SAGAR MAL Vs. RAO GIRRAJ SINGH

JUDGEMENT

(1.) THIS appeal arises out of an insolvency matter. The main question relates to an occupancy holding. It appears that, the insolvent presented his petition on the 3rd of May, 1914, He was adjudicated insolvent on the 1st of August, 1914. On the 16th of April, 1914, that is to say, shortly before his insolvency, the insolvent made a lease of his occupancy holding in favour of one Desraj, which was registered on the 11th of August, 1914, THIS lease reserved a rent of Rs. 260 per annum; Rs. 130 was to be paid to the zamindar as the rent of the holding and the other Rs. 130 was to go towards liquidation of a debt which the insolvent owed to Government for taqavi advances. The zamindar is the principal creditor in the insolvency and he is the principal respondent in the present appeal. The learned District Judge directed that the occupancy holding should be surrendered to the zamindar for a price to be settled by the receiver. It is stated that the zamindar was willing to give Rs. 1,000. The learned District Judge also set aside the lease as being a transfer made by the insolvent within two years of his insolvency. Desraj, the lessee, is the appellant in the connected appeal. The next part of the order of the District Judge was that the rent payable by Desraj should be recovered from him. THIS order seems hardly consistent with his order setting aside the lease. If the lease is declared void, it is difficult to see how Desraj could be made liable for the rent payable under it. It is contended on behalf of the appellant that the learned District Judge had no power to order the surrender of the land. Section 16 of the Insolvency Act No. III of 1907, Clause (2), Sub-clause (a), provides that all the property of the insolvent save as therein mentioned shall vest in the court or a receiver, and shall be divisible among the creditors. The property of the insolvent which is exempted by any enactment for the time being in force from liability to attachment and sale in execution of a decree does not vest in the court or the receiver. Section 20, Clause (2), of the Tenancy Act expressly provides that the interest of an occupancy tenant is not transferable in execution of a decree of a Civil or Revenue Court. It seems to us that, having regard to the provisions of the Insolvency Act and the Tenancy Act, the occupancy holding in question never vested either in the court or in the receiver, and that, accordingly, the court has no jurisdiction to direct the receiver to surrender the tenancy, and it follows that he has no jurisdiction to set aside the lease. Section 36 can, in our opinion, only apply to the property which can vest in the court or the receiver.

(2.) APPARENTLY one chief reason, if not the only reason, of the learned Judge for taking action under Section 43 of the Insolvency Act, is the alleged misconduct of the insolvent in respect of the making of the lease. For the reasons we have already stated, the learned Judge could not be entitled to take action in this matter in dealing with the insolvent under Section 43. The house which the learned Judge has ordered to be sold is the house of am agriculturist. Before the learned Judge ordered it to be sold, he ought to have found that it was property which vested in the court or the receiver on the adjudication of the insolvent. Under Section 60 of the Civil Procedure Code, the house of an agriculturist is exempt from attachment and sale in execution of a decree. We allow the appeal and set aside the order of the court below save that part of the order which directs the sale of the muafi plot. We make no order as to costs