Decided on September 30,1966



N.G.SHELAT - (1.) The suit from which this second appeal arises was instituted by the plaintiffs-appellants in the Court of the Civil Judge (J. D.) at Anand for recovering possession of the suit field bearing survey No. 1937/1 admeasuring 1 acre and 15 1/4 gunthas situated in the sim of Sarsa after redeeming the same on payment of the amount due under the mortgage deed dated 1st November 1925 passed in favour of the defendant by one Parshottam and for costs of the suit together with mesne profits.
(2.) Before we actually consider the points raised before this Court it is essential to set out certain other and undisputed facts in this case. Parshottam Raghnath held certain properties in the then State of Baroda and had also a portion of land admeasuring 1 acre and 15 1/4 gunthas said to be a part of S. No. 1937 situated in the limits of the town of Sarsa in the then British Territory. tie was a resident of Baroda. Since he was unable to pay his debts he had filed Insolvency Application No. 1/33- 34 in the District Court of Baroda under the provisions of the Law of Insolvency prevailing in the then State of Baroda. He was adjudicated an insolvent by the Court and one Mr. R. A. Chipluntar was appointed a receiver. The receiver had thereupon administered the estate of insolvent. The amount realised by sale of properties etc. came to Rs. 1969-12-0 as against the total amount of the creditors of Rs. 3551-14-6. After deducting the expenses the creditors got 46% of their claims before the Insolvency Court. While dealing with the properties of the insolvent the receiver tried to take certain steps for realising the amount out of the property comprised in the present suit which was situated at Sarsa within the British Territory. It further appears that some of the creditors bad presented even an application Ex. 51 for having the right of the equity of redemption of the insolvent in the Sarsa property being sold and the amount if realised be taken for the distribution to the creditors. That application does not appear to have been prosecuted any further and the Court passed an order saying that nothing is required to be done in that respect. That order is dated 25-6-36. Then we find from Ex. 52 the report of the receiver that the attempts were made by him for disposing of the property or equity of redemption of the insolvent in respect of that property but no one was able to offer any amount more than the mortgage amount due on that property to the defendant. He also felt that any expenditure incurred on obtaining the transfer deed in respect of that property from the insolvent would be an unnecessary burden on the plaintiffs themselves as no advantage is likely to accrue out of that right of the insolvent in that property. On those grounds he solicited the orders of the Court and in that respect the learned Judge by his order dated 22-8-36 said that nothing is necessary to be done in respect of that Sarsa land. Thereupon the final dividend was awarded to the creditors on the basis of the amount realised and at last as per the report Ex. 53 the insolvent proceedings appear to have come to an end. Before that the insolvent was given an absolute discharge under the provisions of the Baroda Insolvency Act. In fact even the defendant in his evidence at Ex. 49 has admitted that the property was then worth Rs. 500.00 to Rs. 60.00 and none was out to offer or give more than his mortgage amount. In other words the right of the insolvent in this property was not considered to be of any benefit to the creditors and since it was not likely to fetch any amount more than the amount that was required to be paid to the mortgagee in respect of that property that was left off by the receiver and that too under the orders of the Court. It is the right or the equity of redemption in this property that the insolvent had chosen to transfer by a deed Rs. 46 dated 23rd July 1941 to one Bhikhabhai Zaverbhai for a sum of Rs. 1500.00. That such a right of equity of redemption as it is called in the property is transferable and such a right passes on to the transferee is not in dispute. That Bhikhabhai then sold his right or interest in that property to the plaintiff far a sum of Rs. 1900.00 under a deed Ex. 47 dated 8th March 1943. It is that way that the plaintiffs have filed the present suit for redemption of that property which was mortgaged with the defendant by the original owner namely Parshottam Raghnath. It was mortgaged by him with the defendant as per Ex. 24 for a sum of Rs. 700.00 on 1-11-1925. The point that arises to be considered would be as to the effect arising out of those insolvency proceedings taken out by Parshottam himself in the Baroda Court vis-a-vis the property in suit which was situated then in a foreign territory such as Sarsa in British India.
(3.) The points raised by Mr. Amin the learned advocate for the appellants are as to whether the suit property which was situated in the foreign State vested in the insolvency Court or its receiver appointed in the case in the insolvency petition filed by Parshottam Raghnath in the Court of Baroda. According to him much though the property of the insolvent vests in the receiver no sooner an order of adjudication is passed against him in so far as the property in suit was outside the territory of the then State of Baroda it could not be affected in any manner and that therefore at any rate after Parshottam was discharged as an insolvent he became entitled to get the right or equity of redemption in the said property in any manner as he chose and that way right in that property has validly come to the plaintiffs. He further contended that even if the property can be said to have vested in the receiver the receiver gets no right over the property unless it was transferred to him by the insolvent by executing an authority of transfer as is required in accordance with the law prevailing in British India where the property was situated. Since no such document was obtained by the receiver till he came to be discharged by the Court in the insolvency proceedings the property had remained unaffected by any orders passed in the insolvency proceedings and that therefore at any rate after his discharge he was entitled to deal with the property in any manner he chose.;

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