MATAM LINGAYYA Vs. ANUMALA VENKATAPATHY

JUDGEMENT

(1.) This is an appeal from the decree of the Subordinate Judge of Kurnool dated 9 August 1929 in appeal from the decree of the District Munsif of Kurnool dated 26 November 1926 dismissing the plaintiff's suit for recovery of land on the preliminary ground that he had no title. The plaintiff claimed the lands under a sale-deed executed in his favour by defendant 8, Basi Lingayya. The preliminary objection made to the plaintiff's claim was that Basi Lingayya could not have conveyed any valid title to the plaintiff because on the date of the sale-deed, namely 3 December 1925, he was an undischarged bankrupt and also when J the land in question devolved upon Basi Lingayya as reversioner some time in 1924; the contention of the contesting defendants 1 to 7, was that the land immediately vested on its devolution in the Official Receiver by virtue of the provisions of Section 16(4), Provincial Insolvency Act of 1907 or under Section 28(4), provincial Insolvency Act of 1920. This objection was upheld by the District Munsif and the suit was dismissed with costs. On appeal by the plaintiff the Subordinate Judge took the same view as the trial Court and dismissed the appeal with costs. In this second appeal the main point argued is that the view adopted by the two Courts below is not correct on the question of law involved in the case.

(2.) One other point was however also urged in this second appeal, but it is a question of fact, namely, whether Basi Lhgayya had not got a discharge at the time of the devolution of the property on him in 1924. On this question of fact the finding of both the Courts below is identical. On going through the judgments of the Courts below dealing with this point, I see no reason to doubt the correctness of those concurrent findings. If the man had really got a discharge, the fact could have been easily proved, and as the District Munsif observes, a note to that effect would have been made in the register of insolvency petitions maintained in the Court. There can be no doubt that Basi Lingayya was really an undischarged insolvent at the time when the property devolved on him in 1924. The question therefore that remains to be decided is the question of law whether the effect of the provisions of Section 16(4) of the old Act or Section 28(4) of the New Act, disabled the insolvent from conveying a valid title to property which devolved on him after adjudication and before discharge. Some reference has been made in the argument to what is known as the doctrine in Cohen V/s. Mitchell (1870) 25 Q.B.D. 262. But in this case the law is obviously to be found not in this doctrine but in the actual words used in the Acts. In both the old as well as the New Act the expression used is: 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.

(3.) The important words are "forthwith vest." The use of these words in the Statute is a clear indication that the legislature did not intend to apply the dectrine in Cohen V/s. Mitchell (1870) 25 Q.B.D. 262 so far as the mofussil is concerned. The doctrine referred to was no doubt based upon equitable grounds and has received subsequent statutory recognition in England. But such recognition has not been given to it in the mofussil in India; on the other hand, in the Provincial Insolvency Act, the exact opposite of that doctrine is laid down, namely, that such after-acquired property vests forth, with in the receiver, that is to say, the moment the property is acquired by or devolves on the insolvent it vests in the receiver, and whatever other rights the insolvent may have in respect of the property, such as the right to maintain a suit in respect of the property, he cannot obviously have the right to convey a good title in respect of that property to another without the assent of the Official Receiver. The observations of their Lordships of the Judicial Committee in Kalachadn Banerjee V/s. jagannath Marwari 1927 P.C. 108, put the matter beyond doubt. That case was a case similar to the present. There also certain property devolved on the insolvent when he was undischarged, and their Lordships observed that under the provisions of Section 16(4), Provincial Insolvency Act of 1907, such property vested in the receiver and that the receiver alone was entitled to deal with the property which in that case was only the equity of redemption. At p. 599 they state that the receiver is the person to whom the equity of redemption has been assigned by the operation of law, and that he alone is entitled to transact in regard to it and that he, and not the insolvent, has the sole interest in the equity of redemption, which was the only property which devolved on the insolvent in that case. In view of these observations it is unnecessary to refer to other cases in which this point has been referred to. I am of opinion that the conclusion arrived at by both the Courts below is right, and that this second appeal must fail. It is accordingly dismissed with costs of respondent 8.