GIRIKANT SHIVLAL PANDYA Vs. VADILAL VRIJLAL SHAH

JUDGEMENT

(1.) This is a second appeal from the decision of the District Judge of Ahmedabad and it raises a point on which there has been a certain amount of difference of judicial opinion, the question being whether what is known as the rule in Cohen V/s. Mitchell (1890) 25 Q.B.D. 262 in English Bankruptcy Law applies to cases arising under the Provincial Insolvency Act (V of 1920.)

(2.) The relevant facts are that a petition in insolvency was presented on June 23, 1931, and receivers were appointed, the insolvent was adjudicated on March 10, 1932, and on April 19, 1932, the receivers gave a notice to the insolvent calling upon him to pay Rs. 1,600 which he had earned as salary after the presentation of the insolvency petition. It appears from the judgment of the learned First Class Subordinate Judge of Ahmedabad, who heard the application in the first instance, that of the Rs. 1,600, Rs. 200 were earned after adjudication. The learned Subordinate Judge held that the whole of the Rs. 1,600 were assets in the insolvency, but that the receivers were entitled to a half only of the earnings, having regard to the provisions of Section 60 of the Civil Procedure Code. In appeal the learned District Judge seems to have treated the whole of the Rs. 1,600 as after-acquired property falling within the provisions of Sub-section (4) of Section 28 of the Provincial Insolvency Act, 1920, and he was of opinion that the rule in Cohen V/s. Mitchell applied. Now that rule is that property acquired by the insolvent after adjudication does not vest in the trustee in bankruptcy unless and until the trustee intervenes, and the learned District Judge therefore referred the case back to the lower Court in order to determine whether any part of the Rs. 1,600 had been disposed of by the insolvent before the receivers intervened.

(3.) I am rather disposed to think that the Rs. 1,400 which were earned before the adjudication would vest in the trustee under Sub-section (2) read with Sub-section (?) of Section 28 of the Provincial Insolvency Act; but at any rate the question as to whether after- acquired property vests on its acquisition or on the intervention of a trustee, arises in the case of Rs. 200. Sub-section (4) of Section 28 provides that all property which is acquired by or devolves on the insolvent after the date of an order of adjudication and before his discharge, shall forthwith vest in the Court or receiver. As was pointed out by their Lordships of the Privy Council in Kala Chand Banerjee V/s. Jagannath Marwari (1927) L.R. 54 I.A. 190 the provision clearly means that the moment property is acquired by or devolves upon the insolvent after the date of adjudication and before his discharge, it vests eo instanti in the Court or receiver. But it is argued that we ought not to give effect to the plain meaning of the language because of the English decisions culminating in Cohen V/s. Mitchell. Cohen V/s. Mitchell and the cases on which it was founded seem to approach very near to judicial legislation. The language of Section 44 of the English Bankruptcy Act of 1883 was not identical by any means with the language of Section 28 of the Provincial Insolvency Act of 1920; at the same time, taken by itself, the language appears to be clear. Under the English Act property of the bankrupt which vested in the trustee included all such property as might belong to or be vested in the bankrupt at the commencement of the bankruptcy, or might be acquired by or devolve on him before his discharge. The decision of the Court that property acquired after the date of the bankruptcy did not vest until the trustee intervened, was frankly based on considerations of inconvenience and hardship which would follow on a strict interpretation of the Statute. The rule established by the Courts has now received legislative recognition in Section 47 of the English Bankruptcy Act of 1914. It is, in my opinion, very difficult for this Court, construing an Act of 1920 which does not contain a provision similar to Section 47 of the English Bankruptcy Act of 1914, to depart from the plain meaning of the words used in order to bring Indian law into conformity with the English law. The Indian Act provides that all property which is acquired by or devolves upon the insolvent shall forthwith vest in the Court or receiver, and plainly, unless, we disregard altogether the word " forthwith ", we cannot say that the property did not vest until the receivers intervened. The view that after-acquired property vests at once in the Court or receiver has been adopted by the High Court of Rangoon in Ma Phaw V/s. Maung Ba Thaw (1926) I.L.R. 4 Ran. 125, a decision with which I entirely agree. It was also the view of the Lahore High Court in Diwan Chand V/s. Manak Chand [1934] A.I.R. Lah. 809 although a contrary view was taken by the Patna High Court in Jagdish Narain Singh v. Mussammat Ramsakal Kuer (1928) I.L.R. 8 Pat. 478.