PUNJAB & HARYANA HIGH COURT
Ranjit Singh Sarkaria, J.
Durga Dass
Versus
F.Balak Ram
Execution Second Appeal No. 1553 of 1965,
Civil MISCELLANEOUS No. 210 of 1970,
Cross Objection No. 9 of 1966,
Decided On : FEBRUARY 7, 1972
INSOLVENCY - EXEMPTION FROM ATTACHMENT AND SALE - OCCUPATION OF CHOBARA BY LICENSEE - DEEMED TO BE OCCUPATION OF LICENSOR - CHOBARA EXEMPT FROM ATTACHMENT AND SALE UNDER SECTION 60(1)(CCC) OF THE CODE OF CIVIL PROCEDURE.
Fact of the Case:
An insolvency petition was filed against a contractual partnership firm, Balak Ram Mehar Chand, and its partners, Mukhi Ram Thakar Dass and Amrit Lal. The firm and its partners were adjudicated insolvent on July 24, 1959, and Ramesh Chand Sood was appointed as the official receiver. During the insolvency proceedings, a creditor, Durga Dass, filed an application alleging that the official receiver had failed to take possession of all the assets of the insolvents, including a shop and a chobara attached to the residential building of the insolvents.
Finding of the Court:
The lower appellate court held that the shop was not in the occupation of the debtors and was, therefore, not exempt from attachment and sale. However, it held that the chobara was in the occupation of the debtors, albeit through a licensee, and was, therefore, exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure.
Issues: 1. Whether the shop was in the occupation of the debtors and, therefore, exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure. 2. Whether the chobara was in the occupation of the debtors and, therefore, exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure.
Ratio Decidendi: 1. The court held that the shop was not in the occupation of the debtors because it was in the possession of tenants. Therefore, it was not exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure. 2. The court held that the chobara was in the occupation of the debtors, albeit through a licensee. The court reasoned that the occupation of a licensee is deemed to be the occupation of the licensor. Therefore, the chobara was exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure.
Final Decision: The court dismissed the appeal and upheld the order of the lower appellate court.
1. This execution second appeal is directed against an order, dated 23rd April, 1965, of the District Judge, Hoshiarpur. It arises out of these facts: Firm Balak Ram Mehar Chand were a contractual partnership, Mukhi Ram Thakar Dass and Amrit Lal were its partners. They were adjudicated insolvents on 24th July, 1959, by the insolvency Judge, Hoshiarpur, Ramesh Chand sood was appointed as the official receiver. On 21st May, 1963, Durga Dass, one of the creditors, made an application in the insolvency Court alleging that the official receiver was amiss in the discharge of his functions in as much as he had failed to take possession of all the assets of the insolvents. It was further averred that the insolvents had a big building at Hoshiarpur and that the official receiver should be directed to sell that property for the benefit of the creditors.
2. The insolvents resisted the application and pleaded that they had no assets excepting the main residential building which was exempt from sale under Section 60(1)(ccc) of the Code of Civil Procedure. The only point which was argued before the lower appellate Court on behalf of the creditors was, that one shop and one chobara above it, belonging to the insolvents though attached to the residential building of the insolvents, were not in their occupation, and, as such were not immune from attachment and sale. The lower Appellate Court found that the shop was in the occupation of tenants named. Lalji Ram Dass, under the insolvents. It, therefore held that it was not in the occupation of debtors, and as such, was available for liquidating the debts of the insolvents. With regard to the chobara, it was held in agreement with the Court of first instance, that though it was in the occupation of one Lachhman Dass yet the latters occupation being that of a licensee must be deemed to be the occupation of the insolvents. It, therefore, upheld the objection of the insolvents that the chobara was exempt from attachment and sale under Section 60(1)(ccc) of the Code of Civil Procedure, Aggrieved by that judgment, the creditor has come in Second appeal to this Court.
3. Cross-objections were also filed by the respondent that by a previous judgment dated February 13, 1959, the insolvency Court had held that the shop in dispute was also exempt from attachment and sale under Section 60(1)(ccc), and that the previous judgment being a judgment in rem, operates as judicata.
4. Civil Miscellaneous 210/C of 1970 was made on December 23, 1969, on behalf of insolvent Amrit Lal by his counsel that Shri Mukhi Ram respondent had died on February 5, 1969 and Thakur Dass had died on September 14, 1968, that the deceased were necessary parties, and that the appeal in consequence had bated as a whole. As regards Civil Miscellaneous 210/C of 1970 it may be observed that the firm Balak Ram Mehar Chand, which was adjudged as insolvent, was a contractual partnership. It had three partners viz., Mukhi Ram, Thakur Dass and Amrit Lal. The firm as such is a respondent in this appeal. Each partner is an agent of the other and the right to continue action against the firm survives as against the surviving partner namely, Amrit Lal. The matter now appears to be concluded by the judgment of the Full Bench in Dharamdas Gokal Dass V/s. Messrs Krishan Chand Hari Chand 67 Punj LR 743=(AIR 1966 Punj 40) (FB) wherein it was held:-
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"That the death of the partner through whom a firm had instituted the suit would not cause abatement of the appeal filed by the firm, when his legal representative had not been impleaded within the prescribed period."
The facts placed before me are in the converse, but the principle remains the same and will govern the instant case, also. I, therefore dismiss Civil Miscellaneous 210/C of 1970 and overrule the first objection raised by Mr. Mittal.
5. The next contention of Mr. Mittal is that the previous judgment, dated February 13, 1959, was a judgment in rem of the Insolvency Court rendered under
Full Bench In Dharamdas Gokal Dass V/s. Messrs Krishan Chand Hari Chand
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