The main legal principle established in the judgment is that the rules of the Association extinguished the insolvent's interest in the membership card and its proceeds upon forfeiture of membership, and the Transfer of Property Act did not apply to the membership card.

Judgement

Appeal (No. 56 of 1931) from a decree of the High Court in its appellate jurisdiction (September 30, 1930) affirming a decree of the Court in its original jurisdiction (March 19, 1930).

On June 23, 1925, a member of the Bombay Native Share and Stock Brokers Association was declared a defaulter under the rules of the Association, and his card or right of membership was forfeited by the directors. On July 2, 1925, the member was adjudicated an insolvent under the Presidency-towns Insolvency Act, 1909, his insolvency dating from some days before the forfeiture of his membership became effective.

On October 9, 1928, the appellant, the Official Assignee, instituted a suit in the High Court against the respondents, directors of the Association, on behalf of themselves and all other members, claiming (1.) a declaration that the insolvents card of membership and all rights and benefits annexed thereto vested in the plaintiff, and that the plaintiff was entitled to the net proceeds of the sale thereof ; (2.) an order that the defendants should sell the said card and all rights and benefits attached thereto and hand over the proceeds to the plaintiff for distribution amongst the creditors of the insolvent.

The trial judge (Kemp J.) dismissed the suit, subject however to an order on the defendants to sell the insolvents card, or right of membership, and apply the proceeds in payment of those creditors who were members of the Association, any surplus to belong to the Association.

An appeal by the Official Assignee was heard by Beaumont C.J. and Blackwell J. and was dismissed. The appeal is reported at I. L. R. 55 B. 623.

1932. De Gruyther K.C. and Stable for the appellant. Under the rules of the Association the insolvent had (1.) a personal right, and (2.) a proprietary interest. So far as the rules result in forfeiture of the personal right they are valid, but the proprietary interest represented by the proceeds of the card vested in the Official Assignee. If upon the true construction of the rules the proceeds of sale of the card were distributable among the Association creditors to the exclusion of the general body of creditors (which the appellant denies), the rules were to that extent contrary to the law of insolvency and to s. 12 of the Transfer of Property Act, 1882. The insolvency, and therefore the vesting in the Official Assignee of the proprietary interest in the card, dated back to before the insolvent was declared a defaulter. There was a right under rule 62 to have a sale, the rule being valid to that extent. The rules differentiate this case from In re Plumbly. (( 1880) 13 Ch. D. 667.) [Reference was made to Borlands Trustee v. Steel Brothers & Co., Ld. ([ 1901] 1 Ch. 279.) ; Whitmore v. Mason (( 1861) 2 J. & H. 204.) ; Wilson v. United Counties Bank ([ 1920] A. C. 102.); In re Farrows Bank ([ 1921] 2 Ch. 164.) ; Ex parte Warder. (( 1872) 21 W. R. 51.)]

Upjohn K.C. and Jinnah for the respondents. Having regard to the nature of the Association and the rules governing membership the insolvent upon being declared a defaulter had no proprietary interest. It is true that the title, if any, of the appellant related back to a date earlier than the default, but no proprietary interest vested save such as the insolvent had under the rules, and he had no such interest. The decision in In re Plumbly (1) is applicable. Sect. 12 of the Transfer of Property Act cannot be applied to the facts of this case.

De Gruyther K.C. replied.

May 6. The judgment of their Lordships was delivered by

LORD BLANESBURGH. This is an appeal from a decree of the High Court at Bombay of September 30, 1930, made in its appellate jurisdiction, dismissing an appeal of the appellant from a decree of the same Court of March 19, 1930, made in its original civil jurisdiction. The main question for determination is whether a card or right of membership of one Virji Madhavji in the Bombay Native Share and Stock Brokers Association or the proceeds of sale the