PIYARE LAL GOBIND RAM Vs. RAM LAL

JUDGEMENT

(1.) THE question for determination in this appeal of the creditors is whether the property in suit belonging to the insolvents is exempt from sale under the provisions of Sub -section (5).of Section 28 of the Provincial Insolvency Act, 1920.

(2.) IN a creditors' petition presented on 22nd of November 1956 Ram Lal and Banwari sons of Kalu Ram, Mathura Dass son of Ram Lal and Jagan Nath son of Banwari Lal proprietors of the firm Jahangiri Mal -Kalu Ram were adjudicated insolvents on 19th of November, 1956, and this order was affirmed by the appellate Court on 6th of June, 1958, in an appeal preferred by the insolvents. Besides other properties of the insolvents, the building in dispute consisting of a residential portion and a shop were attached. The insolvents objected to this attachment on the ground that the property which is meant for distribution among the creditors excludes under the provisions of Sub -section (5) of section 28 of the Provincial Insolvency Act, the property of the insolvent......which is exempted by the Code of Civil Procedure, 1908. or by any other enactment for the time being in force from liability to attachment and sale in execution of a decree. Now, under Clause (ccc) added to Sub -section (1) of Section 60 of the Code of Civil Procedure, by a Punjab amendment "one main residential house and other buildings attached to it (........and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to a judgment -debtor other than an agriculturist and occupied by him........." shall be exempt from attachment. The Insolvency Judge upheld the objection of the insolvent only partially by allowing exemption with regard to the residential portion of the building and held that the shop being a separate and distinct unit and not a residential property does not enjoy immunity from attachment. From this order, an appeal was taken by the insolvents and it has been held by the learned District Judge, Hissar, that the entire building is exempt from attachment under Clause (ccc) of Sub -section (1) of Section 60 of the Code of Civil Procedure as amended in the Punjab. It is from this order that an appeal has been preferred by the creditors of the insolvents and the Official Receiver, Hissar.

(3.) IN support of the second contention Mr. Puran Chand has relied on a Division Bench authority of the Calcutta High Court of Fletcher and Shamsul Huda, JJ. in Bhut Nath Chatterjee v. Biraj Mohini Debi,, A. I. R. 1919 Cal. 192 in which it was held that "a transfer made by an insolvent of a portion of his property to his wife within two years prior to his insolvency the transfer not being made before and in consideration of the marriage or in favour of a purchaser or encumbrancer in good faith and for valuable consideration, is ipso facto void as against the Official Receiver and the property comprised in the transfer is liable to be distributed amongst the general body of creditors." It is contended that the gift of the suit property cannot revert either to the donee or the insolvents. Section 28 of the Provincial Insolvency Act mentions the effects of an order of adjudication and it is stated in Sub -section (2) that "on the making of an order of adjudication, the whole of the property of the insolvent shall vest in the Court or in a receiver as hereinafter provided and shall become divisible among the creditors." In this sense the | property of the insolvents becomes available for division among the creditors. The ruling of the Calcutta High Court in fact says nothing more than what is expressly provided for in Sub -section (2) of Section 28 of the Provincial Insolvency Act. Sub -section (5) of Section 28 however provides that the property of the insolvent for the purposes of this section shall not include any property which is exempt by the Code of Civil Procedure from attachment and sale. In view of this statutory provision there is no room for the contention of Mr. Puran Chand that the exemption cannot be claimed in respect of the suit property on the ground that it is available only for the benefit of the creditors.