SAIYEDA HAFEEZUNNISSA BEGUM Vs. RAI CHOTAY LAL

JUDGEMENT

(1.) THE appellant before us is the purchaser of properties from a debtor governed by the Hyderabad Jagirdars Debt Settlement Act. It is common ground that the sale in favour of the appellant took place during the pendency of the application under section 11 of the aforesaid Act. It is also clear that there was no award under the Act at that time. We may take it to be fully established in the case that the appellant is a bona fide purchaser for value. THE Board has found the alienation in favour of the appellants to be bad because of the failure to comply with the provisions of section 44 of the Act, but Mr. Jehangir Ali on behalf of the appellant has argued that the aforesaid section applies only after an award has been made and till then the Court is bound to proceed under section 32 of the Act. For properly deciding this appeal, we would quote in extenso the two relevant provisions :-

(2.) IF we were to accept the argument of the learned counsel, the provision in section 44 about Government's sanction for alienation by a debtor, who was a party to a proceeding, would be meaningless. A reasonable interpretation, therefore, of the section is that any alienation by a debtor during the proceeding because of an application under section 11 of the Act must be with the sanction of the Government in order to be operative. That would also be the position after the award is made. It would follow that the provisions of section 32 are meant for such alienations as are made to defraud creditors before the proceedings under the Act are started. The two sections would therefore have different fields of operation. Fraudulent transactions before the proceedings would be voidable if they are brought to the notice of the Board during the pendency of the proceeding and subject to there being no bona fide purchaser for value to sustain the alienation. Transfer during the pendency would be governed by section 44, though there had not yet been an award. It follows that the order of the Jagirdars Debt Settlement Board is correct. It is a sad case and the appellant may well approach the authority to grant her the necessary sanction on the authority being satisfied about the justice of her case. In these circumstances we dismiss the appeal with liberty to the appellant to apply to the proper authorities for the necessary sanction. Appeal dismissed.