Patna High Court
Kanak Sunder Bibi vs Ram Lakhan Pandey And Ors. on 21 April, 1955
Equivalent citations: AIR1955PAT458, AIR 1955 PATNA 458
Author: Chief Justice
Bench: Chief Justice
JUDGMENT Ahmad, J.
1. These two miscellaneous appeals arise from a common insolvency proceeding against two insolvents, Pawananjai Kumar Jain and his son Raj Kumar Jain, and are directed against a common order, dated 12-4-1954, passed by the insolvency court at Arrah whereby it has under Section 53, Provincial insolvency Act annulled two deeds of gift dated 1-7-1939 and 5-5-1939 both executed by the common insolvent Pawananjai Kumar Jain, the former covering all his properties that were still owned and possessed by him on that date in favour of his sister Kanak Sunder Bibi and the latter, which is prior in date, covering only the zamindari interest in one village bearing touzi No. 6215 in favour of his mistress Janki Kaharin, who subsequently sold that property by a registered deed of sale dated 9-9-1949, for a sum of Rs. 3800/- to one Hardeo Pandey in the name of his minor son Ramdeo Pandey.
Miscellaneous Appeal No. 133 of 1954 is on behalf of the donee Kanak Sunder Bibi and the other miscellaneous appeal is on behalf of the purchaser from the other donee Janki Kaharin. There is also a cross-objection in Appeal No. 133 of 1954 on behalf of the other insolvent Raj Kumar Jain praying therein that the deed of gift dated 1-7-1939, in favour of .Kanak Sunder Bibi should not only have Been annulled under Section 53 but should have been held to be sham and void transaction under Section 4, Provincial Insolvency Act.
2. The application for insolvency of the two insolvents was originally filed on 2-1-1940 by two of the creditors of Pawananjai Kumar Jain, namely, (1) Nirmal Kumar Jain and his brother, and on that application both the father and the son Pawananjai Kumar Jain and Raj Kumar Jain were adjudged insolvent on 18-6-1941. In the meantime, by the order of the High Court dated 22-4-1940, Mr. Ram Lakhan Pandey, Pleader, had been appointed as an ad interim receiver on 29-4-1940.
This receiver after the adjudication on 1-8-1941, applied for the annulment of the aforesaid two deeds under Section 53, Insolvency Act and also for an adjudication under Section 4 of that Act that the two deeds of gift were void. So far as the application for the annulment of the gift in favour of Janki Kaharin was concerned, it appears from the judgment of the court below that it was not contested at any stage in the insolvency court either by the donee or by the purchaser from her.
It was the application regarding the other gift alone that was contested and that by Kanak Sunder Bibi. Her contentions made at the time of the hearing in support of her opposition were, amongst others:
(1) That the gift made on 1-7-1939 was not a sham transaction. It was accepted by her and was given effect to and that the application under Section 4, Insolvency Act was not applicable to the facts of this case.
(2) That the transfer made in her favour was bona fide and in making that transfer the transferor Pawananjai Kumar Jain did neither conceal the' debts standing against him nor she, the donee, was ever reluctant to pay all the debts standing against Pawananjai Kumar Jain. On the contrary, she had been all along anxious to make arrangement for the payment of his" debts.
(3) That the gift in her favour was for valuable consideration and in lieu of that she had accepted the onerous responsibility to pay all the debts of Pawananjai Kumar Jain and to maintain him till his life time.
(4) That the death of Pawananjai Kumar Jain should have by itself operated as his discharge and the insolvency proceeding should have automatically terminated.
(5) That the transfer made in her favour having been incorporated by that time into a decree on the basis of an award, the only course that was left open thereafter for the receiver to follow to challenge the gift was to institute a properly constituted suit and that in no case in law it could be avoided under Section 53, Insolvency Act.
3. The court on hearing the parties has annulled both the deeds of gift under Section 53, Insolvency Act, but refused to consider its validity under Section 4 of the Act. On this point the order passed is:
"...though the Receiver has made a prayer under Section 4, Insolvency Act as well to determine even the validity of the deed of gift, and to set it aside altogether, I propose to confine myself at present only with the question of annulment under Section 53, Insolvency Act, and for this purpose I assume the validity and effectiveness of the gift, so far as it relates to the share of Pawananjai Kumar. Therefore, the question whether the deed of gift was given effect or not is left over."
It is this order which is the subject-matter of cross-objection and the appeals are directed against the order of annulment.
4. Section 53, Insolvency Act reads:
"Any transfer of property not being a transfer made before and in consideration of marriage or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration shall, if the transferor is adjudged insolvent on a petition presented within two years after the date of the transfer, be voidable as against the receiver and may be annulled by the Court."
The petition for insolvency, as already stated, was presented on 2-1-1940. It in, therefore, obvious that the transfers made by the two deeds of gift were effected within two years from that date, and, therefore, in respect of time they are covered by the terms of Section 53. The only question, therefore, that has been seriously canvassed at the bar and has to be decided is as to whether these transfers come under the category of those which have been saved from the operation of that section by its own terms.
In other words, the question for consideration is whether the three conditions required to protect it from voidability, namely, that the transferee is a purchaser or incumbrancer, that he. acted in good faith, and that there, was valuable consideration, were satisfied.
5. Mr. B.C. De appearing for Kanak Sunder Bibi has pressed the appeal only on these three points-- (1) that there was valuable consideration under the document, (2) that the transferee is a purchaser and (3) she acted in good faith. The other points raised in the court below were not argued or pressed by him in support of this appeal.
6. In order to appreciate the contentions made by Mr. De, it is necessary to give here a short history of the family and also a history of the surrounding circumstances in which the two deeds of gift were made by the insolvent Pawananjai Kumar Jain.
7. Pawananjai Kumar Jain was the only son and Kanak Sundar Bibi the only daughter of Nandulal by his wife Ram Ratan Bibi. The other insolvent Raj Kumar Jain is the only son of Pawananjai Kumar Jain by his married wife. Originally, Pawananjai Kumar Jain and his son Raj Kumar Jain were the members of a joint Hindu family. While they were joint, they had borrowed money from a number of creditors; some as the members of the joint family, some in their individual capacities and some debts were coming from the time of Nandulal also.
In the long run, these debts along with some other matters gave rise to some differences between them and in order to dissolve those differences they entered into certain family arrangement by a deed dated 9-12-1938. This document is Ex. 1 on the record. Three persons were parties to this document, namely, (1) Pawananjai Kumar Jain, (2) Raj Kumar Jain and (3) Mt. Ram Ratan Bibi, wife or Nandulal.
By the terms of this deed, the family separated and the properties were divided between Pawananjai Kumar and Raj Kumar Jain and certain provisions were also made therein for the payment of all the debts which had been incurred either in the time of Nandulal or in the course of management by Pawananjai Kumar Jain or by Raj Kumar Jain himself in his individual capacity. A few months thereafter Pawananjai Kumar Jain by one deed of gift dated 5-5-1939, transferred one village bearing touzi No. 6215 out of the properties, which were given to him under the family arrangement deed, to, his mistress Janki Kaharin and by another deed of gift dated 1-7-1939, transferred all his remaining properties to his sister Kanak Sundar Bibi. This last deed of gift is Ex. C on the record.
It appears that this gift in favour of Kanak Sundar Bibi did not result in smoothening the atmosphere in the family, rather resulted in its further deterioration. A number of criminal cases subsequent thereto cropped up between the donor Pawananjai Kumar Jain on one side and the donee and her husband's brother Bijai Kumar Jain on the other. Fortunately within a short time, all these matters, by the consent of the parties, were referred to an arbitration under an unregistered document dated 22-12-1939.
The points referred to the arbitration, as it appears from the judgment under appeal, were whether the gift should be confirmed, modified or set aside and as to what arrangement should be made for the payment of the debts of Pawananjai Kumar Jain and for his maintenance. The arbitrators gave the award on 14-1-1940. Their conclusions were that the deed of gift was subject to the making of proper management for the payment of numerous debts of Pawananjai Kumar Jain and for his maintenance.
They further directed that a portion of the estate should be sold to pay off his debts and the entire income of his remaining properties should be utilised for his comfort and maintenance and the residue, if any, left after his death only would go to the donee. As ill luck would have it, it so append that before the arbitrators gave the award on 14-1-1940, two of the creditors of Pawananjai Kumar Jain, namely, (1) Nirmal Kumar Jain and (2) his brother, filed applications on 2-1-1940 to adjudge both Pawananjai Kumar Jain and his - son Raj Kumar Jain as insolvents.
While this application was still pending for order, Kanak Sundar Bibi on 18-4-1941, that is, some time before the adjudication order was passed in the proceeding, sold two of the zamindari properties covered by the gift and paid off the entire debt of the two petitioning creditors, namely, Nirmal Kumar' Jain and his brother and a petition of satisfaction to that effect was also filed in the court which is Ex. 15 on the record.
Sometime thereafter, Sumerchand Jain, the bahnoi of Pawananjai Kumar Jain, who was a secured creditor and had already got a decree on the basis of his security, put his mortgage decree under execution and got sold one of the house properties given in Schedule B of the family arrangement deed for Rs. 27,000/- and realised his entire due thereby which was to the extent of Rs. 10,700/-. Half of this sale amount, Rs. 27,000/- was taken by the receiver as the share of Raj Kumar Jain. Out of the other half, the donee Kanak Sunder Bibi withdrew Rs. 2964-13-6 which was left in deposit on the satisfaction of the decree in favour of Sumerchand Jain, and out of that paid the entire dues of another creditor Narayan Das.
It also appears that Kanak Sunder Bibi in the course of the insolvency proceeding filed a number of applications, namely, those dated 6-1-40, 19-1-40, 8-4-41, 18-4-41, 12-4-43, and 15-3-44, expressing her willingness to pay all the debts and on 18-12-1942, she submitted a scheme as well before the court for its approval with a view, to enable her to pay up all the debts which stood against Pawananjai Kumar Jain. It was opposed vehemently by the receiver and for some reason or other the scheme could not be given effect to. It has further been claimed by her that she had been all along maintaining Pawananjai Kumar Jain and paying a sum of Rs. 60/- per month to him for his maintenance.
8. On these facts it was contended by Mr. De that the deed of gift dated 1-7-1939, executed by Pawananjai Kumar Jain in favour of Kanak Sunder Bibi was for valuable consideration and the transfer was in favour of a purchaser as contemplated by Section 53, Insolvency Act. In support of this contention he relied mainly on two. facts.
In the first place, his argument was that the three documents (a) the deed of family arrangement dated 9-12-1938, (b) the deed of gift dated 1-7-1939 and (c) the award dated 14-1-1940 when read together clearly indicate that the donee Kanak Sunder Bibi in lieu of the gift made in her favour accepted two liabilities (1) the onerous duty of paying the debts to all the creditors and in accordance therewith--she in fact thereafter paid as well some of the debts and has been all along anxious to pay the remaining; and (2) the liability to maintain, Pawananjai Kumar Jain till his life time in compliance of which she had been in fact making payment to him towards his maintenance at the rate of Rs. 60/- per month.
Secondly, he relied on the legal liability arising from the fact that the whole property of the donor Pawananjai Kumar Jain owned and possessed by him on that date was under the gift given to Kanak Sunder Bibi. That, it was submitted, constituted Kanak Sunder Bibi a universal donee and as such under the provisions of Section 128, T.P. Act it made her personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the. property comprised therein.
9. On the basis of these two grounds Mr. De argued that the gift in favour of his client Kanak Sunder Bibi was in substance a transfer in favour of a purchaser for valuable consideration.
10. In my opinion, this contention of Mr. De is not sustainable. So far as the deed of gift itself is concerned, it is clear from it that it was a transfer without consideration, or, what is generally called, a voluntary transfer, The deed reads:
"Kanak Sunder Bibi is a sister of the executants & has always been obedient and submissive to him, and always has regard for the comforts and provisions of necessaries of the executant and there are cogent reasons for expecting that her treatment of and regard for the executant will continue to be so as long as he lives ..... Therefore the executant .... gave away and endowed the properties detailed below which is valued, at Rs. 12,000/- in the name and in favour of Kanak Sunder Bibi widow of B. Udai Kumar Jain deceased .... and remitted the consideration money in lieu of obedience and submission; and withdrew the possession of the executant therefrom and put the claimant in possession thereof."
The consideration, therefore under the document is nothing but "obedience and submission."
In law, in my opinion, this consideration cannot be called a valuable consideration and the donee for a consideration like this cannot be called a purchaser as contemplated by Section 53, Insolvency Act. It is true that "a valuable consideration", in the sense of, the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given suffered, or undertaken by the other: Com. Dig, Action on the case, Assumpsit, B. 1-15", as observed in the case of -- 'Currie v. Misa', (1875) 10 Ex 153 (A).
But the question here is as to whether under the terms of the deed of gift under discussion any right, interest, profit or benefit did in fact accrue to the donor Pawananjai Kumar Jain or whether some forbearance, detriment, loss, or responsibility was in fact given or suffered or undertaken by the donee in "return for the gift given to her. It requires no argument to say that the obedience and submission referred to in the deed of gift might be a motive or ground for the gift in favour of Kanak Sunder Bibi; but the obedience and submission were never suffered by her as a consideration for the gift.
The obedience and submission referred to in the deed of gift were on the part of the donee only acts of goodness without any conception of its being a consideration for something to be done by the donor, though for the donor it might have operated as a motive for making the transfer of the properties to her in appreciation of that obedience and submission. And if obedience and submission are merely the motive for the transfer, the transfer would be nothing but a gift only.
Section 4, T.P. Act provides:
"The chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act."
The word 'consideration' in reference to transfer of properties for consideration, therefore, has to be read in the light of its definition given in the Contract Act. It is now well settled that a transfer in Consideration of natural love and affection is not a transfer for consideration within the meaning of Section 2, Contract Act. So also is a transfer in consideration of an expectation of a spiritual and moral benefit see -- 'Debi Saran Koiri v. Nandalal Chaubey', AIR 1929 Pat 591 (B).
In law a consideration in a contract for sale, as in all other contracts under the Contract Act, must be a good and valuable consideration. Therefore a meritorious or a gratuitous consideration such as natural love and affection or obedience and submission by way of respect or love may at best be a meritorious or a gratuitous consideration and in no case can be a good consideration of valuable consideration see -- Patridge v. Gopp', (1758) 28 ER 647 (C).
Besides this, the recital in the document shows that the transfer under it is a gift and a gift under Section 122, T. P. Act has to be necessarily without consideration. This, therefore, also supports the conclusion that the expression "obedience and submission" referred to in the body of the document, was only a motive for the transfer and not a consideration for it.
11. Then the expression Valuable consideration', as used in Section 53, Insolvency Act, has to be read in a manner consistent with the implication of tile words 'purchaser' and 'incumbrancer' used therein along with it. The word 'purchaser' by now, as understood under the Bankruptcy or Insolvency Act, has acquired a defined and definite connotation.
Section 53, Insolvency Act has been enacted for the protection of the bona fide purchasers and is practically on the line similar to the provisions laid down in the English Bankruptcy Act. It is, therefore, as observed in, the case of -- 'Sharf-uz-zaman v. Deputy Commr. Barabanki', AIR 1925 Oudh 28 (D).
"natural to assume that the words 'purchaser and incumbrancer in good faith', which are taken direct from that Act have the same meaning as they have in the English Courts."
In the case of -- 'Ex parte Hillman', (1879) 10 Ch. D. 622 (E), the question in controversy was whether a trustee of a post-nuptial settlement of leaseholds for the benefit of the settlor's wife and children was not a purchaser of the property for valuable consideration within the meaning of S. 91, Bankruptcy Act, 1869. In answer to that question Jessel, M.R., who delivered the judgment in that case, observed:
"It is argued that, because the leasehold houses are subject to the payment of the rent and the performance of the covenants of the lease, therefore the trustees of the settlement are purchasers of the houses in good faith and for valuable consideration. It appears to me that this argument, is not well founded. I think that in this section the word 'purchaser' means a 'buyer' in the ordinary commercial sense, not a purchaser in the legal sense of the word.
That this is so made obvious by the use of the other word 'incumbrancer, for every incumbrancer is a 'purchaser' in the legal sense. The two words 'purchaser' and 'incumbrancer' are contrasted with each other. It is impossible to say that in any sense of the word a trustee for the settlor's wife and children is a 'buyer' of the settled property."
This dictum was the subject-matter of interpretation by the English Courts in other cases which cropped up thereafter on this point. One of them was the case of -- 'Hance v. Harding', (1888) 20 Q.B.D. 732 (F). In that case by a post-nuptial settlement made ill pursuance of an arrangement between the settlor and his father, the settlor assigned a policy of insurance upon his life to trustees on trust for the benefit of his children, the settlor's father at the same time conveying certain leasehold property to the trustees on similar trust.
The transaction was proved to have been entered into in good faith for the purpose of securing a provision for the children, and not with any intention to defraud or defeat the settlor's creditors. The settlor became bankrupt within two years from the date of settlement and subsequently died. The official receiver in bankruptcy claimed the money payable under the policy on the ground that the settlement was void under Section 91, Bankruptcy Act, 1869. Lord Esher, M.R. held:
"Then can he be called a purchaser? He has given something to get something for other persons, viz., the family of his son. He has given up his interest in certain leaseholds to induce his son to give up his interest in these policies. That being so, I think he is a purchaser from the bankrupt within the meaning of the section.
It is said that there is a decision in the Court of Appeal by which of course we are bound, if in point, to the effect that he is not such a purchaser, and that the term purchaser in the section must be limited to a purchaser in the mercantile sense of the term, viz., a person who has bought something by contract of purchase and sale.
I do not think that the case of '(1879) 10 Ch. D. 622 (E)' goes that length. In that case the trustees of the settlement, who were alleged to be purchasers, had not given something to procure something for other persons. Though they might in conveyancing law language be called purchasers', they had not given anything at all.
I think the case only goes the length of saying that such purchasers as those were riot purchasers within the section, and that in order to make a purchaser within the section there must be valuable consideration given. I think there was such consideration here, for the father gave something in order to induce the son to give something."
In the same case Sir James Hannen observed:
"In -- '(1879) 10 Ch. D. 622 (E)', Jessel, M. R., was dealing with a case in which the conveyance was purely voluntary, without any consideration moving from or to either of the parties; and with reference to that case his language must be interpreted as meaning that the word 'purchaser' must not be treated as a conveyancing term, but must be considered as applying to cases where there is a quid pro quo.
Here there was an ample quid pro quo. The father in effect tells the son that he ought to do something for his family, and, if he will, be, the father, will do something also. That appears to me to be a perfectly valid consideration, and I think that the father was a purchaser within Section 91."
12. The other case, where the dictum of Jessel M.R. was the subject of discussion, was the case of -- 'Pope In re', (1908) 2 K. B. 169 (G). In that case the transfer in controversy was a post-nuptial settlement of his own property executed by a bankrupt within two years of his bankruptcy in favour of his wife and children, in consideration of the wife refraining from taking proceedings against him in the Divorce Court.
At that point of time the relevant provision of law for the" protection of a bona fide transfer was provided in Section 47, Bankruptcy Act 1883. In dealing with that section on the facts stated above, Cozens Hardy M. R. observed:
"It is decided by authority, which binds us, that the word 'purchaser' is equivalent to 'buyer' in the sense in which that word is used in commercial transactions -- '(1888) 20 Q.B.D. 732 (F) --and, on the other hand, that it is something more than a conveyancing term and is not satisfied by a deed, such as an assignment of leaseholds, which might suffice to render the assignee a 'purchaser' within the statute of 27 Eliz, C. 4; (1879) 10 Ch. D.' 622 (E). I think it means a person who had given something in consideration of the settlement, or, to use the language of Sir James Hannen, a quid pro quo.
Now in the present case the wife bargained that she would not commence proceedings in the Divorce Court, her costs in which proceedings would have been payable by the husband whatever the result of the--proceedings might have been; See R. 158. This was, in truth, a pecuniary payment from which he was relieved.
Moreover, these proceedings might have resulted in an order for alimony. I mention these pecuniary elements, although I do not think it possible to overlook the fact that as part of the consideration for this settlement the husband procured his escape from public exposure in the Divorce Court. I am unable to adopt the view that there must be either money or physical property given by the purchaser in order to bring the case within the exception.
In my opinion the release of a right or the compromise of a claim, not being a merely colourable right or claim, may suffice to constitute a person a purchaser' within the meaning of Section 47."
13. The third case which dealt with the word 'purchaser' was the ease of -- 'Bayspoole v. Collins', (1871) 6 Ch A 228 (H). The facts of that case were that the owner of a freehold estate which was worth, beyond a mortgage to which it was subject, about £, 1300, was persuaded by K, a relative of his wife, to make a post-nuptial settlement of it on his wife and children.
As an inducement to do this, K agreed to advance him £ 150 on his promissory note to meet the interest on the mortgage, which was then in arrear: The settlement was accordingly prepared and executed, but no mention was made in it of the advance of £. 150. Subsequently, on a bill filed by the subsequent mortgagee to establish priority over the settlement, a question arose under 27 Eliz. c.
4 as to whether the advance of £ 150 was a sufficient valuable consideration to support the settlement. In answer to that Lord Hatherley L.C. ob served:
"Mr. Kay contends that the advance was, at most, only an inducement, and that an inducement will not be sufficient. But I think that if a man is induced to do a thing upon the faith of £ 150 being paid to him, that amounts to a bargain between the parties whether the word describing the transaction be 'inducement' or 'bargain'.
The question is two-fold: Whether the agreement at the date of the settlement to advance £ 150 led this man to do that which the person lending the money asked him to do, namely, to make a settlement; and whether the person who agreed to advance the £ 150 consented to do so upon that understanding, but not otherwise. If those questions are answered in the affirmative, I apprehend that is a 'consideration' in every sense and meaning of the word."
14. These cases, therefore, fully establish that (1) the word 'purchaser' means a 'buyer' in the ordinary commercial sense, not a purchaser in the legal sense of the word; (2) that the consideration for the transfer need not be necessarily something equivalent to what is transferred under the contract, but (3) the consideration must be valuable consideration in the sense that there must be 'quid pro quo.' In other words, something should be paid for something. Looker! at from these considerations, it is obvious that the donee under the deed of gift under discussion cannot, be called in law a purchaser as there was no quid pro quo at all; that means, nothing passed from the side of the donee for what was given to her under that document.
15. In fact, Mr. De also candidly conceded that the deed or gift read by itself does not show that the donee thereunder gave any consideration for it. He, however, contended that this deed of gift should not be read all alone. It should, according to him, be read along with two other documents, namely, the deed of family arrangement dated 9-12-1938 and the award dated 14-1-1940 in order to find out the real import of the transactions.
He argued that if the deed of gift is so read, it would be abundantly clear that the gift in favour of Kanak Sunder Bibi was accepted with the implicit acceptance by her, firstly, to pay the debts of Pawananjai Kumar Jain, and, secondly, to maintain him till his lifetime.
16. This contention, apart from its consideration on merit, raises the question as to whether any extraneous evidence is at all permissible to be takes in order to prove that the consideration mentioned in the deed of gift, namely, obedience and submission, was not the only consideration but something more, that is, the liability to pay all the debts and the liability to maintain Pawananjai Kumar Jain.
Mr. De submitted that on a question like this, which, in substance, amounts to the query whether the document was or was not without consideration, parole evidence is permissible in law and in support of this contention reliance was laid by him on the case of (1871) 6 Ch A 228 (H). In that case, the facts of which have already been referred to above, no mention was made of the advance of £, 150 but still parole evidence was allowed to be given in order to show by surrounding circumstances that the settlement was for consideration, that is, for the payment of £ 150.
In my opinion, the admissibility of evidence in that case on the question of consideration was perhaps based on the principle that the document was silent on that point that being so, that case Cannot be of much assistance to dispose of the point in controversy here. Even under the Indian Evidence Act this could be done for proviso (2) of Section 92 says:
"The existence of any separate oral agreement as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved."
Further, we have to keep in view that in respect of the Law of Evidence the position in England is somewhat different from what is in India. In our country the Law of Evidence is the creature of statute and there is a specific provision laid down in Section 92 of that Act which deals with the exclusion of parole evidence. The operative part of that section says:
"no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representative-in-interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms."
Attached to that section are a number of provisos of which at best only proviso (1) can be said to have any relevancy with the point before us.' That proviso reads:
'"Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such its fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law."
17. Mr. Harinandan Singh appearing for the receiver has strenuously argued that in this case the point in controversy, is not want or failure of consideration nor the question of consideration has been raised here in order to invalidate the document. On the contrary, what the donee wants to prove is that the deed of gift is a valid document not for the reason that it is a conveyance of property in the form of gift but for the reason that it is a conveyance of sale for a valuable consideration. Therefore, according to him, the provision of proviso (1) of Section 92 is not applicable to the facts of the present case. I think there is sufficient force in this contention.
It is true that the respondents have based their case on the contention that the transfer is without consideration but that submission is based on the facts stated in the document itself and not because of the fact that the document is silent on the point of consideration. Had the document been silent on the point of consideration, there could have been some scope for the submission that once a question is raised as to whether there was or was not any consideration, it was open to all the parties to lead evidence in support of their respective cases, Here the question is otherwise. The document clearly says that the consideration for the transfer of the property under the document was obedience and submission and on that basis it has been argued by the receiver and other respondents that that consideration being not a valuable consideration in law the document should be treated as one without consideration. The facts of this case, in my opinion, are fully covered by the substantive provision of law laid down in Section 92. The statement about consideration is not a part of a recital only.
It is in fact an important term of the disposition of property under the deed. That being so, no evidence is permissible under Section 92, Evidence Act as between the parties to the instrument or their representatives-in-interest for the purpose of contradicting, varying, adding to, or subtracting from, that term. The gift, as already stated above, is necessarily a transfer without consideration and further in the document itself it is stated that the property was transferred to Kanak Sunder Bibi in consideration of her obedience and submission. In that view of the matter, any extraneous evidence to prove that the gift made to her was not only in, lieu of obedience and submission but also in lieu of her accepting two liabilities, namely, that of paying of all the debts to the creditors of Pawananjai Kumar Jain and of maintaining him till his lifetime, is bound to result, firstly, in adding to the term of consideration and, secondly, in contradicting it.
This is fully supported by the decision in the case of -- 'Bai Hiradevi v. Official Assignee of Bombay', (S) AIR 1955 Bom 122 (I) on which Mr. Harinandan Singh relied much in support of his contention. I, therefore, hold that Mr. De is not right in his submission that in order to find out as to whether the deed of gift dated 1-7-1939 was or was not for valuable consideration, parole evidence in the nature of two other documents, namely, the deed of family arrangement dated 9-12-1938 and the award dated 14-1-1940 should also be taken into consideration and the question of consideration, should not be decided merely on the interpretation of the deed of gift itself.
18. Even, however, if it be assumed for a moment that parole evidence in the nature of the two aforesaid documents may be allowed to go in order to find out as to whether the gift was made for valuable consideration or not, I mink that the liabilities said to have been accepted thereunder by the donee, namely, Kanak Sunder Bibi, that is, the liabilities of paying all debts of the creditors of Pawananjai Kumar Jain and of maintaining him till his lifetime, do not amount to a valuable consideration, as contemplated by law under Section 53, Provincial Insolvency Act, and cannot make the donee a purchaser, I have already discussed above as to the connotations and implications of those words used in Section 53. In substance, they suggest that a transfer, should be in the nature of sale in the ordinary commercial sense and that in the course of that there must be quid pro quo, that is, something must pass for something.
In this case, even if the contention of Mr. De be accepted that Kanak Sunder Bibi did accept the liabilities to pay the debts of the creditors of Pawananjai Kumar Jain and to maintain him till his lifetime, that was, I think, with a clear understanding and subject to the limitation that all those liabilities would be discharged out of the property given by the donor to the donee. No valuable consideration, therefore, did pass from the side of the donee to the donor, that means, there was no quid pro quo at all.
In fact, the award when read carefully shows, that it was not a transfer at all and even if there was any that transfer at best amounted to a resulting trust for the interest of the donor in favour of the donee in order to enable the donee to discharge all the debts and to maintain the donor till his lifetime.
The contention of Mr. De was that these liabilities by themselves were sufficient in law to constitute a valuable consideration and in support of this contention reliance was placed by him on the cases of AIR 1925 Oudh 28 (D); (1888) 20 QBD 732 (F) and (1908) 2 KB 169 (G).
I have already given above the facts of the last two cases, namely, those of 'Hance v. Harding (F)' and 'Pope, In re; Dicksee, Ex parte (G)'. In (1888) 20 QBD 732 (F) the father as a purchaser had given certain leasehold property to the trustees in lieu of the assignment of a policy of insurance by his son. Therefore, that was a clear case of quid pro quo.
In the case of (1908) 2 KB 169 (G) the wife refrained from taking proceedings against the transferor, her husband, in the Divorce Court and further gave up her claim for alimony. In that case also, therefore, there was quid pro quo for the settlement made in her favour. Therefore, these two cases do not support the contention of Mr, De that mere acceptance of the liability on the part of the donee Kanak Sunder Bibi to discharge the debts of Pawananjai Kumar Jain and to maintain him till his lifetime out of the income and profits of the properties transferred to her amounted in any way in law to a valuable consideration and satisfied the condition of quid pro quo.
The first case, no doubt, namely, AIR 1925 Oudh 28 (D) does, to a certain extent, support the contention of Mr. De. In that case one Shafiq-uz-zaman executed a deed on 30-1-1912 by which he made over his whole property to certain trustees in the interest of his son. The object of the deed was that the son's estate should be saved from the effects of the father's extravagance and that the creditors should be paid in full.
For some reason the arrangement did not appear to have worked satisfactorily and within less than two years afterwards Shafiq-uz-zaman was adjudicated insolvent on the application of one of his creditors. Thereupon his son appearing through his guardian brought a regular suit to assert the deed of trust executed in his favour by Shafiq-uz-zaman. That was ultimately in the High Court decided in favour of the plaintiff's son. But before this order of the High Court was passed, the receiver had put in an application in the insolvency Court for an order to annul the deed of trust under Section 53, Provincial Insolvency Act. The exact prayer made therein was:
"The applicant, therefore; prays that the transaction of 30-1-1912, so far as it purports to be a gift of the insolvent's estate to his son, should be annulled."
On these facts the learned Judges of the Oudh Court relying on the principle of law laid down in (1888) 20 QBD 732 (F) and -- 'Official Receiver of Trichinopoly v. Somasundaram Chettiar', AIR 1917 Mad 102 (J) held:
"Possibly the broadest definition of consideration which has been given appears in the case of (1875) 10 Ex 153 (A). In the present case Shafiq-uz-zaman made over his whole property to trustees in order that the residue after paying his debts should go to his son. He himself stood to gain by the transaction, an annuity of Rs. 400 a month for himself and a lesser annuity for his wife in addition to freedom from his creditors.
The trustees undertook on behalf of the son heavy responsibilities in return for a chance of saving the son's property from the creditors. In either case Valuable consideration was given and received; and as, in our view, the definition of 'purchaser' accepted by the English Courts for the parallel sections of the English Law of Insolvency, holds good in India also, we are of opinion that the deed before us was a transfer in favour of the purchasers for valuable consideration."
On the basis of this passage in the Judgment, Mr. De contended that here also the donee Kanak Sunder Bibi undertook heavy responsibilities to maintain Pawananjai Kumar Jain till his lifetime in return for a chance of saving the property from the creditors. On these facts, therefore, according to Mr. De, the transferee under the gift was a purchaser for a valuable consideration.
This decision in AIR 1925 Oudh 28 (D), in my opinion, is not free from difficulties, and I for myself, if I may say so with all respect to the learned-Judges who decided that case, fail to find any quid pro quo in that case in the sense in which it has been used in the English cases referred to above.
19. It is true that in the case of AIR 1917 Mad 102 (J) a transfer by a debtor of most of his properties to a few or his creditors for distribution among all the creditors pro rata, made for than three months before the presentation by him of a petition in insolvency, was held to be a transfer for valuable consideration within the meaning of Sections 30 and 38(c), Provincial Insolvency Act and was not considered to be void as against the Official Receiver.
It is also true that in that case the undertaking by the trustees to distribute the assets was considered sufficient, consideration for the conveyance. But here again, if I may say so with all respect to the learned Judges who decided that case, the principle laid down therein is not free from doubt. There Sadasiva Aiyar J. held:
"A responsibility, therefore, taken by a person to whom properties are transferred in consideration of his taking such onerous work seems to me to fall within the expression 'valuable consideration' found in Sections 36 and 38(c), Provincial Insolvency Act. Hence the three creditors who undertook to be trustees of the insolvent's properties for the benefit of all the creditors and have admittedly been discharging the duties of trustees, do come in my opinion within the protection afforded to transferees for Valuable consideration' in Sections 36 and 38."
On the same line the other Judge sitting with him observed:
"The word 'purchaser' in the section is used, , not in the ordinary legal sense of one who has bought a property under a contract of sale and purchase, but means a person who has given valuable consideration: (1888) 20 QBD 732 (F).
I was at first inclined to doubt whether the trustees could be regarded as transferees or purchasers for valuable consideration, but on further consideration I agree with my learned brother that the undertaking of the duties of trustees was a good" consideration. The act or promise in the definition of consideration in Section 2, Clause (d). Contract Act has been described in certain English cases which have been followed in India as something advantageous to the promisor or to a third person or which is onerous or disadvantageous to the promisee: See (1875) 10 Ex 153 at p. 162 (A) and -- 'Mahammadunissa Begum v. J. C. Bachelor', 7 Bom LR 477 (K)."
In my opinion, these observations of the learned Judges are not in line with the view laid down by the English Courts in the decisions referred to above nor there is any indication whatsoever from the facts stated in the judgment that any consideration passed from the side of the trustees in the commercial sense.
I, therefore, as already stated above, with all respect to the learned Judges, feel doubtful as to whether in deciding that case the learned Judges, kept in view the principle of quid pro quo at all.
Further it appears that the principle laid down in the case of AIR 1917 Mad 102 (J) was not subsequently followed even in the High Court at Madras.
20. In the case of -- 'Official Receiver, Cuddapah v. K. Subbian', AIR 1927 Mad 869 (L) their Lordships held that the trustee who took the properties for such distribution with knowledge of the debtor's circumstances was not a purchaser in good faith and for valuable consideration within Section 53, Provincial Insolvency Act. In laying down this rule of law they had considered the view expressed in AIR 1917 Mad 102 (J) and on a consideration of it observed:
"With great deference, I am unable to agree with the decision unless it can be distinguished on the ground that we have no proof here that the transferee ever undertook any onerous work or had been discharging the duties of a trustee. It seems to me perfectly clear from the judgment in (1879) 10 Ch D 622 (E) that a trustee of a post-nuptial settlement of leaseholds for the benefit of the settlor's wife and children is not a 'purchaser' within Section 9L, Bankruptcy Act. Jessel M. R. said that the word 'purchaser' means a 'buyer' in the ordinary commercial sense. In (1888) 20 QBD 732 (F) this case in (1879) 10 Ch D 622 (E) was explained.
In the former case, the father of the settlor had conveyed certain leasehold properties to trustees-on trust for the benefit of the settlor's children. At the same time the settlor assigned a policy of insurance on his life to the same trustee for a like purpose. There was no intention to delay or defeat the creditors of the settlor and the transaction was perfectly bona fide.
The only point was whether the settlement was valid, and the settlor's father, the settlor having become bankrupt, was a purchaser in good faith and for valuable consideration. The Court of Appeal held that he was because the father gave something in order to induce the son to give some, thing. In this there was ample quid pro quo and this was the meaning to be applied to the word 'purchaser'.
As pointed out in (1879) 10 Ch D 622 (E) the trustees had not given something to procure something for other persons nor did they give anything at all. The case in (1879) 10 Ch D 622 (E) according to Lord Esher, decided that such purchasers as those were not purchasers within the section; there must be valuable consideration. Both cases were considered in (1908) 2 KB 169 (G) by the Court of Appeal.
In that case there was a settlement, post-nuptial, made by a bankrupt within two years of his 'bankruptcy in favour of his wife and children in consideration of the wife refraining from taking divorce proceedings against the bankrupt. The majority of the Court of Appeal held that them was valuable consideration according to the findings of fact in the Court below and that the purchaser is equivalent to a buyer, following (1888) 20 QBD 732 (F).
On the other hand, it is something more than a conveyancing term and is not satisfied by a deed such as an assignment of leaseholds, which might render the assignee a purchaser within the Statute of 27 Elizabeth, Ch. 4.
I therefore think that Ex. I comes within the mischief of Section 53 and that the trustee so-called is not a purchaser in good faith and for valuable consideration."
Further in the case reported in AIR 1917 Mad 102 (J) the learned Judges have not given any elaborate discussion on the subject and there is no indication as to whether they at all took into consideration the principle of quid pro quo. I, therefore, for the reasons stated above, think that that decision cannot "be taken as an authority for the view propounded in the case reported in AIR 1925 Oudh 28 (D).
21. The other decision relied upon in the case of AIR 1925 Oudh 28 (D) is that of (1888) 20 'QBD 732 (F). That case has already been discussed above. The facts of that case clearly show that the settlor's father, who was taken as a purchaser, did convey certain leasehold property to the trustees on similar trust. Therefore, in that case there was ample evidence of quid pro quo.
That also, therefore, in my opinion, does not give support to the view taken in AIR 1925 Oudh 28 (D) that a mere responsibility taken by a person to whom properties are transferred in consideration of his taking up a trust thereof falls within the 'expression Valuable consideration' within the meaning of Section 53, Provincial Insolvency Act. I, therefore, think that the law laid down in AIR 1925 Oudh 28 (D) has no binding force and tbat case cannot be relied upon as a good authority in support of the proposition advanced by Mr. De.
Therefore, even if it be accepted that the extraneous evidence is permissible, which I think is not in the circumstances of this case, to be given in, in order to find out that the consideration for the deed of gift was not only obedience and submission but something more, that is, the liabilities to pay all the debts of Pawananjai Kumar Jain and to maintain him till his lifetime, those liabilities do not in law amount to a valuable consideration and cannot constitute quid pro quo within the meaning of Section 53, Provincial Insolvency Act.
22. In this connection it was further contended by Mr. dC that, apart from the question of facts, the donee under the deed of gift dated 1-7-1939 was a universal donee, and, therefore, it followed from it that it was incumbent on the part of the donee to pay up all the debts out of the properties covered by the gift. This legal implication arising from the nature of the document in this case, according to him, by itself constituted a valuable consideration for the gift made to her.
This again is not sustainable. In my opinion, anything done or to be done by a universal donee under a transfer in the form of the mere management of the properties transferred so as to save them from the liabilities standing against the transferor at the time of transfer cannot in law amount to a valuable consideration as contemplated by the expression quid pro quo or within the meaning of Section 53, Provincial Insolvency Act.
The obligation, therefore, in law arising under Section 128, Transfer of Property Act against a universal donee is not a valuable consideration at all for the transfer made to the donee. The argument, therefore, of Mr. De on the point of valuable consideration on the footing of Kanak Sunder Bibi being a universal donee also fails.
23. The last contention advanced on behalf of Mr. De was that the Insolvency Court was wrong to hold that the transfer was not made in good faith and in giving that finding it made an error in thinking that the good faith and intention required under Section 53, -Insolvency Act is one that ought to be on the part of the transferor. So far as the latter part of the contention is concerned,' I think Mr. De is correct.
It is now clearly established by numerous binding authorities that, good faith, that is required under the section, is one on the part of the transferee and also that the onus to prove either lack of good faith or absence of valuable consideration is on the receiver. In the case of -- 'Official Receiver v. P. L.K.M.R.M. Chettyar Firm', AIR 1931 PC 75 (M) their Lordships of the Privy Council relying on the decision of -- 'Official Assignee of the Estate of Cheah Soo Tuan v. Khoo Saw Cheow', AIR 1930 PC 290 (N) observed:
"The decision of the Board in that case was that the Judge had come to the wrong construction of Section 50 by throwing the onus on the transferee. Only one passage from the judgment of the Board need be read: 'Their Lordships are of opinion: (1) that the trial Judge was wrong in his construction of Section 50 of the Ordinance: (2) that there was nothing in the admitted facts to shift the onus of proof to the respondent'.
Their Lordships therefore feel bound to state that the view taken in the District Court in this case as to the burden of proof was wrong. The onus was wrongly laid on the respondents: It was on the Official Receiver."
La the case of -- 'Harry Pope v. Official Assignee', AIR 1934 PC 3 (O), it was laid down :
"The sole question in the case is whether the deed ot sale was a transfer 'in good faith and for valuable consideration' within the meaning of Section 55, and it is dearly for the respondent to establish the contrary in order to succeed in his application: AIR 1931 PC 75 (M)."
in the case of -- 'Macintosh v. Pogose', (1895) 1 Ch. 505 (P), Stirling J., observed:
"Now I am of opinion, that a person is a purchaser in good faith, 'within the meaning of Section 47, Bankruptcy Act of 1883, if he himself act in good faith, and it is not necessary that both parties should act in good faith. I come to this conclusion on three grounds first, because I think that is the natural interpretation of the statute; secondly because it is in accordance with the principles of those bankruptcy cases decided by the Courts before the passing of the Bankruptcy Acts, and, thirdly because it is in accordance with the bankruptcy statutes previous to the Act of 1883.
Now, as to the first reason I think the meaning of the words of Section 47 i.e., purchaser or incumbrancer in good, faith and for valuable consideration is simply this a person who has for valuable consideration acquired property affected with some infirmity without notice of the existence of such infirmity.
Next as to the cases before the passing of the Bankruptcy Act, 1883. This class of cases is well illustrated by the case of -- 'Kevan v. Crawford', (1877) 6 Ch D 29 (Q), I refer to it, not as a binding authority, but merely as showing the principle on which the Court acts in such cases. That clearly shows that in settlements before the Bankruptcy Act, 1885 it was enough if the purchaser for value had no knowledge of any fraud on the part of the settlor.
Lastly in the case of -- 'Butcher v. Stead', (1875) 7 HL 839 (R), the House of Lords held that the words 'in good faith,' in Section 92, Bankruptcy Act of 1869 must be taken to mean without notice that any fraud or fraudulent preference is intended. For these reasons I think that Mrs. Pogose must be treated as a purchaser for valuable consideration in good faith, as it does not appear to me from the evidence that she had notice either direct or constructive of any fraud or fraudulent intention on the part of tile settlor."
Judged from these principles of onus there is I think no difficulty in this case about the discharge of onus by the receiver regarding valuable consideration. Here the deed of gift speaks plainly by itself that the transfer under it is one without consideration. Therefore, on that fact alone the receiver could rely for the discharge of the onus on him to show that there was no valuable consideration for the transfer.
24. So far as the question of the good faith, however, is concerned, that may not be so simple. Mr. De has taken us through the important evidence on the record to show that at least in the family arrangement deed dated 9-12-1938, there is clear indication of the fact though not of its details that Pawananjai Kumar Jain was in debts. Therefore, be contended that it could not very positively be said that in entering into that transaction Pawananjai Kumar Jain concealed his debts or that there was any attempt on his part to withhold that fact from the parties to that document, Secondly, he contended that though in the deed of gift in favour of Kanak Sunder Bibi there is no mention made of the debts standing then against Pawananjai Kumar Jain but that again, according to him, has to be read along with the family arrangement deed and also along with the award at least to show that there was clear provision made under those documents for the payment of the debts incurred by Pawananjai Kumar Jain. Lastly, he relied on the different petitions filed by the donee Kanak Sunder Bibi expressing her willingness to pay up all the debts and also on the factum of certain payments already made by her while the insolvency proceeding had already started.
These circumstances, according to him, disclose that the transferee under the deed of gift had no bad faith in accepting the transfer. That may be so. But the true test in cases like this is not as to the honesty on the part of the transferee to discharge the obligations standing against the transferor. The true test is as to whether the transferee at the time of taking the transfer did or did not honestly know that the transferor was so heavily burdened with debts that there was no property left in him, more than what was needed, to discharge his obligations towards his creditors.
If the transferee honestly knew that the properties were more than the obligations standing against the transferor he may possibly prove that there was no bad faith on the part of the transferee. If, however, there are indications sufficient to prove that the transferee had the knowledge that the debts standing against the transferor were more than the property owned by the transferor then in that circumstance it cannot be said that the transferee when taking the transfer was acting in good faith. The transfer in that case may be proved to have been entered into by the transferee in collusion with the transferor to screen the properties from the reach of the creditors.
In the present case Mr. De also tried to prove that the properties owned by the transferor at the time of the transfer was much more than the debts against him, and, therefore, according to him, there was no justification, to say the donee had any bad faith in accepting the transfer from the transferor. The figures given by him about the value of the properties and about the debts standing at that time against Pawananjai Kumar Jain do, I think go some way to support his contention that the transferee under the deed of gift honestly believed that she would pay up all the debts and save a portion of the property.
I, however, think that it is not necessary to give a concluded finding on the point of bona fide in this case in view of my findings already given above that the transfer was without any valuable consideration and that the donee under the deed of gift was not a purchaser within the meaning of Section 53, Provincial Insolvency Act.
25. On the last two findings alone it has to be held that the deed of gift in favour of Kanak Sunder Bibi is not protected by the saving clause of Section 53, Provincial Insolvency Act and has to be held invalid.
26. The other gift made in favour of Janki Kaharin on 5-5-1939, stands on a still weaker ground. The appeal regarding that case was argued by Mr. Kailash Roy, The application filed by the receiver, to annul this gift was not contested in the insolvency Court. On the face of it, it is a gift and therefore a transfer without consideration.
I have already discussed above as to what constitutes a valuable consideration and looked at from that point of view this document has to be held as one without any valuable consideration. There is no evidence that any valuable consideration within the meaning of Section 53, Provincial Insolvency Act was paid by Janki Kaharin in consideration of the gift made in her favour. It is true that the property under that gift was sold on 9-9-1949, by Janki Kaharin to Ramdeo Pandey for a sura of Rs. 3800/-.
If the transfer in favour of Janki Kaharin is itself hit by Section 53, Insolvency Act because of the absence of valuable consideration for it, there is no reason to hold that the transfer in favour of Ramdeo Pandey is not equally hit by that section. I do not, however, mean to say that in no case a purchaser from a transferee under a transfer made by the insolvent can in law sustain his title for the simple reason that the original transfer made by the insolvent is itself hit by Section 53, Insolvency Act.
He may in certain circumstances defend his title Ion the equitable principle of being a purchaser for value without notice. That, however, is not the case here nor any argument on that line was advanced by Mr. Roy. I therefore, hold that that gift also was rightly annulled by the insolvent Court.
27. The other matter now left for consideration is about the cross-objection filed on behalf of the other insolvent Raj Kumar Jain. Mr. Kanhaiyaji appearing for him contended that the insolvency Court should not only have annulled those two aforesaid deed of gifts under Section 53, Insolvency Act but should have held them void under Section 4, Insolvency Act. The insolvency Court as already stated above, did not pass any order under Section 4, Insolvency Act and I think it was right in not doing so.
There is evidence on the record to show that the gifts were accepted by the donees and that on the footing of those gifts the donees dealt with the properties in due course of business for the discharge of the debts of the donor. Further, it has already been stated above that there is no sufficient evidence on the record to prove that the transfers in favour of Kanak Sunder Bibi or Janki Kaharin were not made in good faith.
And in any view of the matter, it is, I think difficult to hold on the evidence so far brought on the record that the onus of proving lack of good faith, which in law, essentially rests on the receiver, has been at all discharged, for these reasons it is difficult to accept the contention of Mr. Kanhaiyaji that the transfers covered by the aforesaid deeds of gift were 'ab initio' void. Then comes another small point raised by Mr. Kanhaiyaji.
28. In the course of his argument in support of the cross-objection he submitted that the insolvency Court was in any case wrong at least to the extent of laying down that "the annulment will be for the limited purpose of this proceeding and after the discharge of the insolvents any of the gifted property that will be left over will revert to the donees."
This contention of Mr, Kanhaiyaji appears to us to be correct. In earlier part of his judgment the learned Additional District Judge had said, "I propose to confine myself at present only with the question of annulment under Section 53, Insolvency Act, and for this purpose I assume the validity and effectiveness of the gilt, so far as it relates to the share of Pawananjai Kumar. Therefore the question whether the deed of gift was given effect to or not is left over."
If the learned Additional District Judge was not deciding the question as to whether the deed of gift was given effect to or not, his direction that after the discharge of the insolvents any of the gifted property that will be left over will revert to the donees is not justified. The matter must be left for determination at a subsequent stage or by a suit, if and when it becomes necessary to determine the question as to whether any of the gifted property shall revert to the donees or not.
The cross-objection of Mr. Kanhaiyaji will accordingly be allowed only to this extent that the direction given by the learned Additional District Judge as to the reversion of the gifted property will be deleted.
29. Lastly, before I leave the case I cannot fail to observe that it is one of those typical cases which fully justify the maxim that justice delayed is justice denied. The case has been hanging in the insolvency Court for the last fourteen or fifteen years and has not yet been disposed of. The records show that the application for annulment was filed by the receiver on 1-8-1941. Unfortunately that application could not be disposed of till the year 1953.
It was only when the case was transferred to the file of Mr. R.K. Sinha that it could come to its termination on 12-4-1954. Worst than that was the receiver was all this time only busy in getting the documents annulled paying no attention to dispose of at least the properties of the other insolvent Raj Kumar Jain. It appears that perhaps, he had not so far sold any of his properties and has not paid off much of his debts.
It was suggested by Mr. De that the receiver has been all along in the camp of Raj Kumar Jain and his attempt has been only to attack the properties given to the donees and to pay up all the debts both of the father and the son out of those properties alone. This submission on the part of Mr. De cannot be said to be unfounded. I agree with Mr. De that if the receiver would have managed things properly, much of the difficulties could have been avoided and by this time at least the debts standing against the other insolvent Raj Kumar Jain would have been paid.
I therefore leave it for the insolvency Court to decide as to whether in the circumstances of this ease it is advisable to appoint some other receiver for the proper management of the estate and speedy payment of all the debts. Further it appears that under the deed of family arrangement one of the two houses mentioned in its schedule B was to be sold by Pawananjai Kumar Jain in order to pay up all the joint family debts and the other was to beheld by the father and son in equal shares. The interest of Pawananjai Kumar Jain in those two houses was also transferred to the donee under the deed of gift dated 1-7-1939.
30. It is said that one of the houses was in mortgage and was, as already stated above, got sold, in the court sale for a sum of Rs. 27,000/- in the execution of the mortgage decree. Out of that consideration Rs. 10,700/- was taken by the decree-holder towards the satisfaction of his decree. The remaining amount to the extent of Rs. 16,300/- should I think, have been left for the payment of other family debts as stipulated in the family arrangement deed.
Unfortunately, the receiver instead of leaving that money for the payment of the family debts, according to the terms of the family arrangement deed, claimed half of Rs. 27,000/- as the share of the son Raj Kumar Jain with the result that only the remaining half of the consideration of that house could be appropriated towards the satisfaction of the family debts. Now it is said that the otheT house should also be divided in equal share between the father and the son. In my opinion, this is contrary to what is stipulated in the family arrangement deed.
One of the two houses mentioned in Schedule B has already been sold and out of it half the price has been realised by the receiver on behalf of the son. Therefore, I hold that the other house mentioned in Schedule B, which has not so far been sold, should be treated as the property of Pawananjai Kumar Jain given to him under the family arrangement deed for the payment of family debts' on conditions mentioned therein, and the order of the insolvency Court to that extent is set aside.
31. In the result, therefore Appeal No. 133 of 1954 on behalf of Kanak Sunder Bibi is dismissed subject to the modification stated above, 'while Appeal No. 219 of 1954 filed on behalf of Kamdeo Pandey is dismissed. The cross-objection of Raj Kumar Jain is allowed to the limited extent indicated above, namely, that the question whether any part of the gifted property will revert to the donees or not is left over for decision at a subsequent stage or by a suit, if and when the determination of that question becomes necessary.
In the peculiar circumstances of these cases, there will be no order for costs. The Insolvency Court will now take up the matter at its earlier convenience and will try to dispose of the cases as early as possible.
Das, C.J.
32. I agree.