SAHU TOTA RAM Vs. THAKUR BHAGWANT SINGH

JUDGEMENT

(1.) This is an appeal by certain insolvents, who have been granted a conditional discharge under Section 41 (2) (c) of the Provincial Insolvency Act, for the recovery of certain property originally belonging to them but which had been sold by the receiver and which sale was alleged to be void. The facts, briefly stated, are as follows.

(2.) The appellants Tota Ram and Hazari Lal were declared insolvents in the year 1926. An official receiver was appointed who took possession over their properties, the properties vesting in such receiver. Two items of these properties were the properties in dispute. They were revenue paying estates. At the instance of the appellants themselves the property was not sold by the Collector as required by Section 60 of the Provincial Insolvency Act but was sold by the receiver himself in a private manner by means of two sale deeds dated the 34th of October, 1932, to Sarup Singh father of defendant-respondent Th. Bhagwant Singh. The purchaser paid the price and got into pos session after having his name mutated in the revenue papers. All the properties belonging to the appel lants having been sold they applied for discharge in the year 1933. The Court granted discharge on condition that "money in bank or with receiver, i.e., the sale proceeds of properties will be distributed among creditors and that if any property is found within 30 days of to-day to belong to the insolvents, that too will be sold and proceeds divided among the creditors." This order is dated 10th of March, 1934. The amount in deposit in bank or with the receiver was distributed by the receiver and the receiver got his discharge from the Court. No other properties were discovered.

(3.) Ten years later, on 30th September, 1944, the discharged insolvents filed the suit which has given rise to this appeal for possession over the properties which were transferred by the receiver by means of the two sale-deeds dated the 24th of October, 1932, on the allegation that the sales in favour of Sarup Singh being in violation of the provisions of Section 60 of the Provincial Insolvency Act were null and void and that they were entitled to recover possession over the same. They claimed mesne profits as well. The receiver having been discharged was not a party to the suit.