{"id":167570,"date":"1995-12-14T00:00:00","date_gmt":"1995-12-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/raj-kumar-anr-vs-official-receiver-of-the-estate-on-14-december-1995"},"modified":"2015-05-09T03:34:22","modified_gmt":"2015-05-08T22:04:22","slug":"raj-kumar-anr-vs-official-receiver-of-the-estate-on-14-december-1995","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/raj-kumar-anr-vs-official-receiver-of-the-estate-on-14-december-1995","title":{"rendered":"Raj Kumar &amp; Anr vs Official Receiver Of The Estate &#8230; on 14 December, 1995"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Raj Kumar &amp; Anr vs Official Receiver Of The Estate &#8230; on 14 December, 1995<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1996 AIR  941, \t\t  1996 SCC  (2) 288<\/div>\n<div class=\"doc_author\">Author: K Ramaswamy<\/div>\n<div class=\"doc_bench\">Bench: Ramaswamy, K.<\/div>\n<pre>           PETITIONER:\nRAJ KUMAR &amp; ANR.\n\n\tVs.\n\nRESPONDENT:\nOFFICIAL RECEIVER OF THE ESTATE OFM\/S. CHIRANJI LAL RAM CHAN\n\nDATE OF JUDGMENT14\/12\/1995\n\nBENCH:\nRAMASWAMY, K.\nBENCH:\nRAMASWAMY, K.\nHANSARIA B.L. (J)\n\nCITATION:\n 1996 AIR  941\t\t  1996 SCC  (2) 288\n JT 1995 (9)   558\t  1996 SCALE  (1)64\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>\t\t\t O R D E R<br \/>\n     The only  question in  this appeal\t is whether Chiranji<br \/>\nLal, declared  insolvent, had  1\/3rd share  in the  property<br \/>\nitems 1\t and 3\twhich was the subject matter before the High<br \/>\nCourt.\n<\/p>\n<p>     This appeal by special leave arises from the order in<br \/>\nSecond\tAppeal\t No.4\/75  dated\t  February  15,\t  1980.\t The<br \/>\nInsolvency Court  initially declared  all the three partners<br \/>\nand the partnership firm by name Chiranji Lal Nihal Chand as<br \/>\ninsolvents. On appeal filed by Nihal Chand and Sarwan Kumar,<br \/>\nthe District Court, by order dated August 29, 1955, declared<br \/>\nthem to\t be not\t insolvents and\t set aside  the order of the<br \/>\nInsolvent Court.  The revision\tfiled in  the High Court was<br \/>\ndismissed on September 29, 1959. Thus as far as Chiranji Lal<br \/>\nis concerned, the order declaring him to be insolvent became<br \/>\nfinal.\n<\/p>\n<p>     The Official  Receiver, after  taking over\t the estate,<br \/>\nfiled an  application under  Section  4\t of  the  Provincial<br \/>\nInsolvency Act on August 16, 1966 for a declaration that the<br \/>\ninsolvent had  1\/3rd share  in items mentioned in paras 4, 6<br \/>\nand 7;\tand 2\/3rd  share in property listed in para 5 of the<br \/>\npetition. The  Insolvency Court\t declared that\the  had\t got<br \/>\n1\/3rd share  in some  properties and  2\/3rd  share  in\tsome<br \/>\nother; but  on\tappeal\tthe  District  Court  declared\tthat<br \/>\nChiranji Lal had 1\/3rd share in Item No.317, 326 in Division<br \/>\nNumber 3 in Ludhiana and 1000 sq. yds. in Civil Lines, which<br \/>\nthe High  Court identified  as item  number 1 and 3 and held<br \/>\nthat Chiranji Lal had 1\/3rd share in those properties. Thus,<br \/>\nthis appeal by special leave.\n<\/p>\n<p>     Shri E.C.\tAgarwal, learned counsel for the appellants,<br \/>\nwho are\t sons of  Nihal Chand,\tcontended that\tthe  alleged<br \/>\nadmissions relied  on by  the High  Court are  not  correct.<br \/>\nThere is  no such admission which was subsequently explained<br \/>\nin the evidence and the High Court had not bestowed due care<br \/>\nin scrutinising\t the evidence.\tHe has\tcontended  that\t the<br \/>\npetition itself is barred by limitation under Article 120 of<br \/>\nSchedule III to the Limitation Act, 1908 which is equivalent<br \/>\nto Article  113 of the Schedule to the Limitation Act, 1963,<br \/>\nwhich  mentions\t  limitations  of  six\tyears;\tbut  as\t the<br \/>\napplication was\t filed after  11  years,  it  is  barred  by<br \/>\nlimitation.\n<\/p>\n<p>     The first question is whether the application is barred<br \/>\nby limitation. It is seen that declaration of insolvency was<br \/>\nmade on\t February 22,  1955, when  the estate was taken into<br \/>\ncustody by  the\t Official  Receiver  after  the\t proceedings<br \/>\nbecame final.  He sought  a declaration\t as to which part of<br \/>\nthe  property,\t the  insolvent\t had  in  several  items  of<br \/>\nproperties. He\trightly had  taken that\t step since  it\t was<br \/>\ndifficult for  him to decide as to in which part and to what<br \/>\nextent, he  was insolvent in joint properties. The insolvent<br \/>\nChiranji Lal  claimed to  have 1\/3rd  or 2\/3rd share, as the<br \/>\ncase may  be. The  limitation, therefore, would begin to run<br \/>\nwhen the  appellants sought  to create cloud over that right<br \/>\nsetting up  their entitlement  or title to these properties.<br \/>\nIt was\tdone after  the application under Section 4 was made<br \/>\nby  the\t Official  Receiver.  The  High\t Court\thas  rightly<br \/>\nconcluded that\tthe cause  of action, viz., the right to sue<br \/>\nin the\tpresent case  had accrued  to the  Official Receiver<br \/>\nwhen some  cloud was  cast on  the  title  of  the  Official<br \/>\nReceiver claiming  1\/3rd share of the insolvent. Under these<br \/>\ncircumstances, the  learned Judge  of the High Court rightly<br \/>\nconcluded that\t&#8220;I do  not find any force in this contention<br \/>\nof the\tlearned counsel\t for the  respondent&#8221;. Consequently,<br \/>\nthe suit  regarding the property in item No.1 and 3 was held<br \/>\nto be  within time.  We agree with the learned Judge in this<br \/>\nconclusion. The\t creditors&#8217; stand  was\tthat  it  was  joint<br \/>\nproperty of  the three\tpartners and of the partnership firm<br \/>\nwhich was  sought to  be  declared  as\tinsolvents.  In\t the<br \/>\nproceedings for\t declaration of insolvency, the firm as well<br \/>\nas the\tappellants father  and Chiranji Lal and another were<br \/>\ndeclared to be not insolvent. Since Chiranji Lal allowed the<br \/>\ndeclaration to\tbecome final  and the  property was  jointly<br \/>\nproperty held  by all  of them,\t it would  be  difficult  to<br \/>\ndecide\tas  to\twhat  extent  and  in  which  property,\t the<br \/>\ninsolvent had  interest or  title to  the property. When the<br \/>\nappellants claimed  exclusive title to these properties, the<br \/>\ncloud on  the title  of the Official Receiver, who had taken<br \/>\nover the  estate, was  cast.  Consequently,  the  limitation<br \/>\nbegan to  run when  the cloud was cast. Admittedly, that was<br \/>\ndone when  the application  came  to  be  filed.  Thus,\t the<br \/>\napplication was within limitation.\n<\/p>\n<p>     The question  then is whether in items 1 and 3 as noted<br \/>\nby the\tHigh Court,  the  insolvent  had  1\/3rd\t share.\t The<br \/>\nquestion was  considered in  extension and  it was held that<br \/>\nthe insolvent  had 1\/3rd  share in  item 1  and 3.  The High<br \/>\nCourt noted in the order the admissions thus:\n<\/p>\n<blockquote><p>     &#8220;Wherein admissions  regarding  property<br \/>\n     at Item  No.1 have\t been  made,  by  the<br \/>\n     respondent Nihal  Chand, such  as AW 1\/4<br \/>\n     evidence given  by\t Nihal\tChand:AW  5\/7<br \/>\n     written statement\tof Nihal  Chand dated<br \/>\n     26.8.57, AW 2\/3 dated 8th October, 1965,<br \/>\n     an application  filed on behalf of Nihal<br \/>\n     Chand  claiming   1\/3rd  share  in\t this<br \/>\n     property;\tAS   5\/6  application\tdated<br \/>\n     29.7.54  by  Nihal\t Chand,\t AW  4\/1  the<br \/>\n     desolation deed,  AW 6\/2  the copy\t from<br \/>\n     the  entries  of  the  register  of  the<br \/>\n     property-tax for the years 1956 to 1961;<br \/>\n     AW 6\/3 for the years 1960 to 1965;AW 6\/9<br \/>\n     for the years 1965 to 1970, in which the<br \/>\n     share of Chiranji Lal insolvent has been<br \/>\n     shown as  1\/3rd. All  this evidence  has<br \/>\n     been relied  upon by the trial Court and<br \/>\n     the  lower\t  appellate  Court  has\t also<br \/>\n     observed,\tthat  &#8220;from  the  perusal  of<br \/>\n     these  documents,\t it  is\t well  likely<br \/>\n     clear, that  these\t documents  are\t only<br \/>\n     admissions\t of  either  Nihal  Chand  or<br \/>\n     Chiranji Lal, insolvent. The admissions,<br \/>\n     no doubt have got some evidentiary value<br \/>\n     and they  are presumed to be true unless<br \/>\n     they are  proved to be false and wrong&#8221;.<br \/>\n     But, subsequently, all this evidence has<br \/>\n     been brushed  aside on  the ground\t that<br \/>\n     the same  is contrary  to the sale-deeds<br \/>\n     and the revenue record and hence has not<br \/>\n     much evidentiary value.\n<\/p><\/blockquote>\n<blockquote><p>     it was  conceded  that  there  are\t five<br \/>\n     sale-deeds\t regarding  the\t property  at<br \/>\n     Item No.1.\t Out of\t these,\t three\tsale-<br \/>\n     deeds, i.e. Ex. OC dated 2nd June, 1938,<br \/>\n     Ex. OL dated 17th April, 1940 and Ex.OM,<br \/>\n     dated 2nd\tJune, 1935  are in  favour of<br \/>\n     all   the\t three\t brother,   including<br \/>\n     Chiranji Lal, insolvent, and hence 1\/3rd<br \/>\n     share in  the  property,  which  is  the<br \/>\n     subject matter of these sale-deeds, does<br \/>\n     not vest in the Official Receiver.<br \/>\n     Once the admission is proved, the burden<br \/>\n     is\t shifted  on  the  maker  thereof  to<br \/>\n     explain the  circumstances\t under\twhich<br \/>\n     the same  was made. What a party himself<br \/>\n     admits to\tbe  true  may  reasonably  be<br \/>\n     presumed  to   be\tso   and  until\t  the<br \/>\n     presumption  was\trebutted   the\t fact<br \/>\n     admitted\tmust\tbe   taken    to   be<br \/>\n     established. In  the present case, Nihal<br \/>\n     Chand, respondent,\t who appeared  in the<br \/>\n     witness-box, tried\t to explain  the said<br \/>\n     admissions by  saying that\t in order  to<br \/>\n     help him,\ti.e. the  insolvent, Chiranji<br \/>\n     Lal, he  allowed him to have 1\/3rd share<br \/>\n     of the  rent of  this property.  Various<br \/>\n     admissions\t made\tin  this   case\t  are<br \/>\n     unambiguous  and\tunequivocal.  In  the<br \/>\n     written reply  Ex.AW 5\/7, filed by Nihal<br \/>\n     Chand in  these proceedings, it has been<br \/>\n     clearly admitted  that the insolvent has<br \/>\n     1\/3rd share in the property. Under these<br \/>\n     circumstances, the\t burden of  proof  on<br \/>\n     the Official  Receiver, if any, is fully<br \/>\n     discharged. Mere absence of entry in the<br \/>\n     revenue record  in favour\tof persons in<br \/>\n     pursuance of  the\tsale-deeds  in\ttheir<br \/>\n     favour is\thardly\tof  any\t consequence.<br \/>\n     Consequently, the\tfindings of the lower<br \/>\n     appellate Court  on this  point  is  set<br \/>\n     aside and\tthat of\t the trial  Court  is<br \/>\n     restored  and   it\t is   held  that  the<br \/>\n     Official Receiver has 1\/3rd share in the<br \/>\n     property at item No.1.&#8221;<\/p><\/blockquote>\n<p>     These considerations  with equal  force apply  to\titem<br \/>\nNo.3.\n<\/p>\n<p>     In view  of the discussion of various items by the High<br \/>\nCourt and  the conclusion  reached on  the basis thereof, we<br \/>\nentirely agree\twith the High Court that the admissions bind<br \/>\nthe appellants.\t Therefore, it\tis clearly  established from<br \/>\nthe admission  that the\t insolvent Chiranji  Lal  had  1\/3rd<br \/>\nshare in  these properties.  Consequently, they stood vested<br \/>\nin the\tOfficial Receiver  and he  is  entitled\t to  proceed<br \/>\nfurther in  realising  the  amounts  to\t distribute  to\t the<br \/>\ncreditors.\n<\/p>\n<p>     The  appeal   is  accordingly  dismissed  but,  in\t the<br \/>\ncircumstances, without costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Raj Kumar &amp; Anr vs Official Receiver Of The Estate &#8230; on 14 December, 1995 Equivalent citations: 1996 AIR 941, 1996 SCC (2) 288 Author: K Ramaswamy Bench: Ramaswamy, K. PETITIONER: RAJ KUMAR &amp; ANR. Vs. RESPONDENT: OFFICIAL RECEIVER OF THE ESTATE OFM\/S. CHIRANJI LAL RAM CHAN DATE OF JUDGMENT14\/12\/1995 BENCH: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-167570","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Raj Kumar &amp; Anr vs Official Receiver Of The Estate ... on 14 December, 1995 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/raj-kumar-anr-vs-official-receiver-of-the-estate-on-14-december-1995\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Raj Kumar &amp; 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