judgement:
vil Appeal No. 331 of 1961.
Appeal from the judgment and decree dated March 29, 1956, of the Andhra Pradesh High Court in Appeal Suit No. 182 of 1950.
B. Manavala Chowdhry and B. K. B. Naidu, for the appellants.
Narasiah Chowdhry and R. Gopalakrishnan, for Respondents Nos. 1, 2 and 8.
987 1963.
May 10.
The judgment of the Court was delivered by DAS GUPTA J.
This appeal brought on a certificate granted by the High Court of Andhra Pradesh is against a decision of that Court reversing a decree granted by the Subordinate judge, Masulipatnam, dismissing a suit for partition.
Of the three plaintiffs who brought the suit, two claimed to be the reversioners of Boppanna Chandrappa, to whom we shall refer to as Chandrappa, and the third a purchaser of the interest of some of the reversioners, viz., defendants 4, 5 and 7.
According to the plaint the three plaintiffs were thus entitled to a 5/6th share of the properties while the 6th defendant was entitled as a reversioner of Chandrappa to the remaining 1/6th share.
The property was however in the actual possession of the three sons of Nagayya who were impleaded as the first three defendants.
In contesting the suit these defendants denied that these properties had ever belonged to Chandrappa and further that the plaintiffs 1 and 2 or the defendants 4, 5, 6 and 7 were his reversioners.
The main defence however was that even if the properties did belong to Chandrappa, the defendant 's father Nagayya became entitled to these as Chandrappa 's illatom son in law.
The basis of this plea of illatom son in lawship was said to be that Chandrappa had brought Nagayya into his family under an arrangement that the latter would marry his wife 's sister 's daughter Mangamma and help him in cultivation and management of the properties, in consideration of which Nagayya would inherit the entire property after Chandrappa 's death.
The Trial Court held that all the suit properties except a small portion did belong to Chandrappa 988 and the plaintiffs would be entitled to 5/6th share of Chandrappa 's properties and the 6th defendant to the remaining 1/6th share, on the death of Chandrappa 's widow Ramamma.
He however accepted the defence case that Nagayya had become entitled to the property on Chandrappa 's death as Chandrappa 's illatom son in law and accordingly dismissed the suit.
On appeal, the High Court held that the custom by which an illatom son in law inherited property could not be extended to a case where the marriage took place not with the daughter of the owner of the property but with some other relation of his.
The High Court also rejected an alternative plea that appears to have been raised before it that Nagayya became entitled to the property on the basis of a contract between him and Chandrappa.
In this view of the law, the High Court set aside the order passed by the Trial Court and decreed the suit.
It is no longer disputed before us that the rights of an illatom son in law cannot be claimed by a person who under a promise from the owner of the property that he would inherit the property marries not the daughter but some other relation of the owner of the property. 'The alternative contention which was raised before the High Court has however been repeated before us, It has been urged that there was a good and valid contract between Chandrappa and Nagayya, that in consideration of Nagayya marrying Mangamma and looking after Chandrappa 's property, Chandrappa would make him his heir and that the consequence of this contract was that Nagayya became Chandrappa 's heir.
The question here is not whether on Chandrappa 's death Nagayya could have obtained specific performance of the alleged contract.
For, assuming that there was a contract as alleged and that it was a valid contract, enforceable at law and also such of which specific performance could 989 have been obtained by proper proceedings in courts, the appellants ' rights would be to seek such specific performance.
The contention on behalf of the appellant is that even though specific performance has not been sought or given the contract itself would have the effect of transferring interest in the property to Nagayya on Chandrappa 's death.
In support of this contention the learned Counsel relied on three decisions of High Courts in India and also a decision of the Privy Council.
The first decision in point of time is the case of Challa Papi Reddi vs Challa Koti Reddi (1).
The facts there were that the defendant 's father who was selected by Musalireddi, in pursuance of a special custom, as a son in law who should take his property as if he was a son entered into possession of the property on Musalireddi 's death.
lie then associated with himself the plaintiff in the management of his property on promise of a share.
The plaintiff continued thus for many years, aiding in the management and improvement of the property, until a short time before the suit was brought, the first defendant turned the plaintiff out of doors and refused to give him the promised share.
The High Court of Madras held that the agreement by the first defendant 's father was to the effect that the plaintiff was being admitted to the rights of a co sharer and further, as there was a complete adoption or ratification of the father 's contract by the first defendant he ought to be held to it and the plaintiff was therefore a co sharer in the property.
It has to be mentioned that this case was decided long before the was enacted and the question whether a written document was necessary for transfer did not come up for consideration.
In Bhalla Nahana vs Prabhu Hari (2), which was the next case cited, what happened was that one Gosai (1) (1872) 7 Mad.
H.C.R. 25.
(2) 990 Ramji induced the parents of the defendant Prabhu Hari to give him in adoption by an express promise to settle his property upon the boy but died before such settlement could be executed.
Nearly 30 years after his death Ramji 's widow Bhani gave effect to her husband 's undertaking by executing a deed of gift of his property in her hands in favour of Prabhu Hari.
The reversioner to Gosai Ramji 's estate con tested in a suit brought by him, the validity of this alienation.
In holding that the alienation was valid, the High Court of Bombay pointed out that the performance of a husband 's contracts was among the proper and necessary purposes specified by Hindu jurists under which a widow could alienate property and said further that the equity to compel the heir and legal representative of the adoptive father specifically to perform his contracts survived and the property in the hands of his widow was bound by that contract.
Whether Prabhu Hari would have been entitled to the property even in the absence of the deed of gift did not fall for consideration in that case.
It also deserves to be Mentioned that this case was also decided several years before the came into force.
In Asita Mohon Ghosh Moulik vs Mohan Ghosh Moulik (1), one of the questions in dispute was whether the adopted son could take an equal share with the son Answering the question in the affirmative, the High Court of Calcutta after deciding that under the Hindu Law the adopted son was entitled to an equal share, also referred to an Ikrarnama which had been executed by the adoptive fatherland holding that the Ikrarnama was valid and operative, said that even apart from the law, the adopted son, would be so entitled.
It is difficult to see how this can be of any assistance in solving our present problem.
(1) 991 Lastly, the learned Counsel relied on the decision of the Privy Council in Malraju Lakhmi Venkayyamma vs Ventaka Narasimha Appa Rao (1).
The main question in controversy in that case was whether there was a completed contract by which the Rani, the former owner of the property had agreed that the possession of the property would be given to her niece Venkayyamma Rao immediately upon the expiry of her life interest.
The Privy Council held that there was such completed contract and directed the Receiver to deliver possession "upon the terms of the contract now affirmed".
It may be mentioned that this decision in Venkayyamma Rao 's Case (1), was among the authorities on which the Calcutta High Court relied in Ariff vs Jadunath Majumdar (2).
The High Court held that the result of equitable principles which had been applied in many cases in England and were also applied by the Privy Council in Venkayyamma Rao ' Case was that the defendant had acquired the rights of a permanent tenant.
When this very case went up to the Privy Council in appeal (1), the High Court 's decision was reversed.
The Privy Council pointed out that the dicta in Venkayyamma Rao 's Case did not mean "that equity can override the provisions of a statute and (where no registered document exists and no registrable document can be procured) confer upon a person a right which the statute enacts, shall be conferred only by a registered instrument".
This decision of the Privy Council in Ariff vs Jadunath Majumdar (2), was given in January 1931.
Nearly two years before that section 53A had been enacted in the introducing in a limited form the doctrine of equity of part performance.
There can, in our opinion, be no doubt that after section 53A was enacted the only case in which the English doctrine of equity of part performance could (1) (1916) L. R. 43 I.A. 138.
(2) (1930) 1.
(3) (1931) L. R. 58 1.
A. 91.
992 be applied in India is where the requirements of 53A are satisfied.
Quite clearly, section 53A does not apply to the facts of the present case.
It must therefore be held that the considerations of equity cannot confer on Nagayya or his heirs any title in the lands which under the statute could be conferred only by a registered instrument.
Our conclusion therefore is that the High Court was right in holding that Nagayya or his heirs had acquired no right in the property.
The appeal is accordingly dismissed.
In the circumstances of the case, we make no order as to costs.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The plaintiffs brought a suit for partition, two of them claimed to be the reversioners of Chandrappa and the third a purchaser of the interest of the reversioners, defendants 4, 5 and 7.
They were thus entitled to a 5/6th share of the properties while the 6th defendant was entitled as a reversioner of Chandrappa to the remaining 1/6th share.
The property was in the possession of the three sons of Nagayya, the first three 986 defendants, who denied these properties ever belonged to Chandrappa and also that the plaintiffs 1 and 2 or defendants 4 to 7 were his reversioners.
The main defence was that even if the properties belonged to Chandrappa, the defendants ' father Nagayya became entitled to these as Chandrappa 's illatom son in law, on the basis that Chandrappa had brought Nagayya into his family under an arrangement that the latter would marry his wife 's sister 's daughter Mangamma and inherit the entire property after Chandrappa 's death.
The trial court dismissed the suit.
On appeal the High Court set aside the order and decreed the suit.
On certificate, the only contention, raised by the appellant in this court was that even though specific performance had not been sought, the contract itself would have the effect of transferring interest in the property to Nagayya on Chandrappa 's death.
Held that after enactment of section 53A in the , the only case in which the English doctrine of equity of part performance could be applied in India is where the requirements of section 53A are satisfied.
In the instant Case, 53A has no application.
It must be held therefore that the considerations of equity cannot confer on Nagayya or his heirs any title in the lands which under the statute could be conferred only by a registered instrument.
The appeal, therefore, must be dismissed.
Challa Papi Reddi vs Challa Koti Reddi, (1872) 7 Mad.
H C. R. 25; Bha 'a Nahana vs Parbhu Hari, (1877) 2 I.L.R. Bom.
67; Asita, Mohan Ghosh Moulik vs Mohan Ghosh Moulik, (1016) 20 G.W.N. 901; Venkatayyamma Rao vs Appa Rao, (1916) L. R. 43 1.
A. 138; Ariff vs Jadunath Majamdar, Cal. 1235, held inapplicable.
Ariff vs Jadunath Majumdar, (1931) L. R. 58 I.A. 91, relied on.


judgement:
Civil Appeal No. 98 of 1962.
Appeal from the judgment and decree dated March 7, 1957, of the Bombay High Court in First Appeals Nos. 897 of 1951 and 66 of 1952.
section section Shukla for the appellant.
G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondents Nos. 1, 3 and 7.
A.V. Viswanatha Sastri and Sardar Baliadur, for respondent No. 2.
522 1963.
May 2.
The judgment of the Court was delivered by WANCHOO J.
This is an appeal on a certificate granted by the Bombay High Court and arises out of a suit filed by the appellant as a Hindu reversioner to recover possession of properties alienated by a Hindu widow.
The property in suit was the self acquired property of one Ganpatrao jairam who died in 1894 leaving behind two widows, Annapurnabai and Sarswatibai.
Ganpatrao had executed a will by which property in village Dahisar was given to Annapurnabai and property in village Nagaon was given to Sarswatibai.
The will further provided that a dwelling house together with structures and open land situate at Thana would remain with his two wives who would enjoy the same.
There were other dispositions in the will with which we are however not concerned now.
Annapurnabai was also authorised to make an adoption on the advice of the executors appointed under the will; but the adopted son was to have no right or connection with the movable and immovable property devised to Annapurnabai during her life time and was to take the property devised to her only after her death.
The adopted son was also to take the immovable property bequeathed to Saraswatibai after her death.
It may be added that no son was adopted by Annapurnabai and this aspect of the matter therefore need not be considered further.
Annapurnabai died on September 17, 1915, and she had executed a will before her death.
After Annapurnabai 's death, Saraswatibai began to manage the property.
It may be added that Sarswatibai had adopted a son, but this was saidto beagainst the provision in the will of herhusband which specifically directed that she could only adopt if Annapumabai died without making an adoption from amongst the family on the advice of the executors.
There was therefore 523 litigation in connection with the adoption between Saraswatibai and Balkrishna Waman, one of the legatees under the will of Ganpatrao, which ended in favour of Balkrishna Waman.
Saraswatibai died in 1943.
The case of the appellant was that the will of Ganpatrao merely gave widow 's estate to Annapurnabai and Saraswatibai.
Consequently Annapurnabai could not dispose of the property given to her by will and the bequests made by her were not binding on the appellant as the next reversioner.
It was also alleged that the will made by Annapurnabai was vitiated by the exercise of undue influence brought to bear on her by Balkrishna Waman, who was the husband of her niece.
Saraswatibai also made certain alienations and the appellant contended that the sale by Saraswatibai was due to the undue influence exercised on her by Balkrishna Waman, and in any case there was no legal necessity for transfer and therefore the transfer was not binding on the appellant.
The main defendant in the suit was Ganesh, a son of Balkrishna Waman.
In addition there were twelve other defendants who were alienees in possession of the property and were joined in the suit as the appellant prayed for recovery of possession from them also.
The suit was resisted by the main defendant Ganesh for two main reasons.
It was first contended that the appellant was an undischarged insolvent at the time succession opened in 1943 and therefore whatever property might come to him as a reversioner vested in the official receiver.
Therefore, the appellant had no right to bring a suit to recover possession even after his absolute discharge because the property never vested in him.
Secondly, it was contended that by his will Ganpatrao had granted an absolute estate to the two widows and therefore 524 Annapurnabai had full right to make a will with respect to the property given to her and Sarswatibai had the right to make alienations if she thought fit.
Besides these two main defences, it was also contended that the appellant was not the nearest reversioner and the alienations made by Sarswatibai were for legal necessity.
The same defence was raised by the other defendants.
In addition the alienees from Sarswatibai contended that they were bona fide pur chasers for value without notice of the defect in their vendor 's title and therefore the alienations made in their favour could not be set aside.
They further pleaded that they had made substantial improvements on the properties purchased by them.
On these pleadings as many as eighteen issues were framed by the trial court.
Two of these issues covered the two main defences which were raised, namely, (1) Is the plaintiff entitled to maintain the suit due to his insolvency as alleged by the defendants? (3) Had Annapurnabai no authority to will away the properties in her possession? The trial court held that the plaintiff was entitled to maintain the suit.
The third issue obviously raised the question whether the bequest to Annapurnabai was that of widow 's estate or an absolute bequest, and the trial court held in that connection that the bequest to Annapurnabai was that of widow 's estate and therefore she had no right to will away the properties in her possession.
The trial court also gave findings on the remaining issues and finally declared that the alienations made by Saraswatibai on March 29, 1930 and April 16, 1935 were not for legal necesssity and therefore were not binding on the appellant and the defendants of the suit were directed to deliver 525 possession of the suit properties to the appellant.
Inquiry as to mesne profits was also directed and Rd finally the trial court ordered that notice be given to the receiver in the insolvency application No. 48 of 1939 to consider if he wanted the property to be made available for distribution amongst creditors in the aforementioned application.
The defendants then went in appeal to the High Court and two separate appeals were filed one by original defendant No. 3 and the other by original defendant No. I and some others.
The two appeals were heard together by the High Court and the two principal questions which arose, according to the High Court, were as to (i) the effect of the dispositions made by Ganpatrao under his will, and (ii) the right of the plaintiff to maintain the suit when he was, at the date when the succession opened, an undischarged insolvent, These two questions, it will be seen, correspond to the two issues raised by the trial court, which we have set out above.
The High Court first considered the right of the plaintiff to maintain the suit and held that the plaintiff had no right to maintain the suit, as he was an undischarged insolvent at the time the succession opened and he could not maintain the suit even after his absolute discharge.
The High Court further held that the disposition in favour of Annapurnabai of the property in Dahisar amounted to conferment of absolute estate on her and further that the disposition in favour of Saraswatibai of the property in Nagaon amounted to conferment of absolute estate on her.
On these findings the High Court dismissed the suit.
Thereupon the appellant applied for a. certificate which was granted; and that is how the matter has come up before us.
526 The first question that falls for consideration is whether the appellant can maintain the suit.
It is necessary in that connection to see what the facts are with respect to the insolvency of the appellant.
The appellant had filed an insolvency application in 1939 and was adjudged insolvent on March 11, 1940 and two years time was granted to him to apply for discharge.
The appellant applied for discharge on July 6, 1942 and he was granted an absolute discharge in January, 1944.
The succession to the estate of Ganpatrao had however opened on May 4, 1943 when the appellant was still an undischarged insolvent.
Consequently, the case of the defendants respondents was that under section 28 (4) of the Provincial Insolvency Act, No. 5 of 1920, (hereinafter referred to as the Act), the property which devolved on the insolvent after the date of the order of adjudication and before his discharge forthwith vested in the court or receiver.
It is further urged that the property having vested in the court or receiver it must remain so vested even after the absolute discharge of the appellant for the order of absolute discharge merely absolved the insolvent from liability from payment of debts other than those mentioned in section 44 of the Act.
Therefore when the suit was brought in 1947 after the discharge the appellant had no title in the property as the title still vested in the court or receiver, and consequently the appellant could not maintain the suit for ejectment against those in possession of the property as he had no title on which he could base his right to sue for ejectment.
The question therefore that arises for determination is whether an insolvent on whom property devolves when he is an undischarged insolvent can maintain a suit for the recovery of the property after his absolute discharge.
The decision of that depends on what effect the order of absolute discharge has on the insolvent 's title to the property 527 which develoved on him when he was still an undischarged insolvent.
It is to this narrow question, (namely, whether a suit brought by an insolvent after his absolute discharge with respect to property which devolved on him when he was an undischarged insolvent can be maintained by him), that we address ourselves hereafter.
In view of this narrow question it is in our opinion unnecessary to consider those cases on some of which the High Court has relied which deal with the, right of the insolvent to maintain a suit while he is still an insolvent.
What we say hereafter will only apply to a case where the suit is brought by an insolvent after his absolute discharge, though the right to property which is in suit devolved on him when he was an undischarged insolvent.
It will be necessary in this connection to consider briefly the scheme of the Act, to decide exactly what the consequences are when an absolute discharge is granted to an insolvent.
Section 6 of the Act defines what are acts of insolvency.
Section 7 gives power to a debtor or a creditor to make an application for insolvency, if the debtor has committed an act of insolvency.
Section 9 deals with applications made by creditors and section 10 by debtors.
Section 19 provides for the procedure for hearing an insolvency petition.
Sections 20 and 21 provide for interim proceedings against the debtor and appointment of an interim receiver.
Section 25 provides for dismissal of the petition on grounds mentioned therein Section 27 gives power to the court to make an order of adjudication and the Court also has to fix a time therein within which the debtor shall apply for his discharge.
Section 28 with which we are mainly concerned lays down the effect of an order of adjudication.
Sub section (2) thereof provides that on the making of an order of adjudication, the whole of the property 528 of the insolvent shall vest in the court or in a receiver and shall become divisible among the creditors Under sub section
(7) this vesting will relate back to and take effect from the date of the presentation of the petition on which the order of adjudication is made.
Sub section (4) which is also material lays down that "all property which is acquired by or devolves on the insolvent after the date of an order of adjudication and before his discharge shall forthwith vest in the court or receiver, and the provisions of sub section
(2) shall apply in respect thereof." This sub section undoubtedly vests in) the court or receiver any property which the insolvent acquires after the order of adjudication and before his discharge or which devolves on him in any manner, and such vesting takes place forthwith Section 33 provides for the making of a schedule of creditors after the order of adjudication and section 34 lays down what debts are provable under the Act.
Section 56 provides for the appointment of a receiver and section 59 lays down the duties and powers of the receiver Scction 61 provides for priority of debts and section 62 for calculation of dividends.
Section 64 lays down that when the receiver has realised all the property of the insolvent or so much thereof as can, in the opinion of the court, be realised without needlessly protracting the receivership, he shall declare a final dividend.
But before doing so, the receiver has to give notice to persons whose claims as creditors have been notified but not proved, that if they do not prove their claims within the time limited by the notice, he will proceed to make a final dividend without regard to their claims.
After the expiration of such time, the property of the insolvent shall be divided amongst the creditors entered in the schedule without regard to the claims of any other persons.
Then comes section 67 which lays down that " 'the insol vent shall be entitled to any surplus remaining after payment in full of his creditors with interest as 529 provided by this Act, and of the expenses of the proceedings taken thereunder.
" It is clear from this scheme of the Act that the entire property of the insolvent belonging to him on the date the petition for insolvency is made vests in the receiver under section 28 (2).
Further under section 28 (4) if any property is acquired by the insolvent or devolves on him after the order of adjudication and before he is discharged, that property also vests in the court or receiver forthwith.
The receiver has to administer the property so vested in him and he has the power to sell the property and do various other acts provided in section 59 for the purpose of the administration of the property.
Generally speaking the receiver sells the property which vests in him and then distributes the money amongst the creditors who have proved their debts.
But before the receiver declares the final dividend he has to give one more opportunity under section 64 to creditors who might not have proved their debts at the earlier stage, to come and prove their debts.
This will generally happen when all the property of the insolvent has been disposed of by the receiver, though section 64 contemplates that the final dividend may be declared even if some property has not been disposed of when in the opinion of the court it will needlessly protract the receivership.
Section 67 then finally provides that if any surplus is left in the hands of the receiver after payment in full to the creditors with interest and of the expenses of the proceedings under the Act, the surplus is to be paid to the insolvent.
As we have said already, the final dividend is generally declared after all the property of the insolvent is disposed of but there may be cases when a final dividend may be declared without the disposition of all the property of the insolvent if in the opinion of the court that would result in needlessly protracting the receivership.
But it is clear that under section 67 if there is 530 any surplus remaining in the hands of the receiver that surplus has to go to the insolvent.
Though this is the general scheme of the Act with reference to administration of property which vests in the receiver after an order of adjudication, there are two exceptions which may be noticed.
Section 35 provides that where, in the opinion of the court, a debtor ought not to have been adjudged insolvent, or where it is proved to the satisfaction of the court that the debts of the insolvent have been paid in full, the court shall, on the application of the debtor, or of any other person interested, by order in writing, annul the adjudication.
Section 37 then provides that "where an adjudication is annulled, all sales and dispositions of property and payments duly made, and all acts therefore done, by the court or receiver, shall be valid ; but, subject as aforesaid, the property of the debtor who was adjudged insolvent shall vest in such person as the court may appoint, or, in default 'of such appoint ment, shall revert to the debtor to the extent of his right or interest therein on such conditions (if any) as the court may, by order in writing, declare.
" Special stress has been laid on behalf of the respondents on the provision in section 37 which specifically lays down that the property of the debtor in case of annulment shall vest in such person as the court may appoint or in default of such appointment shall revert to the debtor, thus divesting the court or the receiver of the property which had vested in them under section 28 (2) or section 28 (4).
The second exception is to be found in section 38 which allows compositions and schemes of arrangement.
Section 39 then provides that if the court approves the composition or the scheme of arrangement, the terms shall be embodied in the order of the court and the order of adjudication shall be annulled and the provisions of section 37 shall apply to such annulment.
531 Lastly, we come to what happens where the estate of the insolvent has been administered in the usual way which we have set out already.
Section 41 authorises the debtor to apply for an order of discharge.
On such an application the court has to consider the objection, if any, made by any creditor and also the report of the receiver in case a receiver has been appointed and thereafter the court may (a) grant or refuse an absolute order of discharge ; or (b) suspend the operation of the order for a specified time ; or (c) grant an order of discharge subject.to any conditions with respect to any earnings or income which may afterwards become due to the insolvent, or with respect to his after acquired property.
Section 42 then lays down in what circumstances the court, shall refuse to grant an absolute order of discharge ; and we may refer to only cl.
(a) of section 42 (1) in that connection which gives power to the court to refuse to grant an absolute order of discharge if it finds that the insolvent 's assets are not of a value equal to eight annas in the rupee on the amount of his unsecured liabilities, unless the in solvent satisfies the court that the fact that the assets are not of a value equal to eight annas in the rupee on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible.
Section 43 provides that if the debtor does not apply for discharge within the period fixed by the court, or does not appear on the day fixed for hearing his application for discharge, the court may annul the order of adjudication or make such other order as it may think fit, and if the adjudication is so annulled, the provisions 532 of section 37 shall apply.
Section 44 then provides for the effect of the order of discharge.
Sub section (1) thereof mentions the debts from which the insolvent will not be released on an order of discharge.
Subsection (2) then provides that "save as otherwise provided by sub section (I.), an order of discharge shall release the insolvent from all debts provable under this Act.
" Stress is laid on behalf of the respondents on this provision and it is urged that though sub section
(2) provides that the insolvent shall be released from all debts provable under the Act, it does not provide for revesting any property in the insolvent on an order of discharge.
It is thus clear from the above analysis of the provisions of the Act that if there is no annulment of the adjudication and no sanction of a composition or scheme of arrangement resulting in an order of annulment, insolvency proceedings terminate generally after the administration of the properties is complete and a discharge is granted.
The discharge may be absolute in which case the consequences mentioned in section 44 (2) apply.
On the other hand discharge may be conditional in which case also the consequences of section 44 (2) apply subject to the conditions attached to the discharge in accordance with sub section
41 (2) (c).
Further in considering whether an absolute order of discharge should be granted or not.
the court has to consider whether the in solvent 's assets are of a value equal to eight annas in the rupee on the amount of his unsecured liabilities.
Further before granting a discharge the court has to consider the report of the receiver if one is appointed.
It is therefore reasonable to think that generally speaking an order of discharge will only be made after the court has considered the report of the receiver and has also considered that the assets of the insolvent ; are of a value equal to eight annas in the rupee on the amount of his unsecured liabilities.
It is also not unreasonable 533 to think in view of all the provisions that no order of discharge will generally be made till all the assets of the insolvent are realised, (see section 64), though, as we have already pointed out, it is possible to declare a final dividend even though all the property of the insolvent has not been realised if in the opinion of the court such realisation would needlessly protract the receivership.
In such a case however the court would generally pass an order protecting the interests of the creditors with respect to the property which has not been realised before the order of discharge.
Finally there is section 67, which provides that if there is any surplus remaining after payment in full of his creditors with interest and of the expenses of the proceedings taken under the Act, it shall go to the insolvent.
The key to the solution of the narrow question posed before us is in our opinion to be found in section 67.
It is true that section 44 when it provides for the consequences of an order of discharge does not lay down that any property of the insolvent remaining undisposed of will revest in him and to that extent it is in contrast to section 37, which provides for the effect of an order of annulment and in effect lays down that all sales and dispositions of property made by the receiver shall be valid, but if any property remains undisposed of it shall vest in such person as the court may appoint or in default of any appointment shall revert to the debtor insolvent.
The reason why section 44 has not provided specifically for the reversion of undisposed property to the insolvent obviously is that the scheme of the Act does not contemplate where there is no annulment that any property which vested in the receiver would remain undisposed of.
It as section 74 shows the final dividend is generally declared when he receiver has realised all the property of the insolvent there would be no property left unadministered usually when an order of discharge comes to be passed.
It is however urged on behalf of the respondents 534 that there is nothing in sections 41 and 42 to suggest that a discharge can only be granted after a final dividend is declared and therefore there may be cases where administration by the receiver may still go on after discharge has been ordered.
This argument, in our opinion, is not quite correct, for cl.
(a) to section 42 (1) definitely requires the court to consider whether the assets are of a value equal to eight annas in the rupee on the amount of his unsecured liabilities, and this the Court generally speaking can only find out after all the property has been realised and final dividend has been declared.
But, as we have pointed out, it is possible to declare a final dividend and thereafter to get an order of discharge even though some property may not have been disposed of where in the opinion of the court the realisation of such property would needlessly protract the receivership.
Therefore it may be possible in some cases that all the property of the insolvent may not be disposed of before an order of discharge is made.
But in such a case the court will generally pass orders with respect to the property not disposed of when granting ' an order of discharge.
It is true that the Act does not contemplate that an insolvent might get an order of discharge and yet retain part of his property free from the liability to pay debts provable under the Act, in case all the debts have not been paid off But it is here that we have to look to the effect of section 67 of the Act.
That section lays down that the insolvent shall be entitled to any surplus remaining after payment in full of his creditors with interest as provided ' by the Act and of the expenses of the proceedings taken thereunder.
Now, often this surplus would be in the form of money.
But take a case where an insolvent has come into property by devolution after he became insolvent and before his discharge; and suppose that the property which was devolved on him is worth a few lacs while his debts are only a few thousands.
In such a case the receiver would not proceed to sell all the property; he would only sell so much of the 535 property as would satisfy the debts in full and meet the expenses of the proceedings in insolvency; the rest of the property whether movable or immovable would not be converted into money.
It seems to us that it would not be wrong in such a case to call such property whether movable or immovable which remains after payment in full to the creditors with interest and of the expenses of the proceedings in insolvency as "surplus".
To this surplus the insolvent is entitled.
In such a case therefore it would be proper to hold that if any property remains undisposed of in the shape of surplus that vests back in the insolvent, just as surplus in the shape of money would.
It is true that cases may arise where what devolves on the insolvent after the order of adjudication and before his discharge may not be easily realisable or may be a matter of dispute which may lead to litigation lasting for many years.
In such a case the receiver would be entitled to declare a final dividend if the court is of opinion that the property which has de ' volved on the insolvent is subject of protracted litigation and it cannot be realised without needlessly protracting the receivership.
Such property would also in our opinion be surplus to which the insolvent would be entitled under section 67 subject to his complying in full with the provisions of that section i.e. paying his creditors in full with interest and meeting the expenses of the proceedings taken under the Act.
A third class of cases may arise where the court may not come to know of the property which devolves on the insolvent and grants a discharge in ignorance of such devolution, may be because the insolvent did not bring it to the notice of the court.
In such a case also in principle we see no difficulty in holding that the property which vested in the receiver under section 28 (4) and which remained undisposed of by him before the discharge of the insolvent would still be surplus to which the insolvent would be entitled, though he may not be permitted to make full use of 536 it until he complies with the conditions in section 67, namely, until payment in full is made to his creditors and the expenses of the proceedings in insolvency are met by him out of the property so remaining undisposed of.
Though therefore there is no specific provision in terms in section 44 (2) with respect to property that may remain undisposed of by the receiver or by the court like the provision in section 37 on an order of annulment, it seems to us that section 67 by necessary implication provides the answer to a case like the present.
All the property which remains undisposed of at the time of discharge must be treated as surplus to which the insolvent is entitled.
The insolvent will thus get title to all such property and the vesting in the receiver whether under section 28 (2) or section 28(4) would come to an end on an order of discharge subject always to the insolvent complying in full with the conditions of section 67 in case they have not been complied with before his discharge, for he is entitled only to the surplus after the creditors have been paid in full and the expenses of all proceedings in insol vency have been met Any other view of the effect of discharge would result in this startling position that though the insolvent is freed from his debts under section 44 (2) and is a freeman for all purposes the property which was his and which vested in the receiver under section 28 (4) will never come back to him and will always remain vested either in the court or the receiver.
We have no doubt that the Act did not contemplate such a situation.
We have already indicated the reason why section 44 does not provide for revesting of property in the insolvent in contrast to the provision therefor in section 37.
Generally speaking it is not expected that there would be any property left to revest in the insolvent after the administration in insolvency is over.
We have therefore to look to section 67 which provides that the insolvent is entitled to any surplus remaining after payment in full of his creditors and after meeting the expenses of the proceedings taken under the Act; and it is that 537 section which gives title to the insolvent in the property which remains undisposed of for any reason before his discharge subject to the conditions of that section being fulfilled even after the discharge.
just as the Act does not contemplate that an insolvent would get an order of discharge and yet retain part of his property without meeting the debts provable under the Act in full, it is to our mind equally clear that the Act does not contemplate that after an insolvent has been discharged his undisposed of property, if any, should for ever remain in the possession of the court or receiver, even though in a particular case the creditors may have been paid in full out of the property disposed of ' and all the expenses of the proceedings under the Act have been met.
In such a case it seems to us that it is section 67 which must come to the aid of the insolvent and the property which remains undisposed of must be treated as surplus and he gets title to it.
Where however the insolvent has been discharged without fully meeting the conditions of section 67, he would in our opinion be still entitled to the surplus, even if it be in the shape of undisposed property, subject to his fulfilling the conditions of section 67.
It may be added that there is nothing in the Act which takes away the right of the insolvent to sue in courts after he has been granted a discharge, for he then becomes a free man.
In such a situation we are of opinion that he would certainly be entitled to sue in court for recovery of his undisposed of property, if it is in the possession of a third party, after his discharge and such property cannot for ever remain vested in the court or receiver.
All that justice requires is that in case the conditions of section 67 have not been fulfilled such property should be subject to those conditions, namely, that he should be liable to discharge his creditors in full.
with interest and to meet the expenses of all proceedings taken under the Act.
Subject to these conditions the insolvent in our opinion would be entitled to undisposed of property on discharge and would be 538 free to deal with it as any other person and, if necessary, to file a suit to recover it.
It remains now to consider some of the cases which were cited at the bar.
We have already pointed out that it is unnecessary to consider those cases which deal with the right of the insolvent to file a suit while he is still undischarged, though even on this point there seems to be difference of opinion in various High Courts as to the power of the insolvent; nor is it necessary to refer to the rule in Cohen vs Mitchel (1), which has found statutory expression in section 47 of the Bankruptcy Act, 1914, (4 & 5 Geo.5, ch. 59).
Section 47 of the English Bank ruptcy Act deals with transactions by a bankrupt with any person dealing with him bona fide and for value, in respect of property, whether real or personal, acquired by the bankrupt after the adjudication, and provides that all such transactions shall be valid if completed before intervention by the trustee (i. e. the receiver).
In England, therefore intervention by the trustee (i.e. the receiver) is required before completion of the transaction and if the trustee does not intervene the transactions arc generally speaking good.
That position of law however does not apply in India because of section 28 (4), which specifically lays down that all the property which is acquired by or devolves on an insolvent after the date of an order of adjudication and before his discharge shall forthwith vest in the court or receivers Learned counsel for the parties have not been able to cite any case which deals exactly with a case like the one before us.
We may however refer to certain observations of learned judges which may be helpful to show how the position has been understood by some High Courts with respect to surplus and also with respect to what happens to undisposed of property after a (1) , 539 discharge, though there is no discussion on the subject in the cases cited.
In Sayad Daud Sayad Mohd. vs Mulna Mohd. Sayad (1), the Bombay High Court was dealing with a case where an insolvent had filed a suit to recover property four days after he had been adjudicated insolvent '.
Later the official assignee wanted to join as a new plaintiff when he came to know of the suit; but by that time it appears that limitation had expired, and the question arose whether the suit would be said to have been filed afresh on the date the official assignee intervened.
It was held that that was so, for the insolvent could not maintain a suit after he had been adjudicated insolvent and so far as the official assignee was concerned the suit must be held to have been filed on the date he asked for intervention and would therefore be barred by time.
It will be seen that the case deals with a suit brought by an undischarged insolvent and not with a suit as in the present case brought by a discharged insolvent.
But the learned judges observed that the vesting order for the time being was paramount, even though an insolvent might eventually be entitled to what might remain as surplus after satisfying his creditors, thus showing that what remains as surplus becomes the property of the insolvent.
Yellavajjhula Surayya vs Tummalapalli Mangayya (2) is a case more directly in point.
In that case the plaintiff was declared an insolvent in 1919.
He was still an insolvent in 1929 when certain property devolved on him as reversioner.
He was granted an absolute discharge in August 1931.
No creditors had come to prove their debts or to take steps between 1919 and 1929; nor did the official receiver take any step prior to 1929 or between 1929 to 1931.
After his absolute discharge, the plaintiff instituted a suit for recovering the property.
, In that (1) (2) A.I.R. (1941) Mad.
345 540 suit, Varadachariar J. observed and, if we may say so with respect, rightly that the construction of cl.
(4) of section 28 was not free from difficulty; but went on to add that there was nothing in the policy of the Insolvency Law to suggest that it was intended to benefit strangers, and in the circumstances the plain ' tiff could maintain the suit, though the learned judge added that nothing that was said in the judge ment would prejudice the right, if any, of the official receiver or of the creditors of the plaintiff to assert such rights and remedies as they might have in law in respect of the suit properties.
It will be seen that this case was almost similar to the case before us and the court held that in such circumstances the discharged insolvent could maintain the suit, though the reasoning was only in one sentence, namely, that there was nothing in the policy of the Insolvency Law to suggest that it was intended to benefit strangers.
In Rup Narain Singh vs Har Gopal Tewari an insolvent acquired some property after the order of adjudication.
It was apparently not brought to the notice of the receiver and was mortgaged by the insolvent while he was still undischarged.
Later after his discharge the mortgagee brought a suit to enforce the mortgage.
The insolvent mortgagor had transferred part of the property to other persons who were also made parties.
These persons raised the defence that as the mortgagor was an undischarged insolvent when he executed the mortgage, it was void.
The High Court negatived this contention and relying on section 43 of the Transfer of property Act decreed the suit.
In the course of the judgment the High Court however observed that after the order of discharge was passed, the property had been divested from the receiver and revested in the insol vent, though no reason was given for this view.
In Dewan Chand vs Manak Chand (2) the facts were that a certain property devolved on an insolvent, (1) I.L.R. (1933) 55 All.
(2) A.I.R. (1934) Lab.
809 541 who made a mortgage of it, apparently without bringing it to the notice of the receiver.
After the insolvent was discharged, a suit was brought to enforce the mortgage and a question arose whether section 43 of the Transfer of property Act would apply.
In that connection the High Court observed that after the insolvent was discharged the property in question must be considered to have revested in the mortgagor on his discharge in the absence of any order to the contrary by the court.
We may now notice some cases on which reliance is placed to suggest that undisposed of property can never vest in the insolvent, even after he gets a discharge.
In Arjun Das Kundu vs Marchhiya Telinee (1), it was held that "an absolute order of discharge of an insolvent does not release any property acquired by him before such order from the liability to meet his debts provable in insolvency.
" That case, however, was only dealing with the effect of section 44 (2) of the Act and it was held that if there was any property which vested in the official receiver either under section 28 (2) or under section 28(4) and that property was not disposed of before the order of discharge, the creditors would still have a right to get their debts discharged by the sale of that property even though they might not have proved the debts at an earlier stage.
This case does not in our opinion support the proposition contended for by the respon dents.
It only lays down that the property which remains undisposed of would still be subject to the debts provable under the Act, and this is what in our opinion is the effect of section 67 where only the surplus revests in the insolvent.
The next case is Kanshi Ram vs Hari Ram (2) there the facts were that a discharge was granted on the re port of the official receiver to the effect that the insolvent 's assets had been completely disposed of.
Thereafter it was discovered that some property had (1) I.L.R. (2) A.I.R. (1937) Lah.
542 devolved on the insolvent before his discharge and was not within the knowledge of the receiver.
The High Court held that such property was liable to meet the debts which had not been paid in full before the discharge.
This case also in our opinion only lays down that any surplus in the hands of the insolvent after his discharge is liable to the debts provable under the Act if they have not been paid in full, and this is in accordance with the provisions of section 67, for the insolvent is only entitled to that property or money as surplus which remains after payment of his debts in full and after meeting all expenses of the proceedings under the Act.
The last case to which reference may be made is Parsu vs Balaji (1).
In that case also the insolvent had been discharged but his debts had not been paid in full.
It was held in those circumstances that any undisposed of property would still be liable to meet the debts provable under the Act.
This again in our opinion is in accord with section 67 where the insolvent is only entitled to that surplus which remains after his debts have been paid in full and all the expenses of the proceedings taken under the Act have been met.
Therefore, on a careful consideration of the scheme of the Act and on a review of the authorities which have been cited at the bar, we are of opinion that an insolvent is entitled to get back any undisposed of property as surplus when an absolute order of discharge is made in his favour, subject always to the condition that if any of the debts provable under the Act have not been discharged before the order of discharge, the property would remain liable to dis charge those debts and also meet the expenses of all proceedings taken under the Act till they arc fully met.
The view of the High Court that the suit is not maintainable is therefore not correct.
The order of the trial court by which it held that the suit was maintainable and provided that notice should be (1) I.L.R. 543 given to the receiver in insolvency application No. 48 of 1939 to consider if be wanted the property to be made available for distribution amongst creditors, is correct.
Now we come to the second point raised before the High Court, namely, the effect of the will of Ganpatrao.
By the first clause of the will, Ganpatrao appointed three executors.
The bequest in favour of Annapumabai was in these terms : "The entire immovable property situate at the village of Dahisar, Taluka Kalyan, consisting of lands and tenements etc.
is given to my senior wife, Annapoorna.
During her life time she shall enjoy, as owner, the income therefrom, in any manner she may like.
No one shall have (any) right, title or interest therein.
" The bequest in favour of Sarswatibai was in these terms : "The entire immovable property situate at the village of Nagaon, Taluka Kalyan, consisting of lands and tenements etc.
is given to my junior wife, Sarswati.
During her life time, she shall enjoy, as owner, only the income therefrom in any manner she may like." Then there was another clause which gave them some property jointly, which was in these terms : "The property consisting of a dwelling house and other structures and open space etc.
situate at Thana shall remain with my two wives.
Hence, they should live amicably and enjoy the same.
" The High Court has held that the estate given to Annapurnabai in the lands at village Dahisar and 544 to Sarswatibai in the lands at village Nagaon and the estate given to them, in the house at Thana was an absolute estate subject to defeasance of the estate on their deaths in case a son was adopted by Annapurnabai.
It is true that the two clauses with respect to the demise of properties in villages Dahisar and Nagaon to the two widows use the word "owner" ; but we have to read the clauses as a whole together with the surrounding circumstances then prevailing as also in contrast to the other clauses in the will to determine the intention of the testator.
Now the clause with respect to village Dahisar is that the property in Dahisar was given to Annapurnabai.
and then goes on to say that during her life time she would enjoy as owner the income there from in any manner she liked and no one else would have any right, title or interest therein Reading the clause as a whole it seems to us fairly clear that the intention of the testator was that the property given to Annapurnabai was for her life and she was entitled to enjoy the income therefrom in any manner she liked without any interference by any one.
If the testator 's intention had been to give an absolute estate to Annapurnabai, there was no reason why he should have gone on to say in that clause, "during her life time she shall enjoy as owner the income therefrom, in any manner she may like", for that would have been unnecessary in the case of a person who was given an absolute estate.
Therefore these words appearing in the second clause are clearly words of, limitation and show on the reading of the whole clause that the intention of the testator was to confer a life estate on Annapurnabai.
In the case of the property in village Nagaon, the matter is clearer still, for the testator said that Sarswatibai shall enjoy as owner, only the income during her life time.
These are clear words of limitation and show on reading the clause as a whole that the 545 intention of the testator was to confer only life estate on Sarswatibai.
As to the clause relating to the dwelling house etc.
in Thana, it is remarkable that that clause does not even use the word "given" ; it only says that the dwelling house etc. " 'shall remain with my two wives" i.e. that they will be in possession so long as they live.
The further sentence that they should live amicably and enjoy the same, makes in our opinion no difference to the intention of the testator, which is clear from the fact that he wanted these properties to remain with his two wives, i.e. he was only giving them the possession of the property for enjoyment for their lives.
In this connection it may be well to contrast the language of some other clauses in the will where the bequest was obviously of an absolute estate.
Take the bequest relating to Sirdhon village in favour of Balkrishna Waman Kharkar.
It is in these terms : "The entire immovable property situate , 'at Sirdhon village, taluka Panvel, consisting of lands and tenements etc.
is given to Chiranjiv Balkrishan Waman Kharkar.
He shall en 'JOY the same as owner.
Neither my two wives nor others whosoever shall have any right, title or interest etc.
whatever therein.
" This is a clear bequest of an absolute estate.
There is no mention of any income in this clause and also no mention of the life time of the legatee.
Obviously, therefore, where the testator was intending to bequeath an absolute estate he used entirely different language from that used in the three clauses with respect to his wives.
Contrast again the language relating to the bequest of movable property in favour of the two wives.
That clause is in these terms : " Movable property such as ornaments and trinkets and clothes and raiments etc.
which 546 may have been given to any party shall remain with the said party and my two wives shall be fully entitled thereto.
They shall deal with the same in any manner they like.
" The use of the words "fully entitled" clearly indicates the bequest of absolute estate so far as movable property is concerned ; but we find no similar words in the clauses relating to bequests of property in villages Dahisar, Nagaon and Thana.
This conclusion as to the nature of the interest bequeathed to the two wives is strengthened by another provision in the will.
Under that provision Annapurnabai was authorised to adopt a fit boy from amongst the family, on the advice of the executors.
It was also provided that the adopted son shall have no right of any kind whatever to the movable and immovable properties so long as Annapumabai remained alive.
But on her death he was to be entitled to these.
properties.
It was further provided that on the death of Sarswatibai the adopted son would become entitled to the immovable property bequeathed of her.
Now if the estate bequeathed to Annapurnabai and Sarswatibai was anabsolute estate it is difficult to see how the testator could provide that on the death of Annapurnabai and saraswatibai the properties bequeathed to them would go to the adopted son.
The holder of an absolute estate would be entitled to sell it if she so desired, and therefore there could be no provision in the will that on the deaths of Annapumabai and Sarswatibai, the property bequeathed to them would go to the adopted son.
This provision therefore read with the provisions in the three clauses relating to the bequests of properties in Dahisar; Nagaon and Thana clearly shows that the bequest of those properties in favour of the two wives was only a life estate.
We cannot therefore agree with the 547 High Court that the estate given to Annapumabai and Sarswatibai whether in Dahisar, Nagaon or Thana was an absolute estate.
In our opinion it was life estate only.
It may also be added that Ganpatrao died,, in 1894 when it was more usual to give life estate to widows and the terms in the various clauses on the will are in our opinion in consonance with the prevailing practice in those times.
In the view that we have taken it follows that the judgment of the High Court must be set aside.
However as the High Court has only considered these two questions, the case will have to be remanded so that the High Court may go into the other issues raised and decided by the trial court.
Lastly we may refer to another contention on behalf of the respondents.
It appears that Shamdas Narayandas and jaigopal Narayandas purchased property in village Dhokali Manpada in Taluka and sub division of Thana, described as lot No. 8 in the first schedule to the 'plaint.
It appears that there was one sale deed in favour of these two defendants.
Of these defendants, jaigopal_Narayandas died on April 19, 1960, after the decree of the High Court which was given on March 7, 1957, and also after the grant of the certificate by the High Court in May, 1958, and the order admitting the appeal by the High Court in April, 1959.
The record was despatched to this Court in 1962.
No application was however made to the High Court till August 13, 1962, for substitution of the heirs of jaigopal Narayandas.
When the application was made in August 1962, for substitution, the High Court dismissed it on Jannary 9. 1963, on the ground of limitation.
There was then a review application filed before the High Court, which was also dismissed on February 12, 1963.
Thereafter the petition of appeal was filed in this Court on March 13, 1963.
Then on April 3, 1963, an application was made to this 548 Court for substitution of the heirs of Jaigopal Nara a as.
The respondents contend that as the heirs of jaigopal Narayandas were not brought on the recordwithin the time allowed by law, the entire appeal abates.
We are of opinion that the interests of the various defendants who are in possession of various properties are independent and therefore the whole of the appeal cannot abate because the heirs of certain deceased defendants in possession of one property have not been brought on the record.
So far as lot.
No. 8 is concerned it was the common progerty of Shamdas Narayandas and jaigopal Narayan as, which they apparently acquired by one sale decd.
We are not prepared to condone the delay in bringing the heirs of jaigopal Narayandas on the record and therefore dismiss the application dated April 3, 1963.
The effect of this will be that the suit will abate in so far as the property in lot No. 8 is concerned.
It is not shown that the interest of the two purchasers who are presumably members of an undivided family were separate and distinct and so there cannot be partial abatement only in regard to the share of the deceased purchaser; but that cannot affect the appeal in so far as the property in other lots is concerned.
The High Court on remand will therefore go into the other issues with respect to properties in lots other than lot No. 8.
We therefore allow the appeal and remand the case to the High Court for decision on other issues so far as lots (other than lot No. 8) in the first schedule to the plaint are concerned.
So far as lot No. 8 is concerned, the appeal abates and is dismissed.
In the circumstances we pass no order as to the costs of the appeal with respect to lot No. 8, so far as the costs of the appeal with respect to other lots are concerned, the respondents will pay the costs of the appellant including advocate 's fee of this court & the Court fees also.
Appeal allowed.
Case remanded.

summary/full:
The appellant, a Hindu reversioner, brought the suit out of which the appeal arose for recovery of certain properties alienated by two widows having widow 's estates under the will of their husband.
The respondents resisted the suit mainly on the grounds that the appellant, who was an undischarged insolvent at the time the succession opened, could not maintain the suit even after his absolute discharge as the properties must be taken to have vested in the official receiver and that under the will of their husband the widows got not a widow 's estate but an absolute estate and had the right to alienate the properties which they did.
The trial court found in favour of the appellant and directed delivery of possession of the properties to him.
On appeal the High Court took the contrary view on both the points and dismissed the suit.
The appellant came up to this Court on the certificate granted by the High Court.
Held that the High Court was in error in holding that the appellant could not maintain the suit.
There is nothing in the Provincial Insolvency Act that takes away the right of the insolvent to sue in courts after he is granted a discharge for he then becomes a free man.
Though there is no specific provision in the Act with respect to the property that may remain undisposed of by the court or by the receiver, the provisions in section 67 by necessary implication read in the light of the general scheme of the Act provides an answer to this and all such property must be treated as surplus to which an insolvent is entitled, after an absolute order of discharge is made in his favour, subject always to the condition that if any debts provable under the Act have not been discharged before such order, 521 the property will remain liable for such discharge as also the expenses of all proceedings under the Act till they are fully met.
Cohen vs Mitchel, (I 890) ; Sayad Daud Sayed Mahomed vs Mulna Mahomed Sayad, (1926) 28 Bom.
L. R. 334; Yellavajjhula Suraya vs Tummalapali Mangayya, A.I.R. , Rup Narain Singh vs Har Gopal Tewari, 'I. L. R. (1933), 53 All. 503; Diwan Chand vs Manak Chand, A.I.R. (1934) Lah.
809; Arjun Das Kundu vs Marchhiya Tolinee, I.L.R. ; Kanshi Ram vs Hari Ram, A. I .R. and Parsu vs Balaji, I.L.R. (I , discussed.
In order to determine the true intention of a testator, the clauses of the will should be read as a whole in the light of the surrounding circumstances as also in contrast to the other clauses and where the testator, as in the instant case, having used the word owner ' in the previous clause, follows up by using the words "during her lifetime enjoy as owner the income in any manner she likes" the latter words clearly limit the bequest and indicate that what is given is no more than a life estate.
Where the interests of the various defendants in possession of various properties are independent, the appeal cannot abate as a whole by reason of the heirs of a deceased defendant in possession of a property not having been brought on the record within the prescribed time.


judgement:
vil Appeal No. 578 of 1961.
Appeal from the judgment and decree dated March 12, 1959.
of the Bombay High Court in First Appeal No. 685 of 1956.
966 W. section Barlingay and A. G. Ratnaparkhi, for the appellant.
B.R. Naik, M. R. Krishna Pillai and K. R. Chaudhuri, for the respondent.
May 10.
The judgment of the Court was delivered by SINHA C. J.
This appeal on a certificate granted by the High Court of Judicature at Bombay is directed against the judgment and order of a Division Bench of that Court, dated March 12,1959, reversing those of the judge of the Bombay Civil Court, passed in Chamber Summons, in Arbitration case No. A.B.N./C.H.O. 2310/88 of 1954 55.
It is necessary to state the following facts in order to bring out the points in controversy between the parties.
The Happy Home Cooperative Housing Society Ltd hereinafter referred to as the Society was registered in February 1949.
It obtained a lease of a piece of land measuring about 12 thousand sq.
yards situate at Nehru Road, Vile Parle (East) Bombay.
The Society divided this land into 17 plots to be allotted to each one of its members for building purposes.
A member was under the obligation of payment of premium, annual rent of Re. 1/ , and other incidental charges and to construct a house on the plot.
The Society advanced loans to the members to enable them to construct their houses.
The premium in respect of the land and the loan advanced, as aforesaid, together with interest, was repayable in monthly installments.
Accordingly, Plot.
No. 10, measuring about 676 sq.
was allotted to the appellant, and other plots were similarly allotted to other members for constructing their respective houses.
Through the agency of the Society, the appellant constructed a house on his plot.
The construction was completed and the appellant 967 occupied the building on or about May 1, 1951.
The sum of Rs. 26,922/ odd was advanced by way of loan, to the appellant.
An agreement dated March 26, 1952 was entered into between the appellant and the Society in respect of the loan aforesaid, and the document was duly registered on May 27, 1952.
The agreement between the appellant and the Society provided that the amount of loan aforesaid advanced to the appellant should be repaid in 366 or smaller monthly instalments and after the entire amount of the loan had been repaid, the Society would execute a sub lease in respect of Plot No. 10 in favour of the appellant.
It was further stipulated that in the event of default in the payment of an instalment, fixed in the agreement, the Society had the right to determine the agreement; and thereupon any amounts already paid would be forfeited to the Society and the member was to surrender the property and give vacant possession of the premises to the Society.
It appears that no instalment was paid by the appellant with the result that on August 26, 1954, the Society gave notice to him, calling upon him to give vacant possession of the premises, but the appellant did not comply with the notice.
In view of the persistent refusal of the appellant to comply with the terms of the agreement, the Society referred to dispute with the appellant under section 54 of the Bombay Co operative Societies Act (Bombay Act VII of 1925) which hereinafter will be referred to as the Act, to the Registrar for decision by himself or his nominee.
The said dispute was heard and decided by a Committee of Arbitrators, appointed by the Registrar, Co operative Societies, consisting of three gentlemen.
(1) a nominee of the Society as plaintiff, (2) nominee of the Appellant, as defendant, and (3) nominee of the Registrar, who was to be the Chair man.
The said Committee of Arbitration, by majority, gave an award in favour of the Society to the effect that the appellant do deliver vacan 968 possession of Plot, No. 10, alongwith the house, to the Society and pay Rs. 150/ per month as compensation for unauthorised use and occupation of the premises from October 1, 1954, to the date of the delivery of vacant possession.
The appellant was also made liable for payment of costs of the arbitration proceedings.
Thereupon the appellant made a revisional application to the Bombay Co operative Tribunal, contending that the dispute between the Society and himself was essentially a dispute between landlord and tenant regarding the possession of the premises and the recovery of rent and that the only Court that had jurisdiction to decide such a controversy was the Small Causes Court in Greater Bombay, in view of section 28 of the Bombay Rents, Hotel and Lodging House Rents Control Act (Bombay Act 57 of 1947).
After hearing the parties, the Tribunal negatived the contention raised on behalf of the appellant and dismissed the revisional application.
After the Award was certified under section 59 of the Act, the Award was filed in the Bombay City Civil Court for execution.
Thereupon the appellant took out a Chamber Summons against the Society for stay of the execution proceedings.
The learned Judge who heard the Chamber Summons held that the Award made by the Arbitrators was without jurisdiction, in view of the provisions of section 28 of the Rent Control Act.
Accordingly, the summons was made absolute on October 16, 1956.
From that order the Society came up in appeal to the High court.
The High Court, on a consideration of the terms of the agreement aforesaid, of March 26, 1952, and after elaborate arguments raised by the parties as to the legal effect of that document came to the conclusion that it was only an agreement to lease, binding the Society to grant a sub lease only after the appellant had fully paid all the instalments due, and fulfilled other conditions of the agreement, as stipulated between the parties.
In that view of the matter, the High Court held that there was no 969 relationship of landlord and tenant between the parties.
In the result, the learned judges set aside the order under appeal before them, and directed that the execution of the Award be proceeded with in accordance with law, with costs to the Society in both the Courts.
It is from this judgment and order that this appeal has been brought to this Court, on a certificate being granted by the High Court.
The main question in controversy in this case is whether the Award made under the Act, which became a decree of the Civil Court, under the certificate of the Registrar; under section 59, was without jurisdiction, and, therefore, incapable of execution.
The answer to this question depends upon the answer to the other question whether the appellant was a 'tenant ' under the Society, by virtue of the agreement aforesaid of March 26, 1952.
If it is held that the agreement aforesaid did not create the relationship of landlord and tenant, but that the appellant continued to be the debtor of the Society until all the outstanding amount advanced to him in respect of the plot and the structure bad been liquidated, the Rent Control Act, and section 28 thereof, will be out of the way of the parties.
In that case, the proceedings before the Registrar, the Award of the Arbitrators and the execution proceedings taken out by the Society would all be adjudged to be valid and binding upon the parties.
It is noteworthy that though the determination of the appeal depends upon the terms of the agreement of March 26, 1952, it has not been included in the printed paper book.
We have, therefore, to depend upon the extensive quotations of the terms of the document as contained ;In the judgment under appeal.
It is common ground that all the relevant terms of the document, beginning from the preamble to almost the end of it, have been quoted in different parts in the judgment of the High Court, 970 and that these are sufficient to give us a complete idea of the terms of the agreement.
The agreement has been described by the Society in the plaint filed before the Arbitrators as 'a lease ' and the appellant has been described as a 'tenant ', and if the case were to be decided on the so called admissions in the plaint, the conclusion could easily be arrived at that the relationship between the parties was that of landlord and tenant.
But as pointed out by the High Court, if we refer to the terms of the agreement itself, it will be abundantly clear that on a proper construction of those terms, there was no executed lease between the parties, but that it was only an executory contract entitling the appellant to a sub lease by the Society, which was itself a lessee, upon payment of all the dues of the Society in respect of premium, principal and interest, advanced towards the cost of construction of the premises and fulfillment of all other conditions contained in the agreement.
It consists of 14 clauses, as the judgment of the High Court says.
It further appears from the said judgment that the agreement starts by saying that it has been entered into between the Society of the one part, and the appellant, hereinafter called the 'tenant ' of the other part.
In Part II of the preamble it is stated that the 'tenant ' has applied to the Society for Plot No. 10 and for permission to erect a dwelling house thereon and for a loan from the Society.
The preamble also mentions the fact that the Society itself had taken a lease of the entire open piece of land, of which plot No. 10 was a part, for a term of 999 years from March 17, 1950, at the annual rent of Rs. 6,264/ .
Part III of the preamble proceeds to say that the Society has already spent money on development of the land and laying out roads, etc., and that it had been agreed between the Society and the 'tenant ' that the letter will pay a sum of Rs. 10,020/ in instalments for transfer of Plot No. 10, and that the society shall grant a loan to the 'tenant ', not exceeding Rs. 16,980/ for erecting 971 the structure on that plot, to be advanced in instalments and repayable in instalments, as hereinafter provided.
Part V of the preamble is important in so far as it has stated, in clear terms, that whenever the 'tenant ' shall have repaid to the Society all the outstanding dues, either in equated monthly instalments or in one lumpsum, at the option of the "tenant ', the Society, with the consent of the Government as mortgagee, shall grant to the 'tenant ', a sublease of the said Plot No. 10.
free from all encumbrances for a term of 998 years commencing from Match 17, 1950.
Then follow the clauses of the agreement.
The first clause grants permission to the 'tenant ' to enter upon the said plot for erecting a dwelling house in accordance with the plan, elevation and estimates, previously approved in writing by the Society.
Then clause 3 follows, which is substantially in the same terms as Part V of the preamble.
It makes it absolutely clear that only upon payment of all the outstanding dues of the Society, in respect of premium for the plot and advance made for building the residential house, alongwith interest accrued thereon, the Society shall grant and the "tenant ' shall accept a sub lease of the said Plot No. 10.
It maybe mentioned here that the mortgage in favour of the Government has reference to the advance by the Government of a large sum of money to the Society with a view to financing its building activities.
For securing the payment of that lumpsum, the entire area of land was mortga ged to the Government.
Hence, it was necessary to obtain the previous consent of the Government as mortgagee to the execution of the sub lease, contemplated by Part V of the preamble and clause 3 of the agreement.
And then follow details of how the installments have to be paid.
Clause 8 of the agreement provides that the proposed sub lease shall be in the form now approved and signed by and on behalf of the parties, and when the said principal money and interest have been fully paid, the necessary 972 document shall be executed by the Society.
Further, clause 9 of the agreement provides that as from the date of the agreement, the 'tenant ' shall punctually and regularly pay to the Society, without any deductions, firstly, a rent of one rupee per annum, if demanded, secondly a proportionate amount of rent payable to the superior landlord in respect of Plot No. 10, thirdly a proportionate amount of assessment rates and taxes paid by the Society in respect of Plot No. 10, fourthly, a sum equal to the amount spent by the Society for insuring the building with reference to Plot No. 10, and., lastly, such further sum as may from time to time be certified by the Society as the contribution by the occupier of Plot No. 10 towards the general expenses of management, maintenance and development costs, including expenses incurred on roads, sewers, drains and other amenities.
Clause 10 provides for the penalty in the event of a default made by the 'tenant ' in respect of any sums payable as aforesaid.
It says that in the event of a default by the "tenant ' the Society shall be entitled to serve notice in writing determining the agreement and thereupon all installments and other moneys paid by the "tenant ' under the agreement shall be forfeited to the Society and shall become the absolute property of the Society.
And what follows is most important.
it says that upon the determination of the agreement, the 'tenant ' shall forthwith surrender and give to the Society vacant possession of the said premises.
Clause 11 makes reference to the fact that premises were mortgaged to the Governor of Bombay to secure the loan advanced to the Society by the Government of Bombay, and so long as the mortgage remains subsisting, the Governor of Bombay shall be a necessary party to any such sublease, to be hereinafter executed as aforesaid,, and no such sub lease shall be valid unless and until the same shall be executed by the Registrar of Cooperative Societies on behalf of the Governor of 973 Bombay.
And lastly, clause 12 says that the "tenant ' shall accept the title of the Society to grant the said sub lease without any questions or making any requisitions or objections with regard to the title.
It was argued in the High Court though not in the Trial Court, that on the terms aforesaid of the agreement, a present demise of the land had been executed in favour of the appellant.
This argument was thought of in the High Court.
In the lower Court, the Appellant 's counsel relied on section 27 A of the Specific Relief Act, and it was submitted that the defendant was entitled to defend his possession even though no lease had been executed and registered, as required by law.
The argument that the appellant had become the 'tenant ' of the land in question under the Society was thought of because, in the agreement, he was referred to as the 'tenant '.
In our opinion, the High Court is entirely correct in taking the view that was a mere description, or misdescription, of the appellant and that, in law, the appellant could not claim that relationship of landlord and tenant had been created by virtue of the agreement, the terms of which have been referred to in some detail in order to bring out the weakness of the argument based upon the description of the appellant as 'tenant '.
It is well settled that the real nature of a transaction has to be determined on a proper construction of the document as a whole and not upon any particular words used in the document.
The agreement construed as a whole leaves no manner of doubt that it was an agreement between the appellant and the Society to grant a sub lease of Plot No. 10 only after the appellant had fulfilled his part of the agreement, namely, had paid all the outstanding amounts due to the Society in respect of the premium on the plot, the amounts advanced for 974 construction of the house and the interest accrued due until the entire amount had been liquidated.
The sub lease would have to be executed by the Registrar of the Co operative Societies in token of the consent of the Government of Bombay, which was a condition precedent to the validity of the sub lease.
The agreement in question, therefore, evidences nothing more than an executory contract that on the appellant fulfilling his obligations to the Society, including the payment of the entire dues aforesaid, the Society would execute the sub lease in his favour subject to the consent of Government of Bombay, who held the first mortgage on the entire land, including Plot No. 10.
It would thus appear that the entire transaction was that practically a permanent lease had been taken by the Society in respect of the open area, which was sub divided into a number of plots for building purposes.
Those plots were to be allotted to the members of the Society in order to enable them to erect their own residential houses, on the terms that the Society would grant to the members such amounts by way of loan as would cover the premium on the plot allotted to them and further sum for building a house at a certain rate of interest.
On the completion of the house, the members would occupy the premises and start paying in monthly instalments the dues of the Society towards principal and interest until the last instalment will have been paid and all the outstanding dues of the Society liquidated.
Upon the happening of that event, the Society undertook to execute in favour of the members sub leases in respect of their respective plots on which they had built their residential houses.
As the whole scheme of the Society was financed by the Government of Bombay, the Government was naturally a necessary party to the transaction.
In the first instance, the whole plot was mortgaged to the Government and that mortgage was to subsist until the Government dues had been entirely liquidated.
Therefore, it became necessary that the Registrar, as the agent of the Government, should be a necessary party to the execution of the sub leases in favour of the members to whom the several plots had been allotted and the houses built on advance made by the Society out of the funds made available to it by the Government.
It has not been contested on behalf of the appellant that he did not pay any instalment in respect of the transaction in his favour.
He had, therefore, not qualified for being granted a lease of Plot No. 10, which had been allotted to him, under the building scheme of the Society.
Upon his de fault there was no option left to the Society but to determine the agreement and to call upon him to surrender vacant possession of the property.
Hence, though he was characterised as a 'tenant ' under the agreement, it really meant the 'proposed tenant '.
It was merely descriptive of the appellant for the sake of convenience of expression.
He would have become a tenant only if he had paid all the dues, as aforesaid.
, of the Society and had taken a sub lease duly executed and registered in accordance with the terms of the agreement, referred to above in detail.
As he failed to do that, the laws laid down in the Act, in order to realise the dues of the Society, had to be put into operation.
The Award was, therefore, a perfectly valid Award and there was absolutely no justification for the plea taken by the appellant that he was a tenant who was governed by the provisions of the Rent Control Act (Bombay Act 57 of 1947).
But the appellant contended that whatever view we may take of the relation created by the document, by virtue of section 28 of Bombay Act 57 of 1947 the Committee of arbitrators appointed under the Bombay Cooperative Societies Act 7 of 1925 had no jurisdiction to adjudicate upon the question 976 whether the appellant was a tenant of the premises of the society, and reliance in that behalf was placed upon the judgment of this Court in Babulal Bhuramal vs Nandram Shivram (1).
In considering that argument attention must first be invited to Section 28 of Bombay Act 57 of 1947, which in so far as it is material, provides : "(1) Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction, (a) in Greater Bombay, the Court of Small Causes, Bombay; (aa) x x x x (b) x x x x shall have jurisdiction to entertain and try any suit or proceeding between a landlord, and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this Part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions and subject to the provisions of sub section (2), no other court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question.
" It was urged that as before the Committee of arbitrators the Society had claimed that the appellant was a tenant of the Society, and relief for possession of the premises was claimed on that footing ', the arbitrators had no jurisdiction to grant relief for possession.
But there is no warrant for the submission that the Society claimed before the arbitrators that (1) A.I.R. (1959) S.C. 677. 977 the appellant was a tenant and on that basis claimed relief for possession.
The pleadings before the arbitrators are not included in the record, and on a reasonable reading of the award also no such inference can be raised.
Before the Committee of arbitrators the Society had alleged that the appellant had made persistent defaults in repayment of the loan due by him and had claimed a declaration that the appellant had ceased to be a member of the Society, and an Order for delivery of vacant possession of the premises belonging to the Society.
It was, it appears, not alleged that any relation of landlord and tenant had ever subsisted between the Society and the appellant, and the plea of the appellant that he was a tenant in respect of the premises in dispute could not affect the jurisdiction of the committee of arbitrators.
No useful purpose will therefore be served by entering upon a discussion whether the provisions of section 28 of Bombay Act 57 of 1947 override the provisions of the Bombay Co operative Societies Act 7 of 1925, as was suggested at the Bar.
Alternatively, it was contended that even if the Society claimed to obtain an order for possession on some footing other than the relationship of landlord and tenant, when the appellant raised the contention that he was a tenant and the relationship of landlord and tenant was put into issue, the Court of Small Causes, Bombay, alone was competent to decide that question.
Section 298 of Bombay Act 57 of 1947 excludes the jurisdiction of all courts other than the Court of Small Causes to try any suit, proceeding or application between a landlord and a tenant and to deal with any claims 'or questions as are referred to in the section.
Even if it be granted that an arbitrator appointed under the Bombay Co oprative Societies Act is a Court, on this question we do not deem it necessary to express any opinionin order that his jurisdiction be excluded the proceeding before him must be between landlord and 978 tenant, and relating to the recovery of rent or possession of any premises to which the provisions of Part II of the Act apply.
The exclusive jurisdiction of the Court of Small Causes arises only if the person invoking the jurisdiction of the Court alleges that the other party is a tenant or a landlord and the question is one which is referred to in section 28.
Where the person so invoking does not set up the claim that the other party is a tenant or a landlord the defendant is not entitled to displace the jurisdiction of the ordinary court by an allegation that be stands in that relation qua the other and on that ground the Court has no jurisdiction to try the suit or proceeding or an application.
There is nothing in the judgment of this Court in Babulal Bhuramal 'a Case (1), which supports the view that by merely setting up a Plea that he is a tenant in respect of the premises in dispute, the jurisdiction of the ordinary Courts to decide a suit, proceeding or application would be displaced.
The facts which gave rise to the appeal decided by this Court in Babulal 's case (1), may be noticed.
The landlord filed in the Court of Small Causes a suit in ejectment against the tenant, after terminating the tenancy, and to that suit impleaded two persons who the landlord alleged had no right to be on the premises.
The Court held that those two persons were not lawful sub tenants and had no right to remain in the premises and passed a decree in ejectment against the three defendants.
The three defen dants then commenced an action in the Bombay City Court for a declaration that the first of them was a tenant of the landlord, and the other two were lawful sub tenants and were entitled to the protection of Bombay Act 57 of 1947.
The City Court held that it had jurisdiction to try the suit, but dismissed it on the merits.
The High Court of Bombay confirmed the decree holding that the City Court had no jurisdiction to entertain the suit, but expressed no opinion on the merits.
This Court affirmed the view of the High Court.
The Court in that case was considering (1) A.1,R. 979 the true effect of section 28 of Bombay Act 57 of 1947 in the light of the averments made by the plaintiffs who alleged that they were tenants and the denial by the defendant landlord of the tenancy set up.
The Court observed on p. 681 : "The suit did not cease to be a suit between a landlord and a tenant merely because the de fendants denied the claim of the plaintiffs.
Whether the plaintiffs were the tenants would be a claim or question arising out of the Act or any of its provisions which had to be dealt with by the Court trying the suit.
On a pro per interpretation of the provisions of section 28 one suit contemplated in that section is not only a suit between a landlord and a tenant in which that relationship is admitted but also a suit in which it is claimed that the relationship of a landlord and a tenant within the meaning Of the Act subsists between the parties.
" There is nothing in these observations to support the plea that the jurisdiction of the ordinary courts to try a suit or proceeding relating to recovery of possession of any premises to which Part 11 of the Act applies is displaced as, soon as the contesting party raises a plea about the relationship of a landlord and a tenant.
In the result the appeal fails and is hereby dismissed with costs.
Appeal dismissed.

summary/full:
The respondent obtained a lease of land to be allotted to its members for building purposes and advanced loans for construction.
The premium in respect of the land and the loan advanced, together with interest, were repayable in monthly installments.
Through the agency of the society, the appellant completed the construction and occupied the building.
An agreement between the appellant and the society was duly registered which provided that the loan advanced to the appellant should be paid in 366 or smaller monthly installments, and after the entire amount of the loan had been repaid, the society would execute a sub lease in respect of the plot in favour of the appellant.
In the event of default in the payment of an installment, fixed in the agreement, the society hand the right to determine the agreement, and thereupon any amount already paid would be forfeited to the society, and the member was to surrender the property and give vacant possession of the premises to the society.
In view of the default in payment and persistent refusal of the appellant to comply with the terms of the agreement the society referred the dispute to the Registrar, Co operative Societies, for decision by himself or his nominee.
The Committee of Arbitrators, appointed by the Registrar, gave an award in favour of the society asking the appellant to deliver vacant possession of the plot and the house to the society and to pay compensation for unauthorised use and occupation of the premises and to pay costs of the arbitration proceedings.
Against the aforesaid order, the appellant 's revisional application was also dismissed by the Tribunal.
The 965 award was certified and filed in the Bombay City Civil Court for execution.
The appellant, thereupon, took out chamber summons for stay of the execution proceedings on the ground that the Award made by the Arbitrators was without jurisdic tion for the reason that under the agreement between the society and the appellant a relationship of landlord and tenant was created and that under the Bombay Rent Control Act 57/47 the Court of Small Causes was vested with exclusive jurisdiction to decide claim for recovery of rent or possession.
The learned judge made the summons absolute.
On appeal by the society, the High Court set aside the order and directed the execution of the Award to proceed.
On appeal by certificate this Court.
Held, (i) on a proper construction of the agreement as a whole, it was an executory contract and on the appellant fulfilling his obligations to the society, including the payment of the entire dues, the society would execute the sub lease in his favour subject to the consent of the Government who held the first mortgage on the entire land.
Until the sub lease was executed no relationship of landlord and tenant subsisted between the parties.
As the appellant failed to fulfill his part of the agreement, the law laid down in the Act, in order to realise the dues of the society, had to be put into operation.
The Award was, therefore, a valid Award and there was absolutely no justification for the plea that the appellant was a tenant governed by the provisions of the Rent Control Act.
(ii) in order that the jurisdiction of an arbitrator, appointed under the Bombay Co operative Societies Act, be excluded, the proceedings before him must be between landlord and tenant, and relate to the recovery of rent or possession of any premises to which the provisions of Part II of the Act applied.
The exclusion of the jurisdiction of courts other than those named in section 28 of the Bombay Act 1947 arose only if the claim of the applicant or plaintiff was based on the allegation that between him and the respondent or the defendant there was a relationship of landlord and tenant and the relief sought was one that we s referred to in that section.
Babulal Bhuramal vs Nandram Shivram A.I.R. 1958 section C. 677, held inapplicable.