IN THE HIGH COURT OF MADRAS
Wadsworth, J.
Sreemanthu Yarlagadda Sivarama Prasad Bahadur Zamindar Garu of Challapalli
Versus
Sri Chelikani Venkatarao and Ors.
Decided On : 27.03.1944
Madras Act 4 of 1938 - Insolvency - Section 19 - Section 6 - Section 10 - Section 21
Fact of the Case:
The appeals arose from applications under Section 19 of Madras Act 4 of 1938, where the appellant, the decree-holder, contested whether the respondents could claim the benefit of the Act due to the insolvency of their fathers. The lower Court's decision was based on a misunderstanding of the law.
Finding of the Court:
The Court found that one father was an undischarged insolvent at the commencement of the Act and the other was a discharged insolvent, leading to different outcomes for the sons' applications under the Act.
Issues: The main issue was whether the respondents could claim the benefit of Madras Act 4 of 1938, considering the insolvency status of their fathers and the division of the family at the commencement of the Act.
Ratio Decidendi: The Court's decision was influenced by the interpretation of Sections 6, 10, and 21 of the Act, which determined the status of the fathers as agriculturists and consequently the status of their sons under the Act.
Final Decision: The Court dismissed one appeal and allowed the other, based on the status of the fathers as agriculturists or non-agriculturists, as determined by their insolvency status and the division of the family at the commencement of the Act.
Wadsworth, J.
1. These two appeals arise out of two connected applications under Section 19 of Madras Act 4 of 1938. The appellant in both cases is the decree-holder. The respondents in A. S. No. 269 were the petitioners in I.A. NO. 595 of 1939 filed in O.S. NO. 52 of 1933. The respondents in A. S. No. 270 were the petitioners in I.A. No. 596 of 1939 filed in O.S. NO. 53 of 1933. Under both decrees, defendant 1 was the father of the present respondents. The question agitated in the Court below was whether the respondents here could claim the benefit of Act 4 of 1938, having regard to the insolvency of their fathers, defendant 1 in each of the two suits. It is common ground that the decision of the lower Court proceeds on a misunderstanding of the law having regard to the rulings of this Court. Defendant 1 in O.S. No. 52 of 1933, father of the respondents in A. S. No. 269 obtained his discharge in insolvency on 24th September 1938. He was, therefore, an undischarged insolvent when Madras Act 4 of 1938 came into force. Defendant 1 in O.S. No. 53 father or the respondents in A. S. No. 270 , obtained his discharge in insolvency on 11th December 1937. He was therefore a discharged insolvent on the date when the Act came into force, but an undischarged insolvent on 1st October 1937, which would have been a relevant date had he himself been applying for the benefits of the Act with reference to Section 10. On 5th April 1939, defendants 2 and 3 in O.S. No. 52 respondents in A. S. No. 269 filed a suit claiming partition from their father and his brother, defendant 1 in the connected matter, alleging that they began to live separately from the year 1924. With reference to Section 6 of Act 4 as interpreted in our decision in Sundaram v. Subbarao A.I.R. 1942 Mad. 402 it becomes a matter of considerable importance whether the fathers of the two sets of respondents were or were not divided on 22nd March 1938 when Act 4 of 1938 came into force. We wish to point out that Clause (1) of Section 10, which makes 1st October 1937 also one of the crucial dates under the Act, refers only to the qualifications of a per-son who himself applies for relief under Sections 8 and 9 , and it will not affect the status of an alleged agriculturist which is of importance only with reference to the application by his sons for relief having regard to the provisions of section 6.
2. In this Court the appellant has prayed for leave to amend his counter affidavit filed in each of the two applications in the Court below, making an assertion that the father of the respondents was a member of an agriculturist undivided family having another branch. These amendments have been allowed subject to the right of the respondents to traverse the allegations therein in suitable pleadings in the lower Court to which we propose to remand the cases. The lower Court has proceeded on the footing that a person who is an insolvent and to whose estate the provisions of Section 21 of the Act would apply is nevertheless an agriculturist, overlooking the words in that section "if he would have been an agriculturist within the meaning of this Act but for his adjudication in insolvency." We have to point out that a person whose estate is vested in the Official Receiver in insolvency cannot, so long as that vesting continues, be deemed to have a saleable interest in that estate. An undischarged insolvent, therefore, normally lacks the basic qualification for the status of an agriculturist under the Act. Section 21, however, applies to the administration of his estate, the same principles which would have applied, had he not been an insolvent and had he still retained a saleable interest in agricultural land, always provided that no dividend has been declared. It seems to us that the effect of the insolvency of the two fathers on the applications preferred by the sons cannot be properly worked out having regard to the provisions of Section 6 of the Act, without a finding on the questio
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