IN THE HIGH COURT OF ALLAHABAD
B. D. Agarwal, J.
GAJRAJ SINGH - Appellant
Versus
OFFICIAL RECEIVER - Respondents
S. A. F. O. 29 Of 1976
Decided On : 12/09/1983
INSOLVENCY - TRANSFER OF PROPERTY - LIMITATION FOR ANNULMENT OF TRANSFER - SECTION 53 OF THE PROVINCIAL INSOLVENCY ACT, 1920 - ARTICLE 137 OF THE LIMITATION ACT, 1963 - APPLICATION TO ANNUL TRANSFER UNDER SECTION 53 OF THE PROVINCIAL INSOLVENCY ACT IS GOVERNED BY ARTICLE 137 OF THE LIMITATION ACT - LIMITATION PERIOD OF THREE YEARS FROM THE DATE OF ADJUDICATION OF INSOLVENCY.
Fact of the Case:
An insolvent, Genda Singh, transferred his land to Gajraj Singh by way of gift on February 26, 1966. Genda Singh was adjudged insolvent on April 16, 1968, and the Official Receiver was directed to take possession of his properties. The Official Receiver applied to annul the gift deed on April 26, 1972, under Section 53 of the Provincial Insolvency Act, 1920.
Finding of the Court:
The court held that the application of the Official Receiver under Section 53 of the Provincial Insolvency Act was barred by limitation. The court found that Section 53 does not provide a period of limitation within which the transfer may be sought to be annulled, but that Article 137 of the Limitation Act, 1963, applies to any application filed under any Act to a Civil Court for which no period of limitation is provided elsewhere. The court held that the limitation period of three years under Article 137 commenced from the date of adjudication of insolvency, which was April 16, 1968, and that the application made by the Official Receiver on April 26, 1972, was beyond the limitation period.
Issues: Whether the application of the Official Receiver under Section 53 of the Provincial Insolvency Act was barred by limitation.
Ratio Decidendi: The court held that Article 137 of the Limitation Act, 1963, applies to any application filed under any Act to a Civil Court for which no period of limitation is provided elsewhere. The court found that Section 53 of the Provincial Insolvency Act does not provide a period of limitation for the annulment of a transfer, and that therefore the limitation period of three years under Article 137 applies. The court held that the limitation period commenced from the date of adjudication of insolvency, which was April 16, 1968, and that the application made by the Official Receiver on April 26, 1972, was beyond the limitation period.
Final Decision: The appeal was allowed, the order dated September 27, 1973, was set aside, and the application of the Official Receiver under Section 53 of the Provincial Insolvency Act was dismissed.
( 1 ) THIS is an appeal under the second proviso to Section 75 (1) of the Provincial Insolvency Act, 1920.
( 2 ) ONE Genda Singh presented a petition on November 6, 1967 under Section 10 (13) of the provincial Insolvency Act, 1920, to be adjudged an insolvent. The petitioner is dead. Respondent no. 4, the daughter, is his legal representative. Respondents Nos. 2 and 3 are the creditors concerned. The petitioner was adjudged insolvent on April 16, 1968 under Section 27 of this act. A direction was given to the Official Receiver, Bulandshahr, to take possession of his properties. The Official Receiver got attached the land in dispute of which the insolvent had been a bhumidhar. On February 26, 1966 this land had been transferred by Genda Singh under an instrument of gift to Gajraj Singh, the appellant. The gift deed was registered on March 10, 1966. Gajraj Singh filed art appeal under Section 68 against the direction to the Official Receiver to take possession of his land. This was allow ed by the Insolvency Judge. The Official Receiver thereafter made an application under Section 53 on April 26, 1972 to annul the abovementioned deed of gift. This was opposed by Gajraj Singh on the ground that the application was barred by limitation and that the transfer by gift in his favour had been made in good faith and also that the order of adjudication of insolvency was collusive. The Insolvency Judge recorded the finding that there was no collusion and there was no bar of limitation to the application made by the official Receiver. The transfer was not for consideration. The application of the Official receiver was accordingly allowed on September 27, 1973 and in appeal preferred under Section 75 (1) by Gajraj Singh, the transferee, that decision was affirmed. Aggrieved, Gajraj Singh has filed this appeal before this Court under the second proviso to Section 75 (1 ).
( 3 ) THE sole question raised in the appeal before me is whether the application of the Official receiver under S. 53 dated April 26, 1972 was barred by limitation Section 53 reads as follows: "any transfer of property not being a transfer made before and in consideration of marriage or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration shall, if the transferor is adjudged insolvent on a petition presented within two years after the date of the transfer, be voidable as against the receiver and may be annulled by the Court. "
( 4 ) THERE is no dispute that the gift is not a transfer for valuable consideration, Genda Singh was adjudged insolvent on his petition presented on November, 6, 1967 which was within two years of the deed of gift dated February 26, 1966 and registered on March 10 1966. Section 53, it is not disputed any longer, does not in itself proved a period of limitation within which the transfer may be sought to be annulled. But will that mean that an application to annul a transfer can be made at any time without any rule of limitation being observed? If that were the position under the law it would keep a transfer in the state of perpetual uncertainty and that cannot obviously be the intention behind. The answer to this is furnished clearly in my view by Article 137 of the schedule to the Limitation Act, 1963.
( 5 ) ARTICLE 137 provides limitation of three years for an application for which no period of limitation is provided else- where in the particular division contained in the Schedule. The period commences from the date when the right to apply accrues. This provision came up for interpretation before the Supreme Court in the Kerala State Electricity Board v. T. P. Kunhaliumma (1976) 4 SCC 634 : (AIR 1977 SC 282 ). The conclusion reached was that Article 137 will apply to any application filed under any Act to a Civil Court. The application need not be under the Civil P. C. for that matter. The view taken to the contrary earlier by the Supreme court in (Athani) Town Municipal Council case (1969) 1 S
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