RAMESHWAR SWARUP Vs. SURAJMAL SHYAM SUNDER

JUDGEMENT

(1.) THESE are 8 connected appeals arising out of two insolvency petitions filed by two creditors against the same debtor. The facts briefly stated are as follows: two persons Govind Ram and Gopal Das carried on a business of supplying goods to order at farrukhabad under the name and style of Ram Swarup Govind Ram. They set out to swindle a large number of persons in different places by pretending to be able to supply a large stock of various commodities. They would offer to supply goods against payment of 50 per cent. of the price which was to be paid against Railway Receipts of the goods on condition that the balance of 50 per cent, was to be paid as and when the goods were sold by the consignees. This being a very tempting offer, attracted many persons who on getting Railway Receipts paid various amounts of moneys to Govind Ram and Gopal Das. It, however, turned out that the railway Receipts were bogus as they were not in respect of any real goods. When the customers discovered the fraud, they rushed to the criminal Court and obtained orders for freezing of the money paid by them to these persons and later on two sets of creditors filed insolvency petitions against them. These were petitions Nos. 1 and 2 of 1950. Ultimately Govind Ram and Gopal Das were declared insolvents by an order dated 8-9-1950. The Official Liquidator was appointed Receiver of the assets of the insolvents and he seized various amounts lying to the credit of the insolvent firm in several Banks. Thereupon five sets of creditors applied to the insolvency Court under Section 4, Provincial insolvency Act that certain amounts specified in their applications which formed part of the amounts seized by the Official Receiver in the Banks may be declared to belong to them and not to the insolvents or in any case a charge may be declared in their favour in respect of the aforesaid amounts over the assets of the insolvents in the hands of the Official Receiver. The Official Receiver objected to the claims on the ground that the money which he had seized was in the account of the insolvents and was the money of the insolvents and could not be claimed by the claimants. The Insolvency Court allowed the claims of Messrs. Mahadeo Lal ram Kumar, Seth Tara Chand and others, Messrs. Surajmal Shyam Sundar and Messrs. Ram desh Lachmi Narain and it was ordered that the money which they had paid to the insolvents and which was traceable in the accounts of the insolvents in the various Banks be paid over to them as it belonged to them and not to the insolvents. But the claims of K. Raja Gopal-Pillai were disallowed. Both K. Raja Gopal Pillai and the Official Receiver appealed against the decision of the Insolvency Court. The learned District Judge allowed the appeal of K. Raja Gopal Pillai and declared that he should have a charge for the amount of Rs. 8000/-and Rs. 8500/- claimed by him over the assets of the insolvents and dismissed the appeal of the Official Receiver. The Official Receiver has new come up in second appeals against these orders.

(2.) SECOND Appeal No. 4 of 1953 is against Surajmal Shyam Sunder, S. A. No. 6 of 1953 is against Seth Tarachand and others, S. A. Nos. 7 and 11 of 1953 are against Messrs. Ram Desh lachmi Narain and S. A. No. 9 of 1953 is against Firm Mahadeolal Ram Kumar. Appeals Nos. 7 and 11 of 1953 refer to the very same claim. In all these five appeals the Courts below had declared that the amounts claimed by the claimants belonged to them. Appeals Nos. 5, 8 and 10 of 1953 are against K. Raja Gopal Pillai. Appeals Nos. 8 and 10 of 1953 are with reference to one and the same claim in respect of Rs. 8500/- and the other appeal no. 5 of 1953 is in respect of the claim for Rs. 8000/ -.

(3.) THE necessary facts in appeals Nos. 4, 6, 7, 9 and 11 are common. In all these cases what happened was that as against the bogus Railway Receipts sent by the insolvents to the various claimants Hundies were drawn by the insolvents and the claimants paid the amounts of the hun-dies through Bank and they were credited to the amounts of the insolvents with the Bank. After the payments were made and credited to the insolvents' account there were no withdrawals by the insolvents. There was some amount of the insolvents also in the account so that in all these cases the amount in deposit to the insolvents' credit was larger than the amount paid by the claimants and since there had been no withdrawal after the amounts paid by the claimants had been deposited in the insolvents' account, the Courts below held that the amounts could be traced and identified. In the case of K. Raja Gopal Pillai what had happened was that after he had paid in the two sum, of Rs. 8000/- and Rs. 8500/- on the basis of Hundies drawn by the insolvents in lieu of the bogus railway Receipts and after these amounts had been credited in the insolvents' account in the bank, the insolvents had withdrawn large amounts from the Bank and the balance at their credit at the time when the amount was seized by the Official Receiver was less than the amounts paid by him to the account of the insolvents. In the former group of cases the Courts below held that the amount paid by the claimants could be identified and therefore those amounts were ordered to be paid over to the claimants, but in the case of K. Raja Gopal Pillai, the lower appellate Court held that the amount could not be clearly identified because it was mixed up by the insolvents with their own money and a charge was declared in his favour over the assets of the insolvents.