KISHAN GOPAL Vs. SURAJ MAL

JUDGEMENT

(1.) THIS is a miscellaneous appeal by Kishan Gopal and four others against an order of adjudication passed by the District Judge, Kotah, dated the 20th August, 1960, in an insolvency matter, and raised an interesting question of law as to whether all the members of a joint Hindu trading family can be adjudicated as insolvents irrespective of the consideration whether their liability to discharge the family debts is personal or not.

(2.) THE material facts may be shortly stated as follows : Appellants Nos. 1 to 3 are the sons of one Bhanwarlal, and the letter's remaining son Kunwar Lal has been impleaded as respondent No. 18 in this appeal. Appellants Nos. 4 and 5 are the sons of Kunwar Lal. Bhanwarlal died during the pendency of this litigation in the trial Court. Respondent Surajmal and certain others moved an application against the appellants and Kunwar Lal and Bhanwarlal in the Court of the District Judge, kotah, alleging that the latter carried on a joint Hindu family business in the name of M/s. Ganeshram Bhanwarlal in the town of Kotah, that the said Kunwar Lai was the managing member thereof, that they were indebted to the respondents and certain other creditors, the total indebtedness amounting to Rs. 1,85,000/-, that they were unable to pay their debts and had committed certain acts of insolvency which were set forth in paragraph 4 of the application, and consequently, they prayed that the appellants here and Kunwar Lal and Bhanwarlal, be adjudicated as insolvents. Among certain alleged acts of insolvency reference may be made to the allegation that the debtors finding themselves unable to pay their debts and in order to make a settlement with their creditors, entered into a so-called composition deed (Ex. 4) on 8th June, 1956, by which they agreed to hand over to a board of trustees all the family properties which were set out in a schedule annexed to the deed and it was further agreed between the parties thereto that the said trustees would collect all the assets due to the joint family and distribute them among the various creditors in complete satisfaction of their debts and the latter would so accept them. It was, however, alleged that this arrangement fell through and was not given effect to by the debtors.

(3.) THIS application was opposed on behalf of the debtors and the principal contention raised was that there were two shops of the name Ganeshram bhanwarlal one of which was situate in mohalla Nayapura in the town of Kotah and respondent Bhanwarlal was the sole proprietor of that business, while the other shop was situate in mohalla Rampura and respondent Kanwar Lal was its sole proprietor, and that the remaining members of the family had no connection with the family debts. It was also, contended that the debtors had not committed any act of insolvency, and that the composition deed referred to above had been procured from them by coercion. The learned District Judge gave his findings on all the aforesaid points raised on behalf of the appellants adversely to them and passed his order dated the 20th of August, 1960, allowing the application of the respondent-creditors and adjudicated the appellants and Kanwar Lal as insolvents. So far as Bhanwarlal was concerned, as he had died during the pendency of the proceedings before the trial Court, no order was passed against him. The learned judge also appointed a Receiver for collecting the entire assets of the insolvents.