RAMANLAL MANILAL BHATT Vs. MANILAL LAXMICHAND

JUDGEMENT

(1.) LALLUBHAI Jesangbhai, father of respondents Nos. 2 to 5 and husband of respondent No. 6, was running the business of a ginning factory at Dabhoi in the Distriet of Baroda. After the death of Lallubhai the Business was continued by his sons and his widow. One. Muljibhai and respondents Nos. 2 to 5 were the sons of Lallubhai. It appears that for the purpose of the business deposits were taken from diverse persons. A deposit of Rs. 10,000 was taken from one Manilal Laxmichand and at the foot of the account of that deposit Rs. 8,234-6-0 with interest remained due. On 21-8-1953, the creditor demand ed his dues from Muljibhai Lallubhai who was acting as manager of the business. Alleging that after the notice was served Muljibhai stopped payment and thereby committed an act of insolvency, the creditor Munilal Laxmichand applied to the Insolvency Court at Baroda for adjudicating Muljibhai, his four brothers and Bai Ujjam - widow of Lallubhai - as insolvents. That application was resisted by Mulji bhai and respondents Nos. 2 to 6. The learned Judge of the Insolvency Court on 6-9-1954 adjudicated Muljibhai an insolvent and dismissed the application against respondents Nos. 2 to 6. The learned Judge however, proceeded to pass an order direct ing that the right of Muljibhai to alienate the joint family properties including the share of respondents Nos. 2 to 6 for the debts contracted by the joint family firm shall vest in the Receiver in insolvency along with the separate property and undivided share of Muljibhai in the joint family property.

(2.) AGAINST the order two appeals were preferred to the District Court at Baroda. Appeal No. 164 of 1954 was filed by respondents Nos. 2 to 6 to this petition, i. e, the four sons of Lallubhai other than Muljibhai and Bai Ujjam widow of Lalluhbai. By that appeal they challenged the order of the Insolvency Court vesting in the Receiver the right of Muljibhai to alienate joint family properties including their share. Muljibhai filed Appeal No. 165 of 1954 challenging the order of adjudication. These two appeals were heard by the Assistant Judge at Baroda. The learned Judge dismissed Appeal No. 165 of 1954 and allowed Appeal No. 164 of 1954 and deleted that part of the order of the trial Court which vested in the Receiver Muljibhai's right to alienate the joint family properties including the share of Lallubhai's sons other than Muljibhai and of the widow of Lallubhai for the debts contracted by the joint family firm, and substituted a clause whereby the separate property of Muljibhai and his undivided interest in the joint family property vested in the Receiver. Against the order passed in Appeal No. 164 of 1954 the Receivers in insolvency have applied to this Court in revision. It may be observed that the order dismissing the application against the sons of Lallubhai other than Muljibhai and the widow of La llubhai for adjudicating them insolvents has become final, no appeal having been preferred to the District Court against that order.

(3.) IN this revision application, Mr. Chhatrapati on behalf of the Receivers in insolvency has con tended that the Assistant Judge was in error in holding that the right of Muljibhai, as manager of the joint family, to dispose of property of the joint family to satisfy debts binding upon the family, had not vested in the Receivers. In order to appreciate this argument certain provisions of the Provincial In solvency Act, 1920, by which the proceedings in in solvency are governed may be referred to.