NAGENDRA NATH SHAH Vs. RANJIT KUMAR GANGULI

JUDGEMENT

(1.) This is an appeal from an order dated 9th January, 1962 of the Additional District Judge, Alipore, 24-Parganes arising out of certain insolvency proceedings. The short facts of the case are as follows :

(2.) On or about 12th March, 1951 one Nagendra Nath Saha (hereinafter referred to as the debtor) was adjudged insolvent on his own application. Subsequently, on 16th June, 1955, the order of adjudication was annulled and by a further order dated 29th July, 1955 made under Section 37 of the Provincial insolvency Act the properties of the debtor were ordered to be vested in the Official Receiver. Subsequently upon an application of the Official Receiver the learned Additional District Judge authorised him to sell premises Nos. 41 and 42, Scott Lane, Calcutta in order that the sale proceeds could be distributed among the creditors. The learned Judge gave certain directions regarding advertisement of the auction sale and empowered the Official Receiver to take all necessary steps in the matter of bringing the properties to sale. There was also a direction that a copy of the order shall be served on the insolvent for his information and the sale was to take place at the court sale room. The properties were put to saia on 14th June, 1951 and the highest bidder was one Anil Kumar De who made a bid for Rs. 40,000/11/-, The learned Judge declared this bid as adequate and accepted it; On 28th June, 1951, the debtor who is the appellant in this appeal filed a petition under Section 4 of the Provincial Insolvency Act before the learned Judge praying that the sale held on 14th June, 1961 should be set aside. The application was heard upon notice to the Official Receiver as well as to the auction purchaser. On 9th January, 1962 the learned Judge passed an order dismissing the application of the petitioner appellant and also, at the same time, confirming the sale. The present appeal is against this order of the learned Judge. The appellant's main contention is that the finding of the learned Judge who did not deal with the application upon the merits of the case and dismissed it on the preliminary ground, that the application was not maintainable under Section 4 of the Provincial Insolvency Act is wrong. It is clear from the order of the learned Judge that he was of the opinion that since the properties of the debtor had vested in the Official Receiver the debtor had no subsisting interest in the property and could not be a person aggrieved by the sale of the same.

(3.) I have no doubt that the learned Judge is manifestly wrong in his finding as to the legal position of an insolvent after the order of adjudication has been annulled and the properties of the insolvent vested either in the Official Receiver or in some other person. The learned Judge relies upon the case of Ahmed Mohammad Paruk v. Issur Mohan Gopal Jew, 44 Cal WN 665 but overlooks the fact that in the same decision there are passages which | indicate in unmistakable terms that even though the property is vested in the Official Receiver or in a trustee the insolvent has a subsisting interest in the property. The vesting order is usually passed in order that the properties or the debtor may become available for the satisfaction of the debts of the creditors. But after the assets have been realised and applied in liquidation of the debts if any surplus remains outstanding that surplus will certainly revert to the debtor. In fact, the debtor's interest in the surplus is so substantial that he can dispose of or assign his interest in the surplus either by will or by deed. Therefore, if the properties of a debtor which are vested in a trustee by an order of insolvency court are sold out at an undervaluation the debtor is unquestionably aggrieved by such an act. It is, therefore, not correct to say that he is not a person who can be aggrieved by an act of the trustee. This, in fact, is the real ratio of the decision reported in 44 Cal WN 365 to which I have just referred. But though the debtor has interest in the properties, his interest does not permit him to meddle with the administration of the same. He cannot be heard to say that the properties would have been administered better by the Official Receiver or trustee or that the properties, if sold in a different manner, would have fetched a higher price. All these are matters of administration regarding which he has no locus standi at all. But the debtor can certainly complain if in selling the properties or in collecting the assets the Official Receiver or Trustee acts fraudulently or illegally or in excess of the authority given to the Trustee by the Insolvency Court. Subject to this limitation the Trustee's discretion is unfettered and the debtor has no right either to interfere or to complain against the costs of the Trustee.