CHOUTHMAL BHAGIRATH Vs. JOKHI RAM SURAJ MAL

JUDGEMENT

(1.) These two appeals arise out of the same insolvency proceedings. The appellant in appeal No. 210, Chouthmal Bhagirath, applied on 24 February 1926, that one Gurdut Singh be adjudged an insolvent. That application was refused on 20 February 1927. On appeal this Court made an order of adjudication on 8th November 1927. After the presentation of the application before the District judge, an ad interim receiver was appointed on 13 March 1926, and a similar order of an ad interim receiver was passed by this Court when an appeal was preferred against the order refusing adjudication and an ad interim receiver was appointed on 25 May 1927. In the meantime, i.e., between the date of the refusal of the application by the District Judge and that of adjudication by this Court, two creditors of the insolvent Khemkaran Das Jokhi Ram and Gouridut Ganesh Lal (creditors Nos. 2 and 3), who held two decrees against him, proceeded with their execution in the Court of the Deputy Commissioner, Subordinate Judge of Singhbhum and brought to sale an unliquidated debt which has since then been found to be Rupees 6,095-15-0 payable to the insolvent by the Bengal Nagpur Railway Company. That debt was purchased by Jokhi Ram Suraj Mal, the principal respondent in the two appeals. The order of adjudication was annulled on 14th June 1928, on account of the insolvent not applying for his discharge within the time fixed by the Court and later on 1 August 1928, an order presumably under Section 37, Insolvency Act, was passed directing the properties realized to vest in the receiver on behalf of the creditors.

(2.) After this a question arose whether the auction purchaser of the debt due from the Bengal Nagpur Railway could take advantage of the sale as it was alleged that he was the benamidar of the two decree holders who were debarred from getting any benefit of the execution by virtue of Section 51, Insolvency Act. The learned District Judge by his order, dated 17 January 1929, decided against the respondents Jokhi Ram Suraj Mal holding that they were really the benamidars of the two creditors above mentioned, and therefore the debt due from the Bengal Nagpur Railway was still an asset of the insolvent and was liable to be distributed amongst all the creditors.

(3.) The auction purchasers Jokhi Ram Suraj Mal preferred an appeal to this Court which was heard by Wort and Adami, JJ., who, without deciding the question of the benami nature of the purchase, on the ground of law held that the sale to the then appellants (now respondent 1) was perfectly valid and that he was entitled to Rs. 6,095 realized from the Bengal. Nagpur Railway. The effective part of the order so far as it concerns us in the present appeal runs thus: It is therefore directed that the Rs. 6,095-15-0 be paid over to the appellants (Jokhi Ram Suraj Mal).