IBRAHIM CHHITUBHAI Vs. RECEIVER IN INSOLVENCY A G PANCHOLI
LAWS(GJH)-1966-6-4
HIGH COURT OF GUJARAT
Decided on June 27,1966

IBRAHIM CHHITUBHAI Appellant
VERSUS
RECEIVER IN INSOLVENCY,A.G.PANCHOLI Respondents

JUDGEMENT

P.N.BHAGWATI - (1.) This Revision Application raises an interesting question of law relating to the interpretation of sec. 28 of the Provincial Insolvency Act and sec. 47 of the Registration Act. The question is as to what is the effect of an order of adjudication on a transfer of immovable property in respect of which the instrument of transfer is executed between the date of the presentation of the petition and the date of the order of adjudication but the registration has taken place subsequent to the date of the order of adjudication. The facts giving rise to the question are very few and may be briefly stated as follows. On 17th February 1956 a creditor named Gulamhusain Farukbhai presented a petition for adjudicating Usmanmiya Mahamadmiya and his wife Bai Mumtaz Kunvarba as insolvents in the Court of the Civil Judge Senior Division Baroda During the pendency of the petition Bai Mumtaz Kunvarba executed in favour of the original opponent on 9th April 1956 an instrument of transfer of certain immovable property belonging to her by virtue of a gift deed executed in her favour by Usmanmiya Mahamadmiya on 23rd February 1955. Before the instrument of transfer could be registered an order was made on the petition on 30th June 1956 adjudicating Usmanmiya Mahamadmiya and Bai Mumtaz Kunvarba as insolvents and the properties of the two insolvents as at the date of the presentation of the petition vested in the Official Receiver. The instrument of transfer was thereafter registered on 18th July 1956 It appears that the two insolvents namely Usmanmiya Mahamadmiya and Bai Mumtaz Kunvarba failed to make an application to the Court for an order of discharge within the period granted by the Insolvency Court and the Insolvency Court therefore by an order dated 31st August 1959 annulled the order of adjudication and directed that the property of the insolvents shall continue to vest in the Official Receiver. This order was obviously made by the Insolvency Court under sec. 37 of the Provincial Insolvency Act. The Official Receiver thereafter made an application to the Insolvency Court on 18th February 1960 for a declaration that the transfer of the said immovable property effected by Bai Mumtaz Kunvarba in favour of the original opponent was void since it was effected after the presentation of the petition for adjudication and for recovery of possession of the said immovable property from the original opponent. The original opponent registered the application inter alia on the ground that the transfer of the said immovable property was for valuable consideration and since the transfer had taken place before the date of the order of adjudication and the original opponent bad at the time no notice of the presentation of the petition for adjudication against Bai Mumtaz Kunvarba the original opponent was protected under sec. 55 of the Provincial Insolvency Act and the transfer was not invalidated by the making of the order of adjudication. The trial Court took the view that at the date of the order of adjudication the transfer of the said immovable property in favour of the original opponent was not complete since the instrument of transfer was not registered and the said immovable property therefore continued to belong to Bai Mumtaz Kunvarba and therefore on the making of the order of adjudication the said immovable property vested in the Official Receiver as property of Bai Mumtaz Kunvarba and there was accordingly no question of the applicability of sec. 55 which could be invoked only if the transfer had taken place prior to the date of the order of adjudication. The trial Court accordingly did not permit the original opponent to lead evidence for the purpose of showing that the transfer was for valuable consideration and that the original opponent had at the date of the transfer no notice of the presentation of the petition for adjudication. The trial Court also rejected another contention raised by the original opponent namely that the present application was not maintainable since it was preferred by the Official Receiver after the annulment of the order of adjudication. The argument was that once the order of adjudication was annulled the insolvency proceedings came to an end thereafter no application could be made by the Official Receiver for declaring a transfer of immovable property made by the insolvent void but this argument was negatived by the trial Court. The trial Court in this view of the matter declared that the transfer of the said immovable property made by Bai Mumtaz Kunvarba in favour of the original opponent was void and directed the Official Receiver to take possession of the said immovable property from the original opponent. The original opponent thereupon preferred an appeal to the District Court Baroda. The learned District Judge who heard the appeal also took the same view as the trial Court and held that the transfer of the said immovable property could not be complete without the registration of the instrument of transfer and since the instrument of transfer was not registered until after the making of the order of adjudication there was no valid and complete transfer at the date of the order of adjudication and the said immovable property continued to be the property of Bai Mumtaz Kunvarba and accordingly vested in the Official Receiver as property of Bai Mumtaz Kunvarba. The learned District Judge observed that since there was no valid and effective transfer of the said immovable property prior to the date of the order of adjudication the benefit of the protection conferred under sec. 55 was not available to the original opponent and the original opponent could not claim to validate the transfer under that section. The learned District Judge also held that inasmuch as there was no transfer of the said immovable property prior to the date of the order of adjudication and the said immovable property therefore vested in the Official Receiver as the property of Bai Mumtaz Kunvarba the Official Receiver in whom all the property of the insolvents was vested by an express order of the Insolvency Court on the annulment of the order of adjudication was entitled to make an application to the Insolvency Court for a declaration that the transfer was void and for possession of the said immovable property from the original opponent. The learned District Judge accordingly confirmed the order passed by the trial Court and dismissed the appeal with costs. The original opponent thereupon preferred the present Revision Application in this Court.
(2.) The main grievance of the original opponent in this Revision Application was that the earned District Judge had fallen into an error in holding that no transfer of the said immovable property had taken place prior to the date of the order of adjudication and that there was accordingly no question of considering whether the protection of sec. 55 was available to the original opponent. It was contended on behalf of the original opponent that the instrument of transfer was executed by Bai Mumtaz Kunvarba in favour of the original opponent prior to the date of the order of adjudication and though it was undoubtedly registered after the making of the order of adjudication the registration related back to the date of execution and once the instrument of transfer was registered the instrument of transfer took effect from the date on which it was executed and the transfer therefore took place on the date of execution of the instrument of transfer and not from the date of registration. The argument was that since the instrument of transfer was executed prior to the date of the order of adjudication the transfer took place prior to the making of the order of adjudication and therefore it was necessary for the learned District Judge to consider whether the case of the original opponent fell within the protection conferred under sec. 55 of the Insolvency Act. If the case came within the four corners of sec. 55 the transfer though made subsequent to the date of the presentation of the petition for adjudication would be protected and the Official Receiver would not be entitled to have it declared null and void. It was frankly conceded on behalf of the original opponent that if he could not bring his case within the language of sec. 55 the transfer would be void but contended his counsel the requirements of sec. 55 were satisfied in his case and he was in a position to establish that the transfer was protected under that section. This contention raises a question as to when the transfer could be said to have taken place whether on the date of the execution of the instrument of transfer or on the date of registration and what is the effect of registration effected subsequent to the date of the making of the order of adjudication. The answer to this question depends on the true interpretation of sec. 28 of the Provincial Insolvency Act and sec. 47 of the Registration Act.
(3.) Now it is an elemantary proposition of law that where immovable property is of the value of over Rs. 100.00 the transfer of such immovable property by way of sale can be effected only by a registered instrument executed by the transferor. The transfer would not be effective so as to pass title in the immovable property to the transferee unless the instrument of transfer is registered. But says sec. 47 of the Registration Act: A registered document shall operate from the time from which It would have commenced to operate if no registration thereof had been required or made and not from the time of its registration. Though the transfer cannot be effected except by a registered instrument as soon as the instrument of transfer is registered it operates from the time from which it would have commenced to operate if no registration was necessary and the transfer takes effect not from the date of registration of the instrument of transfer but from the date on which the instrument was executed. So far as the transferor is concerned all that he is required to do for the purpose of effecting the transfer is to execute the instrument of transfer conveying the immovable property to the transferee. Once the instrument of transfer is executed by the transferor he has done everything in his power to convey the immovable property to the transferee. Then comes the next step of registration. Registration does not depend upon the consent of the transferor but is the act of an officer appointed by law for the purpose who if the instrument of transfer is executed by or on behalf of the transferor must register it if it is presented by a person having the necessary interest within the prescribed period. Neither death nor express revocation by the transferor is a ground for refusing registration if the other conditions are complied with. Registration is therefore a necessary solemnity in order to make the transfer by way of sale enforceable but as soon as that necessary solemnity is carried out and the instrument of transfer is registered the transfer becomes effective not from the date of registration but from the date of execution of the instrument of transfer. This view is clearly supported by the decision of the Privy Council in Kalyanasundaram v. Karuppa A.I.R. 1921 P. C. 42.;


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