Rajasthan High Court - Jaipur
Dharam Narain And Ors. vs Firm Badridas Dwarakadas And Ors. on 19 November, 1991
Equivalent citations: 1991WLN(UC)224
JUDGMENT N.K. Jain, J.
1. This miscellaneous appeal Under Section 75(2) of the provincial Insolvency Act is directed against the order passed by learned Addl. Dist. Judge, Jodhpur dated 22.3.1991 passed in insolvency case No. 1/81.
2. Brief facts which give rise to this appeal are that the appellants moved an objection application on 12.5.73 with the allegation that on the application dt. 21.5.74 of creditors Gulabchand, Dwarakadas and Ors. the firm Shyamdas Badridas together with their partners Badridas and Udairaj were adjudicated insolvents on 6.11.54. They submitted an application for discharge on 7.11.55. The insolvents and their creditors submitted a proposal for composition on 23.1.1967 which was approved by the court Under Section 39 of the provincial Insolvency Act by its order dt. 25.2.1971. The Court receiver was appointed 27.4.54. The insolvents submitted an application for discharge on 12.5.73. The Insolvency Court discharged Badridas as well as Udairaj on 16.10.73. The two houses and one plot belog to Badridas and one house subject to mortgage which belongs to Udairaj were there according to the composition. Out of these properties two houses and one plot were sold and creditors were paid total amount of claim with interest upto 6.11.54. The receiver submitted an application on 13.11.81 that the house of insolvent Udairaj mortgaged to Rs. 10000/- in 1954 may be allowed to sold subject to mortgage as period of limitation is to expire. As Udairaj expired, a Ujardari was filled by Smt. Mathuradevi widow of Udairaj and her sons on 10.1.83 that the disputed house cannot be put to auction as it is a joint property. The receiver has filed reply stating that the objectors cannot become owner only on the basis of name in the patta. The learned trial court dismissed Ujardari on 23.4.83. A miscellaneous appeal No. 182/83 was filed in this Court and the case was remanded vide its order dated 10.6.84 but again after considering the question framed by this Court, the learned trial court dismissed it on 22.3.91. Hence, this appeal.
3. Mr. H.C. Jain, learned Counsel for the appellant has submitted that the learned court has erred in rejecting the objections as sufficient time was given to creditors but no evidence has been adduced and has wrongly come to the conclusion that the disputed house was the property of the firm without any finding. It was further contended that the disputed house cannot be auctioned for the payment of interest as it does not belong to the firm and the same is of Udairaj and his HUF and the possession of the attached house be given back to the appellants L.Rs. of deceased Udairaj and also submitted that the property of the insolvent be discharged.
4. Mr. G.R. Singhvi, learned Counsel for the respondent has not disputed and admitted that entire dues have been paid but submitted that the property is to be retained for the payment of future interest and has also submitted that without other creditors having been made a party this question cannot be decided.
5. I have heard learned Counsel for the parties at length and perused the record carefully.
6. The point for consideration in this case is as to whether the receiver is entitled to keep the property for the payment of future interest to be accrued and whether the disputed house belongs to Udairaj alone or it was a joint family property.
7. A perusal of the record reveals that Jagannath vide his statement dt. 5.4.54 has submitted that on 5.11.51, the disputed house was purchased by Udairaj alongwith his sons Murlidhar and Dharam Narain and partnership was formed on 10.2.52 by a registered partnership deed. A reference to this effect has been made in the order dt. 3.3.56 that Udairaj became partner on 10.2.52 and as per attached schedule in all there were 35 creditors. The interim receiver was appointed on 27.4.54 and the firm was declared insolvent on 6.11.54 and Badridas and Udairaj were held as the insolvents by the order dt. 6.11.54 and their claims were determined on 15.2.62 and Rs. 86543.18 were received by the creditors. In misc. appeal No. 182/83 Smt. Mathuradevi v. Gulabdas Dwarkadas decided on 10.5.84, it was observed by this Court that the respondent has not supported the order of the Additional Dist. Judge holding that the property belonged to Udairaj alone. But he proceeded on the presumption that even if the property belonged to the joint Hindu Family, consisting of Udairaj and his sons, the property was liable to be sold for realisation of the debts of Udaraj, even in his capacity as a partner of the firm Badridas Shyamdas. After remand the following issue was framed on 3.11.87:
vk;k oknxzLr lEifRr es iq=x.k ds fgLls dks cspdj QeZ cnzhnkl ';kenkl ds Hkkxhnkj mn;jkt ds iq= dh vnk;xh ,ulhMsUV MsIV gksus ds dkj.k fd;k tk ldrk gS ftl ij lk{; dk izFke Hkkj ftles fjlhoj j[kk tkrk gS \ Thereafter receiver was examined as a withness.
esjs ikl miyC/k jsdkMZ es Li"V ugh gS fd fookfnr jde ls gh fookfnr edku [kjhnk x;k FkkA QeZ us ;g edku ugh [kjhnk A It is clear from the statement of the receiver that he has not discharged the burden. In view of this the learned court below has erred in holding that objectors have failed to give evidence despite sufficient opportunity and thus it has wrongly come to the conclusion that the property belongs to firm without giving specific finding as per direction of this Court, therefore, the impugned order cannot be sustained on this count and, the property cannot be put to auction.
8. So far as the point regarding pendente lite interest is concerned for which the Receiver wants to retain the property. On 15.2.62, the Insolvency Court has allowed the interest to the date of application but expressly disallowed the interest after that date.
9. A bare perusal of Section 33 of the Insolvency Act shows that the order of refusal of interest was appealable but no appeal has been preferred by any of the creditor, therefore, the order has become final.
10. No doubt, the courts have power to award interest but the power cannot be exercised by the Execution Court in the absence of any direction in the decree.
11. In State of Punjab v. Kishan Dayal Shanna 1990 S.C. 2177 it has been observed that the Execution Court is bound by the terms of the decree, it cannot add or alter the decree on its notion of fairness or justice. The right of the decree holder to obtain relief is determined in accordance with the terms of the decree. Their Lordship of the Supreme Court has further held that the direction issued by the Executing Court to pay pendente lite and future interest not claimed in the suit is illegal.
12. Admittedly, in the instant case the receiver has paid cent percent claim including interest allowed by the court and there was no direction for the payment of future interest, rather it has been disallowed by the order dt. 25.2.62, so the question of payment of future interest does not survive in view of State of Punjab v. Kishan Dayal Shanna (supra). The creditors are also debarred to get future interest in view of the explanation V of Section 11 of the Civil Procedure Code, which provides that "any relief claimed in the plaint, which is not expressly granted by the decree, shall for the purposes of this section, be deemed to have been refused."
Apart from that the Receiver had already paid entire dues of the creditors. It has also come on record that after paying full amount surplus amount of Rs. 5000/- has been paid to one Legal Representative of Badridas. The occasion of paying surplus amount could only arise when nothing remained due to the creditors. The Law of insolvency has been enacted to enable the financial wreck or has heir to start a new life and not for breaking their back for paying interest refused by the court itself.
13. So far as the objection of Receiver that all creditors are not made party is concerned it has come on record that the receiver was made a party in individual capacity representing the creditors as well as the court receiver but nothing has been produced by the Receiver in support of the claim of the creditors that they are entitled to get future interest. As stated above, both the parties have agreed that the creditors have received full amount of Rs. 86543.18 with interest to the date of application. Therefore, the objection of the Receiver has no substance.
14. It is manifestly erroneous to sale or retain the house of sons of Udairaj for paying future interest after a long gap particularly when once it has been disallowed in the year 1962. Therefore, in any view of the matter as discussed above, it would not be desirable that the property be now allowed to remain with the receiver. In my view, the order of learned Addl. Dist. Judge cannot be sustained and I deem it just and proper that the disputed house may be given to the sons of Udairaj, the appellants.
15. In the result, this appeal is allowed. The order passed by learned Addl. Dist. Judge dt. 22.3.91 is set aside. The disputed house may be given to the appellants, the sons of Udairaj within two months.