SHAIKH MOHAMMAD YASIN Vs. SHAIKH FATEH MUHAMMAD

JUDGEMENT

(1.) This appeal arises out of the insolvency of one Shaikh Fateh Muhammad. The application for insolvency was made on January 4, 1934, and admitted on March 22, 1934. In the meanwhile one of the creditors had attached a part of the insolvent's property in execution of a, money decree. The applicant in insolvency applied for stay of execution of the sale. This was rejected. The present appellant, another creditor of the applicant for insolvency, then applied to the Insolvency Court to direct the executing Court to sell the property and pay the sale proceeds to the Insolvency Court for distributing amongst the insolvency creditors. This application was also rejected. The order sheet contains an order by the Insolvency Court directing that notice of the application for insolvency should be given to the executing Court. The executing Court proceeded with the sale and the property was sold on July 2. 1934, and purchased by the decree-holder or Rs. 2,675 which was applied in part satisfaction of the decree. Thereafter the decree-holder, opposite party purchaser, applied to the Insolvency Court for amendment of the petition in insolvency by excluding from the list of assets the property which had been purchased at the execution sale. This amendment was allowed by the Insolvency Court and it is against that order that the present appeal has been preferred.

(2.) So far as the order of the Court below goes, it is, in my opinion, a correct order. At the time that it was made, the property purchased by the decree-holder- creditor had already passed out of the estate of the insolvent and the sale proceeds bad been applied in satisfaction of the decree. Section 51, Insolvency Act, however, declares that when execution of a decree has issued against the property of a debtor, no person shall be entitled to the benefit of the execution against the Receiver except in respect of assets realised in the course of the execution by sale or otherwise made before the date of the admission of the petition. It was, therefore, open to the Receiver who was not appointed until after the execution sale, to take steps to obtain the decision of the Court as to whether the sale proceeds should be made over to him or not. It is still open to the Receiver to apply to the Court to re-amend the list of the insolvent's assets by including the proceeds of the execution sale and the Court has ample power under Section 4 of the Act to decide whether those proceeds are available tothe Receiver. The present appeal, therefore, fails, inasmuch as the appellant is. not the Receiver and has no locus standi to maintain an application under Section 51, and is dismissed, each party bearing his own costs. The cross-objection of the opposite party is not pressed and is also dismissed without costs. Madan, J.

(3.) I agree.