MAHABIR PRASAD Vs. SHIVANANDAN SAHAY

JUDGEMENT

(1.) The facts out of which these miscellaneous appeals arise are as follows. In October 1931, one Dalu Ram who at that time owed Rs. 48,000 to the firm of Debi Bux Brijmohan (Respondent 2), entered into a contract with the latter, agreeing to convey to the firm, in satisfaction of their debt, a certain property at Buxar in this Province and other properties outside the Province, and also assigned to the firm a debt that was due to Dalu Ram. The properties agreed to be conveyed were the properties of the joint family of which Dalu Ram was the karta, and the debt in respect of which the properties were to be conveyed had been incurred by Dalu Ram for the purposes of the family business. In pursuance of this contract Dalu Ram actually executed the assignment already referred to and also a transfer of that portion of the property which lies outside this Province. In November 1931, Dalu Ram died before executing the conveyance of the Buxar property. In the meantime his son Murlidhar had applied to be declared an insolvent; and in January 1932, by consent of the parties, a Receiver of the applicant's property was appointed.

(2.) Murlidhar was declared an insolvent by the District Judge of Shahabad in September 1932. The firm respondent 2, then applied for execution by the Receiver of the conveyance of the Buxar property which Dalu Ram had agreed to convey by the contract of October 1931. Murlidhar's wife and sons objected to this application on the ground that, as their interests had not vested in the Receiver, the latter had no power to execute a conveyance of their interest in the property. Objection was also put forward by four of Murlidhar's creditors on the ground that the conveyance, if executed, would have the effect of preferring one creditor of the insolvent to the others. The learned District Judge overruled the objections holding "that the debt having been contracted by the father and grand-father, is binding on the minors, and so also the contract". M.A., 162 of 1933 has been preferred by the sons of Murlidhar one of whom is a minor, and M.A. 246 of 1933, has been preferred by the firm Debi Bux Brijmohan.

(3.) In M.A., 162, on behalf of the sons of Murlidhar, Mr. Mahabir Prasad contends that it is no part of the duty of a Receiver to fulfil contracts entered into by the insolvent and that in any case the interest of the sons of Murlidhar in the family property did not vest in the Receiver. Reference was made to Sub-section (2) of Section 28, of the Provincial Insolvency Act, 1920, the material portion of which is as follows: 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.... The meaning of the words "property" in this sub-section, is defined in Sub-section (2), Clause (1)(d). as property over which or the profits of which any person has a disposing power which he may exercise for his own benefit. The question whether the property which vests in the Receiver on the insolvency of a member of a joint Mitakshara family includes the interests of other members of the family has been set at rest by the decision of the Privy Council in Sat Narain V/s. Behari Lal 1925 PC 18.