SM KAMALA BALA DASI Vs. SURENDRA NATH GANGULY

JUDGEMENT

(1.) The only one of these connected appeals which has been argued before us at any length is that which is numbered 456 of 1935 and is entitled Sm. Indu Bala Dasi and Ors. V/s. Bakkeswar Banerjee (receiver). It is quite clear that the view taken by us in this appeal will have the effect of determining all rights of the parties in the other appeals also, particularly having regard to the fact that Mr. Ghose appearing on behalf of certain decree-holders does not desire to contest the correctness of the adjudication in insolvency of Lakshmi Narayan Ganguly. Lakshmi Narayan is described in the insolvency proceedings as the managing member of a joint Hindu family firm which was known by the name and style of and carried on business as Messrs Ganguly Brothers. It appears that there are in all 15 members in that family firm of which 14 are of full age, and one is a minor whose interests are in the hands of the learned advocate who represents the Deputy Registrar of the Court. Mr. Ghose's clients are three ladies, each one of whom had lent money to Messrs. Ganguly Brothers and who in regard to their respective loans had obtained three separate decrees against this family firm. They, therefore, are in the position of being decree-holders, but that does not in any sense constitute them secured creditors in the insolvency. They have however this advantage that they managed to secure an attachment of certain properties belonging to Messrs. Ganguly Brothers before their three suits came to trial and, therefore, of course before they obtained decrees in those suits. Thus, directly decrees had been made in their favour, they were in a position to endeavour to obtain their rights under those decrees by appropriate proceedings in execution against the properties which had already been attached. Unfortunately for them, however, they were not the only creditors of Messrs. Ganguly Brothers. There were other, and we gather a considerable number of other creditors most of whom at any rate were desirous of enforcing their rights against the family firm. One of these creditors is one Kali Das Bakshi- and he acting solely or at any rate primarily in his own interest-instituted proceedings in insolvency in the Court of the District Judge of Nadia as an outcome of which an adjudication order was made, and a receiver was appointed, in whom the property of the insolvent became vested by virtue of the provisions of the Provincial Insolvency Act.

(2.) The question we have to decide comes to this: what is it that can rightly be described as the property of the insolvent for the purposes of this particular insolvency. It appears to have been suggested that because the insolvency proceedings were instituted against Lakshmi Narayan as the manager or karta of the joint Hindu family firm, therefore the whole of the assets, at any rate the business assets of that firm became vested in the receiver who had been appointed in the insolvency proceedings and so the whole of the properties of the fifteen persons who constituted the firm ought to be available for distribution amongst the creditors. That is a proposition we cannot accept. We are quite clearly of opinion and indeed I think it is now conceded at the Bar, that the utmost that could have vested in the receiver was Lakshmi Narayan's own share in the family business together with such right as he might have had to dispose of property belonging to the other members of the firm for the purpose of discharging business obligations. That is what has bean put forward by Mr. Bagchi and Mr. Lahiri on behalf of the joint creditors of this family firm. Mr. Ghose on the other hand who has been supported by the learned advocate who appeared for the Gangulis other than the insolvent and the minor Ganguly family, says that the attachment to which I have already referred must be taken into account and that although as regards the ordinary property and assets of the insolvent the attachment is inoperative and ineffective as against the receiver, it is of consequence as regards the alleged right which Lakshmi Narayan is said to have had as the manager of the joint family to deal with the assets belonging to himself and the other members of the family for the purpose of liquidating the family debts.

(3.) The actual judgment with which we are concerned appears in the order sheet of the insolvency proceedings (Insolvency Case No. 20 of 1935) under the Serial No. 30 and dated 19 August 1935. The learned District Judge points out first of all that on the application of one of the creditors of the family firm of Kali Das Bakshi, Lakshmi Narayan was adjudicated insolvent on 16 July 1935. Then he refers to the three decrees which had been obtained by Mr. Ghose's clients, all of them in the Court of the Additional Subordinate Judge of Nadia. Then he says: an objection to the receiver taking possession of all the joint properties of the firm on the ground that the properties of the other judgment debtors, one of whom is a minor, did not vest in the receiver appointed by this Court, was put forward by some of the other creditors (he was of course referring to the decree-holders). Then he refers to the attachment. The learned Judge no doubt took the view that it was only the share of Lakami Narayan that vested in the receiver, but he adds this: As to the second contention whether on the previous attachment of the joint family property by some of the creditors, the powers of the receiver to bring the property to sale has ceased to exist, there appears to be not much force in the above contention as the attachment does not create any title in favour of the attaching creditor. It merely prevents private alienation. The mere fact of attachment cannot place him in the category of a secured creditor.