Bench had in effect to decide was whether the word “property” as used in Sect. 28 of the Provincial Act, included a father's disposing power over his son's share. “Property” is defined in Sect. 2 (d) as incuding “any property over which, or the profits of which, any person has a disposing power which he may exercise for his own benefit.”

Krishnan, J., thought that there might be some difficulty in applying this definition because in the Lahore case their Lordships seemed to be of opinion that the similar definition in Sect. 2 (e) of the Presidency Towns Act contemplated only an “absolute and unconditional power of disposal,” which a father's power is not; but he thought that Sect. 28 was enough to vest the power in the Receiver as a species of property belonging to the father. Ramesam, J., who does not refer to the definition, seems to have been of the same opinion.

Venkatasubba Rao, J., deemed the definition in Sect. 2 (d) of the Provincial Insolvency Act to include “the qualified and restricted power of a Hindu father.”

Whatever view be taken of the scope of the definition, it appears to me that by qualifying the words “disposing power” by the words “which he may exercise for his own benefit” the intention was to exclude a disposing power which the debtor was competent to exercise only in a representative capacity; and it can scarcely be gainsaid, I think, that a manager disposes of family property in this capacity. The judgment of Subrahmanya Aiyar, J., in Rangayya Chetti v. Thanikachalld Mudali, which has been relied upon in a case (A. A. O. No. 31 of 1925) recently decided by Waller and Madhavan Nair, JJ., has been criticised before us as not giving due weight to this distinction. The single insolvent had undivided sons and an undivided brother, and after holding that the insolvent had disposing power over his sons' shares, the learned Judge continues:

“Nor as to the 2nd defendant [the brother] am I able to see any sound distinction, in principle between his case and that of the other defendants (the sons) just referred to. For if the son's share is property which the father has power to dispose of for his own benefit, how can the share of any other undivided co-parcener, which the managing member can convey for debts incurred by him for legal necessity, be treated differently”?

The distinction in principle is perhaps that the son's property is liable for the father's personal debts contracted for his own benefit so long of course as they are not contracted for purposes illegal or immoral, whereas as family manager, he can contract binding debts not for his own benefit but only for the benefit of the family.

In Nannu Setti v. Chidaraboyina the question arose whether the undivided share of a minor co-parcener, son of one of the insolvents, vested in the Official Assignee. The judgment of Bhashyam Aiyangar, J., must be read subject to the observations made upon it by their Lordships in Sat Narain v. Behari Lal; it was passed under a different statute, and need not be taken as authority under either of the present Insolvency Acts. I only wish to extract from it, here, the following remark of the learned Judge:

“If the question were res Integra and not covered by a course of judicial decisions, bearing upon the corresponding expression occurring in Sect. 266 of the Civil Procedure Code (now Sect. 60) I should entertain considerable doubt as to whether a power which, under the Hindu law, a managing member of a joint Hindu family has over the interests and shares of the junior members in the family property, is within the meaning of Sect. 30 of the Insolvency Act, a power vested in the insolvent which he can lawfully exercise for his benefit.”

Since the Privy Council have now deprecated the practice of deriving an analogy from Sect. 266 of the Civil Procedure Code, and have upon this ground among others disposed of the cases which stood in the learned Judge's way, this obser vation is entitled, I think, to much weight as an expression of Bhashyam Aiyangar, J.'s personal opinion. Official Assignee of Madras v. Ramachandra Ayyar is another case the authority of which has been affected by the Privy Council decision, for it lays down that an Official Assignee, in the case of a managing member's insolvency, can take possession of the family property, and of course it would follow that he has the power of sale in respect of debts binding on the family.

A case in which the contrary view was taken is Sanyasi Charan Mandal v. Asutosh Ghose also referred to in the recent Privy Council judgment. After considering the English case Lovell Christmas v. Gilbert Walter Beauchamp Mookerjee and Beachcroft, JJ., say:—

“The decision of the House of Lords cannot, consequently, be rightly regarded as an authority for the proposition that in a bankruptcy proceeding it is open to the Court to direct the receiver to deal with assets other than those belonging to the persons who had been adjudged insolvents. It would indeed be surprising if the Court could, in a proceeding under the Insolvency Act, deal with the property of a person who had not been adjudicated an insolvent.”

This statement of the law was approved in an offshoot of the same case, which came before the Privy Council in Sanyasi Charan Mandal v. Krishnadhan Banerji.

The conclusion, which, with great respect to the learned Judges who have held otherwise I feel compelled to reach from this brief survey of the case law and from a consideration of the definition of “property” in Sect. 2 (d) is that it is unwarrantable to extend the recent Full Bench decision so as to cover the insolvency not only of a father but also of a managing member. It may be said that a father, in respect of such of his own debts as are binding upon his sons, has a disposing power “for his own benefit” over the son's property, and that, therefore, the receiver has the same disposing power. The disposing power possessed by a managing member is not for his own benefit but for benefit of the family, and such a power does not fall within the definition of an insolvent's property which, under Sect. 28, will vest in the receiver. I would, therefore, confirm the learned District Judge's order setting aside the sale of the whole property and would dismiss the appeal with costs.

By Court.—As we have differed in opinion and the matter is one of importance and likely to recur, we decide to refer the following point of law under Sect. 98, Civil Procedure Code, to a third Judge for opinion, subject to the directions of the Hon'ble the Chief Justice:

“In a Hindu joint trading family where there are one or more minor members and the manager is not the father and the adult members including the manager have been adjudicated insolvents, does the power of the manager to dispose of the joint family property for debts incurred for trading purposes pass to and become exercisable by the Official Receiver so as to bind the minors' shares?”

[This appeal came on for final hearing on 23rd and 26th March, 1928 before his Lordship Devadoss, J.].

Mr. B. Somayya for the Appellant.

Mr. V. S. Govindachar for the 1st Respondent.

OPINION

This is a reference under Sect. 98 of the Code of Civil Procedure, owing to a difference of opinion between brothers Odgers and Curgenven. The point referred is:

Both the learned Judges referred to almost all the cases on the point and it is unnecessary for me to discuss them in detail. It is well settled that under the Presidency Towns Insolvency Act, the power of the father to dispose of his son's share for a debt which is neither illegal nor immoral on his becoming an insolvent vests in the Official Assignee. It was held by the Full Bench in Seetharama Chettiar v. Official Receiver, Tanjore, that under the Provincial Insolvency Act (V of 1920), on the insolvency of a Hindu governed by the Mitakshara law, his power to sell his sons' shares also for paying his just and proper debts vests in the Official Receiver; the sons' shares themselves do not vest in the Receiver.

The question is whether the same principle would apply to the case where the manager of a joint Hindu family is not the father. The power of the father to sell the sons' shares for his debts has been held not to rest solely on the pious obligation of the son to pay his father's debts. If that is so, it is difficult to see how the manager of a joint Hindu family stands on a different footing when the debts contracted by him are such as would bind the members of the joint family. In Rangayya Chetti v. Thanikachalla Mudali the Official Assignee conveyed a house forming part of the family property of the insolvent to the plaintiff who sued for possession. The younger brother of the insolvent contested the suit. It was held that the Official Assignee could convey the shares of those persons upon whom the debts of the insolvent were binding. Subrahmania Aiyar, J., after referring to the cases in Jagabhai Lalubhai v. Bhukandas Jagjivandas and Fakirchand Motichand v. Motichand Hurruckchand observed at page 77:

“Nor as to the second defendant, am I able to see any sound distinction in principle between his case and that of the other defendants just referred to For, if the son's share is property which the father has power to dispose of for his own benefit in the restricted sense explained by West, J., in the passage quoted above, how can the share of any other undivided co-parcener, which the managing member can convey for debts incurred by him for legal necessity, be treated differently? No doubt there is difference in the proof to be adduced as to the character of the debt in the two instances. But the essential element that the shares other than that of the transferee are liable to be proceeded against for the transferor's debt is common to both the cases. I must therefore hold that the Official Assignee has in law power to transfer not only the share of the insolvent, but also those of his co-parceners, whether they be his sons or brothers or other collaterals, provided of course the debts for which the property is disposed of, are shown to have been incurred for purposes binding upon them.”

This case was followed in Nannu Setti v. Chidaraboyina. That was a decision of a Bench consisting of Bhashyam Aiyangar and Moore, JJ. Bhashyam Aiyangar, J., who delivered the judgment of the Court relying upon the decisions under Sect. 266 of the Code of Civil Procedure and after referring to Fakirchand Motichand v. Motichand Hurruckchand and Jagabhai Lalubhai v. Bhukandas Jagjivandas and the Judgment of Subrahmania Aiyar, J., in Rangayya Chetti v. Thanikachalla Mudali held that the power referred to in Sect. 266 of the Code of Civil Procedure was the same as the power referred to in Sect. 30 of the Insolvency Act. In A. A. O. No. 31 of 1925, Waller and Madhavan Nair, JJ., held following Rangayya Chetti v. Thanikachalla Mudali that:

“the power of the manager to deal with the jointfamily property vests in the Official Receiver and that he is entitled to sell the joint family property to satisfy the debts of the family.”

If the question was res Integra I should be inclined to hold that under the Provincial Insolvency Act, the power of a Hindu father to dispose of his son's shares in the family property for his debts does not vest in the Official Receiver. Sect. 28 of the Provincial Insolvency Act vests in the Court the whole property of the insolvent on the making of an order of adjudication. This expression “whole of the property of the insolvent” has been construed in Seetharama Chettiar v. Official Receiver, Tanjore as to include the power of the father to dispose of the son's share for his debt. In Official Assignee of Madras v. Ramachandra Ayyar, it was held that where the managing member of a Hindu family consisting of himself and his sons is adjudicated insolvent, the interests of the sons do not vest in the Official Assignee by reason of the adjudication although it would be competent to the latter to deal with their shares, if the debts of the insolvent were of such a nature as to be binding on their interest. In Subramania Aiyar v. Krishna Aiyar Phillips and Madhavan Nair, JJ., held that the power of a Hindu father over the family property including the son's interests therein must be deemed to be property within Sect. 28 and as such vests in the Court of the Receiver. Phillips, J., after referring to Sect. 52 of the Presidency Towns Insolvency Act observed:

“If therefore the English Bankruptcy Act and the Presidency Towns Insolvency Act considered this power as the property of the insolvent, there must be very strong reason for holding that the same word ‘property’ in the Provincial Insolvency Act has a different meaning and excludes such powers. On this ground I think it must be held that the power of the Hindu father over the family property must be deemed to be “property” within the meaning of the Act and as such vests in the Court of the Receiver.”

The definition of the word “property” in Sect. 2 (d) is

“property includes any property over which or the profits of which any person has a disposing power which he may exercise for his own benefit.”

In Sect. 28, the expression is “the property of the insolvent.” According to the definition of the term ‘property,’ unless there be anything repugnant in the subject or context, the word “property” should be understood as defined in Sect. 2 (d). With very great respect to the learned Judges who decided Seetharama Chettiar v. Official Receiver, Tanjore I am unable to see why the word “property” should not be interpreted as defined in the definition section. Their Lordships of the Privy Council in Sat Narain v. Behari Lal clearly laid down that in interpreting the Presidency Towns Insolvency Act, the Act and the Act alone must be taken into consideration. If the word “property” as used in Sect. 28 is understood as defined in Sect. 2 (d), there would not be much difficulty in disposing of this case; for the term “property” includes any property over which or over the profits of which any person has a disposing power which he may exercise for his own benefit. The expression “own benefit” is derived from the English Bankruptcy Act of 1883. This expression was not found in the Indian Insolvency Act which was in force till the Presidency Towns Insolvency Act was enacted in 1909.

In Sect. 30 of the Indian Insolvency Act the expression was “which he might lawfully execute for his benefit.” In enacting the Provincial Insolvency Act of 1907 and the present Insolvency Act of 1920, the legislature advisedly used the expression “for his own benefit.” There must be some object in the legislature advisedly using the expression “own benefit” when it was not found in the Indian Insolvency Act. That expression “own benefit” has been the subject of interpretation in the English Courts. In The goods of Jane Turner it was held that the expression “own benefit” meant his sole benefit. Butt, J., observed at page 19:

“The section of the Bankruptcy Act of 1883 to which T have been referred seems to me to be limited to rights which a Bankrupt may exercise for his own benefit, and for his own benefit alone.”

In that case the trustee in Bankruptcy claimed the right to administer the estate of the insolvent's deceased wife to the administration of which he was entitled. The Court held that the trustee was not entitled to the administration of the estate of the insolvent's deceased wife even though he was entitled to some beneficial interest in the estate. In Re S. S. B. and In Re Salt it was held that under Sect. 120 of the Lunacy Act, 1890, the committee in lunacy did not get any power vested in the lunatic for his own benefit. Applying the principle of these cases to the expression “own benefit” as used in Sect. 2 (d) we have to see whether the manager of a joint Hindu family can for his own benefit sell the family property. He can sell the family property for his debts which are binding upon the family; he cannot sell the family property for his own debts if they are not binding on the family. When debts are binding on the family, the whole family is bound to pay off the debts; and when the manager sells the property of the family for debts binding on the family, he sells the family property not for his sole benefit but for the benefit of or on behalf of all the members of the family on whom the debt is binding; and therefore when the managing member of a joint Hindu family becomes insolvent, the power to sell the shares of the other members cannot vest in the Official Receiver as it is not a power which is exercisable for the insolvent's own or sole benefit. In Nunnu Setti v. Chidaraboyina Bhashyam Aiyangar, J., observed:

“If the question were res integra and not covered by the course of judicial decisions bearing upon the corresponding expression occurring in Sect. 266 of the Civil Procedure Code, I should entertain considerable doubt as to whether the power which under the Hindu Law, a managing member of a joint Hindu family has over the interests and shares of the junior members in the family property, is within the meaning of Sect. 30 of the Insolvency Act, a power vested in the insolvent, which he can lawfully execute for his benefit.”

In some of the later cases, it has been held that the Provincial Insolvency Act of 1907 must be understood in the light of the Indian Insolvency Act and the Provincial Insolvency Act of 1920 should be understood in the light of the Presidency Towns Insolvency Act of 1907. The Provincial Insolvency Act of 1907 made considerable departure from the old Indian Insolvency Act, Statute 11 and 12 Vic, Chap. 21. The Provincial Insolvency Act of 1920 has departed in several respects from the Presidency Towns Insolvency Act. Though in many respects the Provincial Insolvency Act of 1920 is brought into line with the Presidency Towns Insolvency Act of 1909 yet the legislature advisedly omitted to introduce into the former Sect. 52 of the latter Act and it is not right for the Courts, I venture to say, to import into it what the legislature advisedly refrained from putting into it. The power of the father

“to dispose of the joint family property is not absolute but conditional on his having debts which are liable to be satisfied out of that property” Sat Narain v. Behari Lal.

If the property is the insolvent's within the meaning of Sect. 2 (d), it vests in the Official Receiver and, if it is not, it does not vest. In the absence of some section like Sect. 52, there is hardly any warrant for holding that the shares of the sons do not vest in Official Receiver but the power of the father to dispose of them vests in him. Sect. 28, Cls. (3), (4) and (5) which indicate what and what not is the property of the insolvent makes no reference to his capacity or power in or over property which he could exercise for his own benefit.

The question whether Sect. 28 vests in the Official Receiver the power of the father to dispose of the son's share for his debt will have to be examined by a fuller Bench when the question arises. I have indicated my view on this point in order to help discussion when the question is again brought up.

Following the decision of Subrahmanya Aiyar, J., in Rangayya Chetti v. Thumkachalla Mudali and the decision of the Bench of Waller and Madhavan Nair, JJ., in A. A. O. No. 31 of 1925, I answer the question referred to me in the affirmative.

W.S.SQuestion answered in the affirmative.

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