CHAMPA DEVI L RAMESHWAR PD Vs. JAIRAM DAS BANU MAL
LAWS(ALL)-1960-2-14
HIGH COURT OF ALLAHABAD
Decided on February 22,1960

CHAMPA DEVI L.RAMESHWAR PD. Appellant
VERSUS
JAIRAM DAS BANU MAL Respondents

JUDGEMENT

S.S.Dhavan, J. - (1.) This is an application under Section 115 C.P.G. against an order of the trial Court rejecting the applicant's claim under Order 38 Rule 8 read with Order 21 Rule 58 C. P. C. that a certain property which was attached before judgment by the court in a pending suit belonged to her and was not liable to attachment, The facts of the case are these. On 15-3-1955 the plaintiff respondents Messrs. Jairam-dass Banumal filed a suit against Ram Swarup in the Court of the Additional Civil Judge Dehra Dun for the recovery of Rs. 15,000/-. On 16th. March Ram Swarup sold a house for Rs. 5000/- under a a registered sale deed to Smt. Champa Devi who is the applicant in this revision. On 19th March the plaintiff firm applied under Order 38 Rule 5 C. P. C. for attachment before judgment, and the house sold to Smt. Champa Devi was specified in the list of properties sought to be attached. On 29th March the court passed an ex parte order of attachment. On 20th May Ram Swarup filed an objection against the attachment in which he denied his liability under the suit. On 5-11-1955 the order of attachment was made absolute. It is common ground that the applicant Smt. Champa Devi was not a party to the attachment proceedings.
(2.) Meanwhile on 16-6-1955 the Firm Jairam-das Banumal made an application before the Insolvency Court praying that Ram Swarup be adjudged as an insolvent. One of the acts of insolvency alleged against him was the sale of the house to Shrimati Champa Devi. It is common ground that Smt. Champa Devi was not a party to the insolvency proceedings nor was any notice issued to her. On 11-5-1957 the District Judge declared Ram Swarup insolvent and also held that the sale of the house to Smt. Champa Devi was an act of insolvency.
(3.) On 25-3-1957 Smt. Champa Devi fifed her claim in respect of the attached property before the learned Additional Civil Judge. It was supported by an affidavit sworn by her brother-in-law Lala Ugger Sen, who stated that Champa Devi was tha legal owner in possession of the property which, consequently, was not liable Fo attachment in any suit against Ram Swarup. The plaintiff firm filed no counter-affidavit controverting these allegations but filed an application praying that the official receiver be im-pleaded as a respondent in the case as the entire property of the insolvent vested in him after the order of adjudication. The parties led evidence before the court, Champa Devi's brother-in-law testifying that she had purchased the house in dispute and Banumal, the partner of the plaintiff firm, deposing that the sale deed was fictitious. Ram Swarup also appeared as a witness. The learned Judge dismissed Champa Devi's claim for reasons which are best expressed in his own words ".....Once it has been found by the insolvency Court at the time of adjudication that the transfer was an act of insolvency, then the alleged transferee can no longer contend that the transfer was not void on that ground." He relied on a decision of Mukerji, J. in Sheoraj Bahadur Mathur v. Abdul Aziz, AIR 1956 All 68 in which the learned Judge purported to rely on a decision of the Privy Council in Mohammad Siddique v. Official Assignee of Calcutta, AIR 1943 PC 130. In Sheoraj Bahadur Mathur's case, AIR 1956 All 68, Mukerji, J. appears to have taken the view that a finding in the order of adjudication by the insolvency Court that a particular transfer of property is an act of insolvency amounts to a decision that the transfer is void, and it is not open to the transferee to re-open this question afterwards and contend that the transfer was not void on that ground. The learned Judge further held that this principle applies not only where the transfer is declared automatically void by the insolvency Court at the time of adjudication but also where the official receiver applies under Section 53 of the Provincial Insolvency Act for avoidance of a deed of transfer. The learned Judge was of the opinion that the order of adjudication is conclusive, and the remedy of an aggrieved third party is to challenge the order of jurisdiction itself by way of appeal. In that case a man called Noor Ahmad was declared insolvent and one of the acts of insolvency was held to be a transfer made by him in favour of another man called Abdul Aziz. The Court held that this transfer was made with the object of defeating and delaying his creditors. Thereupon the property of the insolvent Noor Ahmad vested in the official receiver. Subsequently, the receiver made an application under Section 53 for avoidance of the transfer in favour of Abdul Aziz. The court held that the sale was not fictitious and rejected the receiver's application. His appeal was dismissed by the District Judge who took the view that the transfer was not automatically avoided by the finding of the court that it amounted to an act of insolvency. In revision Hon'ble Mukerji, J. was of the opinion that the Privy Council in AIR 1943 PC 130 had laid down the principle that it was not open to a transferee from the insolvent, after the transfer had been held by the insolvency Court to be an act of insolvency made with the object of defeating the insolvent's creditors, to contend in any subsequent proceedings under Section 53 that the transfer was not void and should not be set aside. The learned Judge conceded that the decision of the Privy Council was pronounced in a case under the Presidency Towns Insolvency Act but he extended it to a case under the Provincial Insolvency Act. "because the provisions of the Provincial Insolvency Act are similar to the provisions of the Presidency Towns Insolvency Act." Several decisions of other High Courts, including one of a Full Bench of the Nagpur High Court (D. G. Sahasrabudhe v. Kila Chand Den-chand and Co., AIR 1947 Nag 161) had been cited before the learned District Judge. But he considered himself bound to follow the opinion of Mukerji, J. reported in AIR 1956 All 68. He, therefore, rejected the petitioner's claim under Order 38 Rule 8 even though he conceded that the judgment in the insolvency ease which according to him "rendered the sale deed null and void," was passed after the filing of the suit and after the order of attachment. Aggrieved by this decision the petitioner Champa Devi has come to this Court in revision.;


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