Research › Browse › Judgment

Calcutta High Court · body

1947 DIGILAW 116 (CAL)

Yakub Ali v. Ram Gobinda Hazra

1947-05-21

body1947
JUDGMENT Harries, C.J. - This is a petition for revision of an order of a learned District judge allowing a revision from an order of an Appellate Officer who upheld an order of a Board passed under sec. 37A of the, Bengal Agricultural Debtors (Amendment) Act, 1942. The Petitioner was a mortgagor and in due course the mortgagee took proceedings to enforce his mortgage and on June 14, 1937, the mortgaged property was sold in execution of a decree and purchased by the decree-holder. 2. After the passing of the Bengal Agricultural Debtors (Amendment) Act, 1942, the Petitioner filed an application under sec. 37A. Sometime before he filed the application he had been adjudged an insolvent and he was an insolvent when the application under sec. 37A was filed, though later he appears to have obtained his discharge. The Board and the Appellate Officer held that though the Petitioner was an insolvent, he could make, an application under sec. 37A, but the District Judge took a different view holding that if an application under sec. 37 A could be made at all, it could only be made by the Receiver. 3. It has been urged before me that the view of the learned District Judge is wrong and that this case falls precisely within the terms of sec. 37A. The right given to a debtor under sec. 37A is a right in certain circumstances, to set aside a sale. The question at once arises who can exercise such right in case of insolvency. It seems to me that I am clearly bound by authority because a Bench of this Court has held in Phani Bhusan Basu v. Sashi Bhusan Maity 60 C.L.J. 581 (1934) that an insolvent has no locus standi to bring an action for setting aside the sale of certain properties after his properties had vested in the Receiver. The Bench went further and said that when a Receiver is appointed by the Insolvency Court the property of the insolvent vests in the Receiver and he completely represents the insolvent. 4. In this Bench case the right to set aside the sale arose after insolvency. In the present case the right to have the sale set aside also arose after insolvency, because sec. 37A only became law after the Petitioner had been adjudged insolvent. As I have said sec. 4. In this Bench case the right to set aside the sale arose after insolvency. In the present case the right to have the sale set aside also arose after insolvency, because sec. 37A only became law after the Petitioner had been adjudged insolvent. As I have said sec. 37A merely gives a certain class of debtors a right to have a sale set aside in certain circumstances, and it appears to me that I am bound to hold that such a right is a right which vests in the Receiver appointed by the Insolvency Court, on the strength of the Bench case to which I have referred. The Bombay High Court has taken a similar view and has held that the right to set aside a money decree is a right which vests in the Receiver--Rustomji Ardeshir Gopper v. Byramji Bomanji Talati 36 Bom. L.R. 79 (1933). 5. If this right to set aside a sale can only be exercised by the Receiver, if it can be exercised at all, then quite clearly an application by the insolvent during insolvency should have been dismissed. It is true the insolvent was later discharged, but it appears to me that if the application was not maintainable when it was presented then it should have been dismissed and cannot now be maintained merely on the ground that the Petitioner ceased to be insolvent. 6. It was urged before me that a Receiver in Insolvency could never exercise the rights given by sec. 37A and as he could not, the Court should hold that those rights do not vest in a Receiver. I am not called upon to decide whether a Receiver could exercise the right to set aside a sale given by sec. 37A. It may be that when a person becomes insolvent he loses all the benefits given by sec. 37A and that the Receiver also cannot exercise any of those rights. There would be nothing hard in such a view, because a person cannot complain that he is deprived of the advantages of one Act when he has been given all the advantages of an insolvent. However the matter does not arise because I am satisfied that the insolvent was divested of this right when he became insolvent and the right vested thereafter in the Receiver which he might or might not be able to exercise. However the matter does not arise because I am satisfied that the insolvent was divested of this right when he became insolvent and the right vested thereafter in the Receiver which he might or might not be able to exercise. In my view the District Judge was right in holding that an insolvent could not file an application under sec. 37A and accordingly this petition fails and is dismissed. The Rule is discharged with costs.