ANAND PRAKASH AND ANR. V/S NARAIN DAS-DORI LAL AND ANR. 1930
| Citation | AIR 1931 All 162 |
| Date of Judgment | 12TH November 1931 |
| Court | Privy Council |
| Case Type | Civil Appeal of 1931 |
| Appellant | Anand Prakash And Anr.. |
| Respondent | Narain Das-Dori Lal And Anr. |
| Bench | Sen, J., Mukerji, J., Banerji, J., Kendall, J., King, J. |
| Referred | The Provincial Insolvency Act, 1920Indian Contract Act, 1872 |
FACTS OF THE CASE
The basic facts are that a creditor firm known by the style of Narain Das Dori Lal applied that the following six firms be adjudicated insolvents: (1) Hazari Lal Tota Ram of Bahjoi; (2) Bhekhari Das Hazari Lal of Bombay; (3) Bhekhari Das Hazari Lal of Jalandhar; (4) Bhekhari Das Hazari Lal of Hoshiarpur; (5) Bhekhari Das Ishar Das of Hapur and (6) Bhekhari Das Hazari Lal of Bahjoi.
The petitioning creditors stated in their application, dated 21st May 1925, that the partners of these firms were 29 in number and included Hazari Lal, Tota Ram and their minor sons. Anand Prakash is a minor son of Hazari Lal. Chaitan Sarup is a minor son of Tota Ram. It has been controversial that Hazari Lal and Tota Ram, together with their sons, adults and minors, are members of a joint hindu family. The application for adjudication was opposed, amongst others, by Anand Prakash and Chaitan Sarup upon a variety of grounds. They contended that they were minors and as such could not be adjudicated insolvent. They disowned all connection with the first five firms which have been mentioned above, and contended that they were not liable for the debts contracted by those firms in as much as the debts were incurred not for the benefit of the family, but to meet losses in wagering transactions which used to be carried on by those firms. They further contended that the firm of Bhekhari Das Hazari Lal of Bahjoi was their ancestral business and that the assets of the said firm or their interests therein could not be seized in insolvency.
ISSUES
- When a joint Hindu father governed by the Mitakshara law is adjudicated an insolvent, whether his son’s joint share vests in the receiver (assuming that the debt payable by the father is one which it is the pious duty of the son to pay?
- Whether it is open to the receiver in insolvency to seize the son’s share and sell it in order to satisfy the debts payable by the father?
- If the receiver in insolvency cannot proceed against the son’s share whether the receiver has any and what remedy against the son’s share in the joint family property?
ARGUMENTS BY RESPONDENT
The position of the father in a hindu joint family is peculiar but the share of the son’s does not vest in him. It was possible that under section 28 the whole property which the father could sell voluntarily to pay off his debts is by operation of law transferred to the Court or Receiver. This view can no longer be taken, because it has been definitely held by the Privy Council that upon the adjudication of a hindu father the son’s interest in the family property does not vest in the Official Assignee or the Receiver.
When a Hindu father is adjudicated insolvent, the interest of his son or sons in the family property does not vest in the Court or the Receiver, but the Court or, the Receiver has power to sell the joint family property including the interest of the minor son or sons of the insolvent for the payment of his antecedent debts not incurred for immoral or illegal purposes.
Where a hindu father who is a member of a joint hindu family governed by Mitakshara law, is adjudicated an insolvent, the joint share of the son do not vest in e receiver even though the debt of the father is one which is payable by the sons as a prior duty.
Since the property is no longer available, having been transferred, the receiver can take no steps as against the said property.
ARGUMENTS BY APPELLANT
The application for adjudication was opposed amongst others by Anand Prakash and Chaitan Sarup upon variety of grounds. It was contended that they were minors and as such could not be adjudicated insolvents.
The firm of Bhekhari Das Hazari Lal of Bahjoi was their ancestral business and that the assets of the said firm or their interests therein could not be seized in insolvency.
The right of a hindu father to sell his son’s interest in the joint family property also vests in the receiver and the receiver can attach the property and sell it. It is open to the Official Receiver to attach and sell the interests of the sons in the property, it is not open to him to ask the court to annul straightway.
JUDGEMENT
It is true that in the case propounded the conditions necessary for an absolute power of disposal are fulfilled. The debts are antecedent and untainted and the father has therefore an absolute power to sell the joint family property for the purpose of discharging them. We cannot however hold that, as the father’s power of disposal is “absolute”, therefore, the property over which he exercised that power is his property under the definition of “property” in Section 2(1)(d). The result of holding this would be that the property itself (i.e. the whole joint family property including the interests of the sons) must vest in the receiver under Section 28(2). It has been already held that this view is untenable in the face of the ruling in Sat Narain’s case (AIR 1925 P.C. 18. We cannot therefore invoke the aid of the definition in Section 2(1)(d) as applying in terms to the father’s power of disposal. The definition is only helpful to this extent, that it shows that a certain kind of power of disposal of property is regarded as a species of a proprietary right.
Section 52(2)(b), Presidency Towns Insolvency Act, goes further and shows that a certain kind of proprietary may be regarded not merely as a kind of proprietary right but as “property”.
It is held that the share is indefinite and fluctuating in extent. The ownership of the coparcenary property vested in the whole body of coparceners. No individual member can claim that he has a definite share.
Critical Analysis
In the case Anand Prakash and anr. Vs. Narain Das Dori Lal and anr., putting the case at its very lowest there is a doubt whether the term “property” in Section 28(2) does not include the father’s power of disposal of the joint family property. If there is a doubt we are entitled to act upon the maxim stare decisis and follow the long-established current of decisions which lay down that the receiver is entitled to sell the joint family property for discharging the insolvent father’s debts.
The receiver represents the interests of the creditors and stands in much the same position as a judgment-creditor. Now the holder of a simple money decree against the father, for an untainted debt, can(apart from insolvency) attach and sell the joint family property so as to bind the sons. The receiver should not be in a worse position than a decree-holder of a money decree and it would be unjust if the creditors were deprived, by the operation of the law of insolvency, of recourse to the family property which would otherwise have been available for the satisfaction of their claims.
REFERENCES
Websites
- https://indiankanoon.org
- Legaldata.in
Cases
- Sat Narain v/s Behari Lal (AIR 1925 P.C. 18)
Law
- Provincial Insolvency Act, 1920
- Presidency Towns Insolvency Act, 1909
This Article is written by Harshita Chauhan of Aligarh Muslim University, Intern at Legal Vidhiya.
