RAMPROSAD LOHIA Vs. MPPATEL

JUDGEMENT

(1.) In this case the plaintiff sues the defendant for the recovery of Rs. 5311-14-3 due under a deed of assignment. The facts alleged are as follows; A joint family carrying on business as Goberdhonedas Murlidhar sold oil to the defendant, carrying on business as Manubhai Purshottam & Co., valued at Rs. 4630, in October 1937. Two members of the family carrying on the business of Goberdhonedas Murlidhar were adjudicated insolvent on 16 November 1937, and on 22 July, 1938 the Official Assignee at a public auction sold to the plaintiff the entirety of the outstandings of the business of Goberdhonedas Murlidhar, and by a deed of assignment dated 9 March he assigned and transferred, among other debts, the debt alleged to be due by the defendant to the insolvents.

(2.) The defence is that no debt was owing at the time of the assignment. The defendant admits the delivery of the oil and says that for some time prior to 16 October 1937, the insolvents owed a firm named Hiralal Nayak Nilratan Sadhu a sum of money exceeding the claim of the insolvents against the defendant, and that on that date, by mutual arrangement, it was agreed that, after making certain deductions, Rs. 4219-5-6 should be paid by the defendant to the insolvents, who agreed to accept that sum in full settlement, and gave a receipt to that effect, and there and then the insolvents endorsed the cheque with the name of their business and delivered it to the firm of Hiralal Nayak Nilratan Sadhu in part satisfaction of the claims of that firm against the insolvents. The defendant therefore alleges that the firm of Hiralal Nayak Nilratan Sadhu became holders in due course of the cheque for value. It has been argued on behalf of the plaintiff that this defence is of no avail, because at the time of the adjudication the debt was still owing by the defendant to the insolvents and therefore became vested in the Official Assignee. This argument is advanced by reason of the fact that on 18 October 1937 the cheque was dishonoured, and it was not until 6 July 1939 that Hiralal Nayak Nilratan Sadhu filed a suit in the Alipur Court against the defendant upon the cheque, which was decreed by consent.

(3.) The only other relevant facts which must be considered are that after the order of adjudication, namely, on 20 July 1938, the attorney of the defendant informed the Official Assignee that upon inspecting the schedule filed by the insolvents, to enable him to bid at the forthcoming sale of the insolvents assets, he was surprised to find that his client had been described as a debtor, whereas the debt had been paid long before the date of adjudication. The Official Assignee replied that he could not do anything about the matter unless the defendant got the insolvents to delete his name from their schedule, whereupon, on the date of the sale, the defendant's attorney gave notice to all present, both in English and Hindustani, that this debt had been paid. On 26 July the insolvents wrote to the defendant admitting that they had inadvertently included his name in the schedule and that the debt had been paid by him long before the order for adjudication was passed. What has happened is unfortunate, for the plaintiff paid about Rs. 13,000 for the assets of the insolvents which he valued at about Rs. 27,000 and up to the present he has only been able to realize about Rs. 10,000. But after giving careful consideration to the evidence which has been given I feel no hesitation whatever in accepting the evidence which has been given by the defendant and on his behalf, nor can I accept the plaintiff's statement that though present at the auction he did not hear any notice being given with regard to this particular debt to the effect that it had already been paid.