Effect and nature of vesting of power over son’s shares due to insolvency of Hindu Father.

Judgment.-The material facts are few. One Venkataratnam was adjudged an insolvent in I.P.No.13 of 1923, on the file of the Subordinate Judge of Guntur. He died on 10th December, 1933, leaving behind him three sons. Between 1937 and 1939 the Official Receiver, Guntur, sold some of the properties of the joint family and realised certain moneys. In 1945, a certain Venkatanarasu obtained a decree in S.C.No.60 of 1945, on the file of the Subordinate Judge, Guntur, against the sons of Venkataratnam. After obtaining his decree Venkatanarasu applied in E.A.No.214 of 1945 for the attachment of that part of the money in the hands of the Official Receiver which would represent the share of the sons of Venkataratnam. The Official Receiver then filed his objections in E.A.No.37 of 1946 and prayed for the attachment being raised. The Subordinate Judge allowed the objections of the Official Receiver and raised the attachment. Against that order, Venkatanarasu came to this Court in C.R.P.No.1156 of 1946 which was disposed of on 20th July, 1948. In the order made on that date this Court directed that an enquiry should be made into the character and source of the funds now sought to be attached and claimed to be the property of the judgment-debtor. The matter was remanded for disposal afresh in the light of the observations made in that order.

After the case thus went back to the trial Court this question was gone into and accepting a memo filed by the Official Receiver, the learned Subordinate Judge found that the property sold was the joint family property of Venkataratnam and his sons. He however held that the fund in the hands of the Official Receiver should be utilised in the first instance to pay the debts of Venkataratnam and that the creditors of the sons would be entitled to proceed only against the surplus if any. In that view the E.P. filed by Venkatanarasu was dismissed and the claim petition filed by the Official Receiver allowed. Against that order these two revision petitions have been filed.

The principal argument of Mr.Ramanarasu the learned advocate for the petitioner may be put this way. The insolvency of a father does not by itself disrupt the joint family or bring about a severance in status. If the Official Receiver had not sold the properties of Venkataratnam and his sons those properties would have been joint family properties available for division among Venkataratnam and his sons. The fund into which the properties were converted by the Official Receiver retain the character of the properties from which it arose and must be treated as joint family property and liable to be divided among the sons. Just in the same way as a creditor who has obtained a decree against a son can attach his share in the immoveable properties of the joint family so too he can attach the fund into which those properties have been converted. Mr. Ramanarasu recognised that it is open to a Hindu father to sell the share of his sons in order that he might pay antecedent debts not tainted with illegality or immorality. But he contended that till the money is actually paid over to the creditor it should be treated as an asset of the joint family liable to and available for division. Consequently till the Official Receiver had actually paid out the moneys the fund in his hands continued to retain the character of joint family property and is, therefore, liable to satisfy a decree that has been obtained against the sons.

There is no doubt a considerable amount of logic behind this argument. But it seems to me that if accepted, it would nullify the provisions of sections 28 and 28-A of the Provincial Insolvency Act. On the adjudication of a person as an insolvent, the whole of his property vests in the Court or the receiver under section 28(2) of the Insolvency Act. When the insolvent is a Hindu father the property that would thus vest in the receiver would consist of two heads or categories. One would be the share of the father in the joint family proper

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