1954 Supreme(Pat) 26
PATNA HIGH COURT
Imam and K.Sahai JJ.
Dharamnath Prasad
Versus
Surji Devi
Appeal From Original Order No. 236 of 1953 ;
Decided On : FEBRUARY 12, 1954
An ad interim receiver appointed under Sec.20 of the Provincial Insolvency Act cannot be directed to take possession of the joint family property of an undivided Hindu family governed by the Mitakshara law merely because one of its members, although the manager or karta, is being proceeded against for an act or acts of insolvency.
Headnote:
INSOLVENCY - AD INTERIM RECEIVER - JOINT FAMILY PROPERTY - POWER OF RECEIVER - Sec.20, 28-A, 4, Provincial Insolvency Act.
Fact of the Case:
An application was made by a creditor under the Provincial Insolvency Act for adjudicating the opposite parties as insolvents. The applicant also prayed for the appointment of an ad interim receiver to take charge of the property of the opposite party. An interim receiver was appointed, but when the question came up of taking possession of the property of the opposite party, the minors put in an objection to the receiver taking possession of their share of the joint family property. The District Judge dismissed the objections raised by the minors.
Finding of the Court:
The court held that the ad interim receiver could not take possession of the joint family property of an undivided Hindu family governed by the Mitakshara law merely because one of its members, although the manager or karta, is being proceeded against for an act or acts of insolvency.
Issues: Whether an ad interim receiver appointed under Sec.20 of the Provincial Insolvency Act could be directed to take possession of the joint family property of an undivided Hindu family governed by the Mitakshara law merely because one of its members, although the manager or karta, is being proceeded against for an act or acts of insolvency.
Ratio Decidendi: The court held that Sec.20 of the Provincial Insolvency Act gives the power to the Court to appoint an ad interim receiver of the property of the debtor only, and that express provision cannot be avoided by having resort to the provisions of Section 4 of the Act. It was also held that under Sec.20 of the Act an ad interim receiver has only such powers as a receiver appointed under the Code of Civil Procedure.
Final Decision: The appeal was allowed with costs and the order of the District Judge directing the receiver to take possession of the joint family properties of the appellants was set aside.
Imam, J.
1. This is an appeal against the order of the District Judge of Darbhanga made in an insolvency proceeding. An application was made by the creditor, Mt. Surji Devi, under the Provincial Insolvency Act hereinafter referred to as the Act for adjudicating the opposite parties 1 to 5 of the application insolvents. Opposite parties 6 to 10 of the application were minors and there was no prayer to make them insolvents. The applicant further prayed for the appointment of an ad interim receiver to take charge of the property of the opposite party with a view to safeguarding her interest and that of the other creditors. An interim receiver was appointed, but when the question came up of taking possession of the property of the opposite party the minors put in an objection to the receiver taking possession of their share of the joint family property. The District Judge dismissed the objections raised by the minors. Hence the present appeal.
2. To decide the question arising in this appeal the provisions of Sec.20 of the Act have to be considered and those of Sec.28-A of the Act. But before that is done one has to consider the preliminary objection raised on behalf of the respondent that the appeal is not maintainable in view of the provisions of Section 75, Sub-section (3) of the Act. It was contended that as the order passed by the District Judge is not one of those specified in Schedule I to the Act, under Sub-section (3) of Section 75 of the Act an appeal to this Court from the order of the District Judge could only be by the leave of this Court. The present appeal was admitted by the Registrar and was unaccompanied by any application to this Court for leave to appeal against the order of the District Judge. Reliance was placed upon the plain words of Sub-section (3) of Section 75 of the Act as well as on a decision of the Madras High Court.
On the other hand, it was contended on behalf of the appellants that as the appeal had been, admitted, it must be deemed that this Court had given leave to appeal, and in any event, if the circumstances of the case justified the course, leave could be granted at the hearing of the appeal itself. Reliance was placed upon the case of Gopal Ram V/s. Magni Ram, AIR 1928 Pat 338 (PB) (A), where Jwala Prasad, J, was of the opinion that there was a good deal of force in the contention of Mr. De that when the appeal had been admitted by the Bench the requisite leave was virtually granted. The appeal had been treated as if leave had been granted and the order of the Court admitting the appeal should be construed as one granting leave. Jwala Prasad, J. further expressed the opinion that even if that was not sufficient he would, after hearing the entire case, consider that sufficient case had been made out by the appellants for obtaining leave to appeal, and his Lordship there and then granted leave to appeal. In the case of -- Mahabir Prasad V/s. Ram Tahal Mandar, AIR 1937 Pat 665 (B), a Division Bench of this Court also dealt with a preliminary objection that the appeal was incompetent inasmuch as the leave of the High Court had not been obtained under Section 75 (3) of the Act. Their Lordships thought that the very fact that the appeal had been admitted by the Court amounted to an indication that if leave had been asked for it would have been granted and that to cure the irregularity, if any, it was enough to state that the case was one in which leave ought to be granted and their Lordships granted the requisite leave to appeal at the hearing of the appeal and relied upon the case of -- AIR 1928 Pat 338 (FB) (A).
In the case of -- Aniruddha Mitra V/s. Official Receiver, Alipur Judges Court, AIR 1942 Cal 241 (C), Mukherjee, J. expressed the opinion that in any event an appeal would lie with the leave of the Court, and that the Court would be prepared to grant such leave if it was necessary.
In the case of -- The Official Receiver, Cuddapah V/s. Mopparapu Subbiah, AIR 1927 Mad 869 (D), it