Nasim Ali, J - (1.)This is an appeal against an order under Section 4, Provincial Insolvency Act. The appellants obtained a decree for money against one Jagat. On 6 January 1928 Jagat applied to the District Judge of Pabna for being adjudged an insolvent. On 11 January 1928 the appellants applied to execute their decree against Jagat in the Court of the Munsif at Pabna. On 16 January 1928 they received notice of Jagat's application for insolvency. On 11th February 1928 certain huts belonging to the debtor were attached by the executing Court. On 18 March 1928 the appellants appeared before the Insolvency Court and filed objections to the application for Insolvency. On 19 May 1928 the debtor informed the executing Court that his application for insolvency was admitted and prayed for stay of sale of the properties attached. This application however was dismissed for non-prosecution. The attached huts were sold on 23 May 1928 and were purchased by the appellants for Rs. 200 paid in cash. Jagat was adjudged insolvent on 23 August 1929. The Nazir of the Court who was thereafter appointed receiver sold the huts already purchased by the appellants at the auction sale for Rs. 200 to respondent 4, the son of respondent 3, another creditor of the insolvent. The Nazir receiver was subsequently discharged and respondent 2, a pleader, was appointed receiver. He applied to the Insolvency Court under Section 4 for a declaration that the appellants acquired no title to the huts on the basis of the auction-purchase as against him and the purchaser to whom he had sold the huts. The learned Judge has given judgment for him. Hence the present appeal by the auction-purchaser.
(2.)The point for determination in this appeal is whether the appellants have acquired any title to the disputed huts by the auction-purchase. Now the mere admission of an insolvency petition does not debar a creditor from executing his decree against the debtor. But where execution of a decree has issued against any property of a debtor and before sale thereof notice is given to the executing Court that an insolvency petition has been admitted the executing Court is bound under Section 52, Provincial Insolvency Act, on application, to direct the property attached to be delivered to the receiver, and the receiver can sell the property for satisfying the charge on the property for the costs incurred by the attaching creditor. There is divergence of opinion on the question whether the section contemplates an interim receiver. In some cases it has been held that as the section contemplates delivery of property to the receiver after the admission of the insolvency petition and not after the order of adjudication as laid down in Section 35, Provincial Insolvency Act of 1907 and Section 54, Presidency Towns Insolvency Act the legislature must have contemplated an interim receiver in Section 52 of the present Provincial Insolvency Act. On the other hand it has been held that the section cannot contemplate an interim receiver as an interim receiver has no power to sell and the section authorises the receiver to sell the property for satisfaction of the charge on the property for costs of the attaching creditor. Again the opinion on the question whether an application for delivery of the property to the receiver (if a receiver has already been appointed) is necessary does not appear to be uniform. The following observations were made by Mitter, J., in Mahendra V/s. Dinesh, 1933 Cal 561: It has been argued that if this view (i.e. application to the executing Court is not necessary) is taken the words "on application" become superfluous and redundant. There is no force in that contention. The underlying principle of the Provincial Insolvency Act as can be gathered from the provisions of Section 52 is that when the Court is apprised of the pendency of an application for insolvency in another Court and of the further fact that such application has been admitted it should stay its hands so far as the execution of the decree by the creditor of the insolvent are concerned:
(3.)In Mathuresh V/s. S.R. Mills Co. Ltd., 1935 Cal 150 Mukherji and S.K. Ghosh, JJ. have observed: On reading Section 52, Provincial Insolvency Act, it seems to us to be perfectly clear that an application has got to be made to the Court which was executing the decree and it is that Court which on such an application being made can direct the property to be delivered to the Receiver in order that the sale may be held.