LALJI SAHAY SINGH Vs. ABDUL GANI

JUDGEMENT

(1.) We are invited in this appeal to set aside an order of the Court below under Section 36 of the Provincial Insolvency Act of 1907, by which a transfer made in favour of the appellant by one Nilkamal Bhattacharya, who has now been adjudged an insolvent has been annulled as not made in good faith and for valuable consideration. The circumstances, under which the order has been made, are not the subject of controversy between the parties. On the 29th July 1908, Nilkamal Bhuttacharya transferred the disputed land and house to the appellant Lalji Sahai Singh for a consideration of Rs. 1,250. On the 22 January, 1909, Nilkamal made an application to be adjudged an insolvent under the Provincial Insolvency Act. The order of adjudication was made on the 2 March, following, and on the same day, the Nazir of the Court of the District Judge of Dacca was appointed Receiver. On the 16 March 1909, the fourth and fifth creditors of the insolvent made an application for an order under Section 36 in respect of the transfer by Nilkamal in favour of the appellant. It is necessary to observe at this stage that while the proceedings upon the application of Nilkamal were taken in the Court of the District Judge of Dacca, the property in dispute was situated in the District of Monghyr and the alleged transferee was the resident of a place in the interior of that district. There was apparently considerable difficulty in the service of notice upon the transferee. After several unsuccessful attempts, on the 18 May, the Court directed the issue of a fresh notice upon the transferee and fixed the 4 June for the disposal of the case under Section 36. On the 22nd May, Lalji sent a telegram upon which the Court directed that he might be informed about the adjourned day. On the 4 June a pleader appeared on behalf of the transferee. The Court fixed the 25 June 1909 for the hearing of the case, apparently because the creditors were not ready with their evidence and applied for summons upon these witnesses. The Court was closed on the 25 June 1909 and time to deal with the matter and accordingly the hearing was adjourned till the 23 July. It appears that on the same date the purchaser applied for postponement for a month. The learned Judge refused this application as frivolous and at the same time directed him to pay the adjournment costs to the opposing creditors. He also directed the issue of a warrant against Lalji Sahai, the objector. This order, we regret to observe, exhibits inexplicable carelessness. In the first place, the case was adjourned for four weeks because the Court had no time to deal with the matter and consequently it was hardly necessary to deal with the application of the transferee for adjournment. In any event the order for payment of adjournment costs was wholly unjustifiable inasmuch as the adjournment was granted, not at the instance of the transferee but to suit the convenience of the Court. In the second place, the order for the issue of warrant against the transferee is entirely unintelligible and the learned Vakils on both sides have failed to suggest even a plausible explanation of the reasons for which an extraordinary order of this description was made. The case was then taken up for disposal on the 23 July. Lalji applied for time on the allegation that he was ill and was unable to attend. The Court refused the application on the ground that the story of illness was not certified to be true. The opposing creditors then examined their witnesses, the insolvent Nilkamal was also examined, and the learned Judge took time to consider his judgment. On the 27 July he annulled the sale. The transferee has now appealed to this Court and, on his behalf, the decision of the District Judge has been challenged principally on two grounds, namely, first, that in view of the provisions of Section 16 of the Civil P. C., the Court had no jurisdiction to deal with the matter which ought to have been investigated by the Court which has jurisdiction over the disputed property, and, secondly, that the proceedings were irregular in as much as opportunity was not afforded to the transferee to establish his case, and that, in any event, the Court ought to have proceeded under Section 50 of the Provincial Insolvency Act. Both these points have been strenuously contested by the learned Vakil for the respondents, opposing creditors. It has further been urged on their behalf that the present appeal is incompetent on two grounds, first, because the transferee is not an aggrieved person within the meaning of Section 46, sub- section (1), of the Provincial Insolvency Act ; and, secondly, because the Receiver had not been made a party. Before we deal with the merits of the appeal, we must examine these preliminary objections.

(2.) In so far as the first ground is concerned, there is, in our opinion, no substance in it. Section 46, Sub-section (2), provides that any person aggrieved by an order made by the District Court under Section 36, may appeal to the High Court. The learned Vakil for the respondent has conceded that if the decision of the Court below had been adverse to the petitioning creditors, it would have been competent to them to prefer an appeal under sub- section (2) of Section 46. But it has been argued that the transferee, who cannot be treated as a party to the proceedings, ought not to be regarded as an aggrieved person within the meaning of Sub-section (2) of Section 46. This contention is clearly unfounded because it practically invites us to put upon the expression aggrieved person" a narrow construction not justified by the plain meaning of the language used by the Legislature. As was observed by Lord Justice James in Ex, parte Sidebotham 14 Ch. D. 458 : 49 L.J. Bk. 41 : 42 L.T. 783 : 28 W.R. 715, an aggrieved person is a person who has suffered a legal grievance--a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something or wrongfully affected his title to something. See also the oases of Revell V/s. Blake Ex parte Official Receiver 19 Q.B.D. 174 and Ex parte the Board of Trade (1894) 2 Q.B. 805. It is impossible to hold that a person, who claims to be the transferee of a property for valuable consideration and who alleged that he has acquired title in good faith, is not an aggrieved person, although the order has annulled the transfer made in his favour. It will be observed that the words used in Sub-section (2) are any person aggrieved" and not "any party aggrieved". But even if the latter collocation of words had been used, it would, in our opinion, have made no difference to the position of the appellant because the proceedings in the Court below show that for he purposes of the enquiry under Section 33, the appellant was party thereto. The decision, therefore, is not between the creditors on the one hand and a stranger on the other, but it is one between persons who are parties and are necessary parties to a proceeding under Section 36. The first ground, therefore, upon which the preliminary objection is sought to be sustained, must be overruled.

(3.) In so far as the second ground is concerned, there is more substance in it. The learned Vakil for the respondent has suggested that the Receiver is a necessary party to the appeal. This contention is supported by Section 36 which provides that a transfer of property not made in good faith and for valuable consideration shall be void against the Receiver and may be annulled by the Court. In fact, the language of Section 36 justifies the inference that the proper person to make an application under that section is the Receiver in whom all property belonging to the insolvent has vested by operation of law. That the Receiver is a proper party is clear from the decision, In re a Debtor (1901) 2 Q.B. 354 : 70 L.J.Q.B. 699 : 84 L.T. 666 : 17 T.L.R. 536 : 8 Manson 247., where it was ruled that a Receiver is a person aggrieved by an order of the kind which may be made under Section 36. But, though we think that the Receiver ought to have been joined as a party respondent to the appeal, we are of opinion that the appeal ought not to fail on that ground. It is clear, in the first place, that the Receiver was not made a party to the proceedings in the Court below. In the second place, the creditors at whose instance the proceedings were commenced under Section 36 are represented in the present appeal, and the learned Vakil who has appeared on their behalf has urged before us everything that might have been urged in sup-part of the order of the Court below by the Receiver if he had notice of the appeal. In the third place, the order we propose to make will not in any way finally affect the position of the Receiver. Consequently it is not necessary to delay the hearing of the appeal by adding the Receiver as a party respondent there to. The second ground, therefore, upon which the learned. Vakil for the respondent invites us to dismiss the appeal must be overruled. We must, therefore, proceed to consider the appeal on the merits.