GIRIKANT SHIVLAL PANDYA Vs. VADILAL VRIJLAL SHAH

JUDGEMENT

(1.) THIS is a second appeal from the decision of the District Judge of Ahmedabad and it raises a point on which there has been a certain amount of difference of judicial opinion, the question being whether what is known as the rule in Cohen v. Mitchell (1890) 25 Q. B. D. 262 in English Bankruptcy Law applies to cases arising under the Provincial Insolvency Act (V of 1920.)

(2.) THE relevant facts are that a petition in insolvency was presented on June 23, 1931, and receivers were appointed, the insolvent was adjudicated on March 10, 1932, and on April 19, 1932, the receivers gave a notice to the insolvent calling upon him to pay Rs. 1,600 which he had earned as salary after the presentation of the insolvency petition. It appears from the judgment of the learned First Class Subordinate Judge of Ahmedabad, who heard the application in the first instance, that of the Rs. 1,600, Rs. 200 were earned after adjudication. THE learned Subordinate Judge held that the whole of the Rs. 1,600 were assets in the insolvency, but that the receivers were entitled to a half only of the earnings, having regard to the provisions of Section 60 of the Civil Procedure Code. In appeal the learned District Judge seems to have treated the whole of the Rs. 1,600 as after-acquired property falling within the provisions of Sub-section (4) of Section 28 of the Provincial Insolvency Act, 1920, and he was of opinion that the rule in Cohen v. Mitchell applied. Now that rule is that property acquired by the insolvent after adjudication does not vest in the trustee in bankruptcy unless and until the trustee intervenes, and the learned District Judge therefore referred the case back to the lower Court in order to determine whether any part of the Rs. 1,600 had been disposed of by the insolvent before the receivers intervened.

(3.) THE learned District Judge has held on the authority of the ruling in Nagindas Bhukhandas v. Ghelabhai Gulabdas (1919) I. L. R. 44 Bom. 673 : s. c. 22 Bom. L. R. 322 that the rule in Cohen v. Mitchell (1890) 25 Q. B. D. 262 applies, and that in spite of the plain meaning of the words used in Section 28 (4) of the Provincial Insolvency Act of 1920, the property acquired by the insolvent after the date of the order of adjudication vests in the receiver only when the receiver intervenes. THE case in Nagindas Bhukhandas v. Ghelabhai Gulabdas was decided in 1919. Subsequent to that decision the legislature enacted Section 28 (4) of the Provincial Insolvency Act of 1920 in exactly the same words as Section 16 (4) of the Provincial Insolvency Act of 1907, in spite of the attempts which the Court had made to get away from the plain meaning of the words of Section 16 (4) of the Act of 1907, by interpreting it in the light of the rule in Cohen v. Mitchell. In my opinion the only inference which can be drawn from this is the one drawn in Ma Phaw v. Maung Ba Thaw (1926) I. L. R. 4 Ran. 125 viz. , that the insertion of the word "forthwith" by the legislature in Section 28 (4) was to sweep away the Court's attempts to postpone the vesting. This view is confirmed by the decision of the Privy Council in Kala Chand Banerjee v. Jagannath Marwari (1927) L. R. 54 I. A. 190 : s. c. 29 Bom. L. R. 882 in which it was held that the meaning of Section 16, Sub-section (4), of the Provincial Insolvency Act of 1907 was perfectly clear, and that the moment the inheritance devolved on an insolvent who was still undischarged, it vested in the receiver. THE view taken by the learned District Judge appears to me to be wrong, and I agree that the order should be reversed. .