{"id":266968,"date":"1967-04-03T00:00:00","date_gmt":"1967-04-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/hans-raj-vs-rattan-chand-etc-on-3-april-1967"},"modified":"2016-07-17T07:59:19","modified_gmt":"2016-07-17T02:29:19","slug":"hans-raj-vs-rattan-chand-etc-on-3-april-1967","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/hans-raj-vs-rattan-chand-etc-on-3-april-1967","title":{"rendered":"Hans Raj vs Rattan Chand, Etc on 3 April, 1967"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Hans Raj vs Rattan Chand, Etc on 3 April, 1967<\/div>\n
Equivalent citations: 1967 AIR 1780, 1967 SCR (3) 365<\/div>\n
Author: G Mitter<\/div>\n
Bench: Mitter, G.K.<\/div>\n
           PETITIONER:\nHANS RAJ\n\n\tVs.\n\nRESPONDENT:\nRATTAN CHAND, ETC.\n\nDATE OF JUDGMENT:\n03\/04\/1967\n\nBENCH:\nMITTER, G.K.\nBENCH:\nMITTER, G.K.\nWANCHOO, K.N.\nBHARGAVA, VISHISHTHA\n\nCITATION:\n 1967 AIR 1780\t\t  1967 SCR  (3) 365\n CITATOR INFO :\n RF\t    1979 SC 993\t (4)\n F\t    1989 SC1179\t (17)\n D\t    1991 SC1581\t (8)\n\n\nACT:\nProvincial Insolvency Act (Punjab Act<\/a> 5 of 1920) ss. 4<\/a> & 68-<\/a>\napplication against act of receiver alleging property, taken\nover by him not of insolvent-whether an application under s.\n4<\/a> or s. 68-Whether Iimiation of 21 days it s. 68<\/a> applies.\n\n\n\nHEADNOTE:\nThe  appellant's  brother was adjudicated insolvent  by\t the\nInsolvency  Judge,  Barnala, Punjab on the  23rd  November.,\n1954.\tTwo  days  later  it  Receiver\tin  insolvency\t was\nappointed  by the Court and was directed to take  possession\nof  the\t property  of the insolvent On\tthe  26th  and\t27th\nNovember,  1954\t the  receive  took  possession\t of  various\nproperties  and\t on the 21st December, 1954,  the  appellant\nfiled  an  objection application alleging that some  of\t the\nproperty  belonged  to\thim  and  was  exclusively  in\t his\npossession.   He  therefore  prayed  for  its  release\t and\nrestoration  to\t him.\tThe  insolvency\t Judge\t-rejected  a\ncontention that the application was time-barred under s.  68<\/a>\nof the Act but held that the property did not belong to\t the\nappellant.   After first and second appeals to the  District\nJudge,\tand  a single Bench of the High\t Court,\t a  division\nBench allowed a Letters Patent Appeal on the ground that the\nappellant's  application  was.\tincompetent  as\t barred\t  by\nlimitation.\nIn  appeal to this Court the question for determination\t was\nwhether\t the appellant's application was one under s. 68<\/a>  of\nthe Provincial Insolvency Act, and as such having been\tmade\nbeyond\tthe period of 21 days  from the date of the  act  of\nthe  receiver complained of, was covered by the\t proviso  to\nthat  section.\tIt was contended on behalf of the  appellant\nthat the application was one under s. 4<\/a> of the Act in  which\nthere is no mention of any period of limitation.\nHELD  :\t The  application  was\tone  under  s.\t68<\/a>  and\t was\nincompetent  on the ground of limitation after the lapse  of\n21 days from November 25, 1954.\nA  person complaining of the act of the receiver may  either\napply  under  68 or proceed under the ordinary\tlaw  of\t the\nland.\tSection\t 4<\/a> does not prescribe  any  application\t for\nrelief\tunder that section.  Its object is to,.\t define\t the\nlimit,%\t of jurisdiction of the courts exercising powers  in\ninsolvency.   A question as to whether an insolvent has\t any\ninterest in the property attached by the receiver would fall\nwithin\tthe  purview of s. 4<\/a>, but the  application  for\t the\nadjudication  of  such\ta question when\t the  receiver\tacts\notherwise  than under the order of a court would be  covered\nby s. 68<\/a> and as such the period of limitation of  twenty-one\ndays would be attracted to any such application.  Sub-s. (1)\nand  sub-s. (2) of s. 4<\/a> both start with the phrase  \"subject\nto the provisions of this Act\" and even if it. was  possible\nto construe that s. 4<\/a> envisaged the making of an application\nfor  relief, such application would be subject to s.  68<\/a>  of\nthe Act. [370F; 372E-G]\nDaulat\tRam v. Bansla A.I.R. 1937 Lahore page 2,  approved-,\nVenkatarama   v.  Angathayammal<\/a>\t A.I.R.\t 1933  Madras\t471,\nHeerabai   v.  Official\t Receiver<\/a>  A.I.R.  1963\t A.P.\t296;\ndisapproved.\nVellayappa Chettiar v. Ramanathan Chettiar I.L.R<\/a>. 47  Madras\n446, G.\t  N. Godbole v. Mr. Nani Bai A.I.R. 1938 Nagpur 546,\nMuthupalaniappa\n366\nv.   Raman  Chettiar  A.I.R.  1941 Madras  75;\tMul  Raj  v.\nOfficial  Receiver<\/a> A.I.R 1937 Lahore 297, Ganda Ram v.\tShiv\nNand  Ganesh Das A.I.R. 1937 Lahore 757; and Ma, Sein Nu  v.\nU. Mg.\tMg.  A.I.R. 1934 Rangoon 97; Bhairo Prasad v. S.  P.\nC.  Dass<\/a>, A.I.R. 1919 Allahabad 274, Hussain,'\tv.  Muhammad\nZamir  Abdi  A.I.R. 1924 Oudh. 294 and Mul Chand  v.  Murari\nLal, I.L.R<\/a>. 36 Allahabad 8; referred to\nNathu\tRam   v.   Madan  Gopal<\/a>,   A.I.R.   Allahabad\t408;\ndistinguished.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : CIVIL APPEAL No. 1000
\nof 1, 964.\n<\/p>\n
Appeal\tfrom the judgment and order dated November 28,\t1962
\nof the Punjab High Court in Letters Patent Appeal No. 212 of
\n1961.\n<\/p>\n
Bishan\tNarain\tand  B. P. Maheshwari,\tfor  the  appellant.
\nNaunit Lal, for respondent Nos.\t 1 to 3.
\nThe Judgment of the Court was delivered by
\nMitter,\t J.  This is an appeal by a  certificate  against  a
\njudgment of    a  Division  Bench  of  the  High  Court\t  at
\nChandigarh  in Letters Patent Appeal No. 212 of\t 1961.\t The
\nHigh  Court  allowed  the  appeal on  the  ground  that\t the
\napplication out of which it arose was incompetent as  barred
\nby limitation and, in our opinion, it did so correctly.\t The
\nshort question before us is, whether application leading  to
\nthis appeal was one under s. 68<\/a> of the Provincial Insolvency
\nAct,  and as such having been made beyond the period  of  21
\ndays from the date of the act of the receiver complained of,
\nwas  covered by the proviso to that section ? In  substance,
\nthe  argument  on  behalf  of the  appellant  was  that\t the
\napplication was one under s. 4<\/a> of the Act in which there  is
\nno mention of any period of limitation.
\nThe  facts necessary for the disposal of this appeal are  as
\nfollows\t :-Brij\t Lal  and Hans Raj  were  brothers.   On  an
\napplication having been made by the creditors of Brij Lal in
\nthe year 1949, the insolvency Judge, Barnala adjudicated him
\nas   an\t insolvent,  on\t 23rd  November,  1954.\t  Two\tdays
\nthereafter, one Mohinder Lal was appointed as a receiver  in
\ninsolvency by the order of the Court and lie was directed to
\ntake  possession of the property of the insolvent.  On\t26th
\nand  27th  November, 1954 the receiver\ttook  possession  of
\nvarious properties of the insolvent and attached some  urban
\nproperty and agricultural land which are the  subject-matter
\nof  the\t present litigation.  Hans Raj\tfiled  an  objection
\napplication  on\t 21st  December,  1954\talleging  that\t the
\nproperty   detailed   therein  belonged\t to  him   and\t was
\nexclusively in his possession.\tHe prayed for release of the
\nproperty  from attachment and restoration of  possession  to
\nhim.   The  receiver pleaded that he  had  taken  possession
\nthereafter at the instance of two creditors.  The insolvency
\nJudge framed two issues, namely, (1) Is
\n367<\/span>
\nthe  objector owner of the suit property and  in  possession
\nthereof\t and is it accordingly not liable to be attached  by
\nthe  receiver ? and (2) whether the objection  petition\t was
\ntime-barred  ?\tThe learned Judge decided  the\tfirst  issue
\nagainst\t the objector but held that the application was\t not
\ncovered by s. 68<\/a> of the Act.  In appeal, the District  Judge
\ndiffered  from\tboth the findings.  He held that  there\t had
\nbeen no partition of the joint Hindu family of the insolvent
\nand  his brother, but, on the point of limitation  he  found
\nagainst the objector.  In the result, he accepted the appeal
\nand  dismissed the objection petition.\tHans Raj went up  in
\nSecond Appeal to the Punjab High Court.\t The learned  single
\nJudge  of  the High Court came to the  conclusion  that\t the
\nproperty  in  dispute  must be deemed  to  be  the  separate
\nproperty  of  Hans  Raj and held that  the  application\t was
\nwithin time.  Rattan Lal who replaced the original  receiver
\non  the latter’s death tiled a Letters Patent Appeal to\t the
\nHigh Court.  The High Court, as already noted, held that the
\nApplication of Hans Raj was not within time resulting in the
\ndismissal of the objection petition.
\nWe must first consider the nature of the application made by
\nthe  objector and then find out whether it is covered by  s.
\n68<\/a> of the Act.\tSection 4<\/a> of the Act on which Great reliance
\nwas  placed by learned counsel for the appellant is  one  of
\nthe three sections in Part I of the Act i.e. ss. 3<\/a>, 4<\/a> and 5<\/a>.
\nSection\t 3<\/a> lays down that the District Courts shall  be\t the
\ncourts having jurisdiction under the Act.  Section 4<\/a> defines
\nthe jurisdiction of the Court and runs a.-, follows :-\n<\/p>\n
\t      “(1)  Subject to the provisions of  this\tAct,
\n\t      the Court shall have full power to decide\t all
\n\t      questions whether of title or priority, or  of
\n\t      any  nature whatsoever, and whether  involving
\n\t      matters of law or of fact, which may arise  in
\n\t      any  case\t of  insolvency\t coming\t within\t the
\n\t      cognizance  of the Court, or which  the  Court
\n\t      may  deem it expedient or necessary to  decide
\n\t      for  the purpose of doing complete justice  or
\n\t      making a complete distribution of property  in
\n\t      any such case.\n<\/p><\/blockquote>\n
\t      (2)Subject  to the provisions of this Act\t and
\n\t      notwithstanding  anything\t contained  in\t any
\n\t      other  law for the time being in force,  every
\n\t      such  decision shall be final and binding\t for
\n\t      all purposes as between, on the one hand,\t the
\n\t      debtor  and  the debtor’s estate and,  on\t the
\n\t      other  hand, all claimants against him  or  it
\n\t      and all persons claiming through or under them
\n\t      or any of them.<\/p><\/blockquote>\n
\t      (3)Where the Court does not deem it  expedient
\n\t      or  necessary  to decide any question  of\t the
\n\t      nature referred to in sub-section (1), but has
\n\t      reason  to  believe  that\t the  debtor  has  a
\n\t      saleable interest in any property, the Court
\n\t      368<\/span>
\n\t      may without further inquiry sell such interest
\n\t\t\t    in\tsuch manner and subject to such\t c
\nonditions
\n\t      as it may think fit.”\n<\/p>\n
\t      Section  5<\/a>  lays down the\t general  powers  of
\n\t      courts  under the Act.  Part 11 which has\t the
\n\t      heading  “Proceedings from the act  of  insol-
\n\t      vency  to discharge” deals generally with\t the
\n\t      course   of  the\tproceedings  in\t  insolvency
\n\t      beginning\t from the acts of insolvency to\t the
\n\t      order  for discharge of insolvency.  Part\t III
\n\t      is  headed  “administration of  property”\t and
\n\t      deals  with different subjects like method  of
\n\t      proof  of\t debts,\t effect\t of  insolvency\t  on
\n\t      antecedent   transactions,   realisation\t  of
\n\t      property, distribution of properly” and lastly
\n\t      “appeals to court against receiver”.  The last
\n\t      topic  is covered by s. 68<\/a> which\tprovides  as
\n\t      follows :-\n<\/p>\n
\t      “If  the insolvent or any of the creditors  or
\n\t      any  other person is aggrieved by any  act  or
\n\t      decision of the receiver, he may apply to\t the
\n\t      Court,  and the Court may confirm. reverse  or
\n\t      modify the act or decision complained of,\t and
\n\t      make such order as it thinks just :\n<\/p>\n
\t      Provided\t that  no  application\tunder\tthis
\n\t      section\tshall  be  entertained\t after\t the
\n\t      expiration of twenty-one days from the date of
\n\t      the act or decision complained of.”\n<\/p>\n
Part   IV  deals  with\tpenalties,  Part  V   with   summary
\nadministration,\t Part  VI  with appeals and  Part  Vll\twith
\ntopics like costs, power to make rules, etc.
\nUnder s. 20<\/a> (contained in Part 11) the court when making, an
\norder  admitting the petition may, and where the  debtor  is
\nthe petitioner ordinarily shall appoint in interim  receiver
\nof the property of the debtor or of any part thereof and the
\ninterim\t received, shall thereupon have such of\t the  powers
\nconferable  on a receiver appointed under the Code of  Civil
\nProcedure  as the court may direct.  If an interim  receiver
\nis not so appointed, the court may make such appointment  at
\nany  subsequent time before adjudication.  Under s.  21<\/a>,  at
\nthe time of making an order admitting the petition or at any
\nsubsequent time before adjudication the court may either  of
\nits  own motion or on the application of any  creditor\tmake
\norders\tto suit the occasion. namely, direct the  attachment
\nby  actual seizure of the whole or any part of the  property
\nin the possession or under the, control of the debtor, order
\na  warrant to issue with or without bail for his arrest,  or
\norder  the debtor to reasonable security for his  appearance
\nuntil final orders are made on the petition.  Under s. 28(2)<\/a>
\non  the making of an order of adjudication ‘, the  whole  of
\nthe property of the insolvent is to vest ill the court or in
\na receiver as provided in the Act and become divisible among
\nthe creditors in terms of the Act.  Under s. 56(1)<\/a> the court
\nmay at the time of the order of adjudication or at any\ttime
\nafterwards,  appoint  a\t receiver for the  property  of\t the
\ninsolvent, and
\n369<\/span>
\nsuch property shall thereupon vest in such receiver.   Under
\nsubs.  (3)  of\tthe  section, where  the  court\t appoints  a
\nreceiver,  it may remove the person in whose  possession  or
\ncustody\t  any  such  property  as  aforesaid  is  from\t the
\npossession or custody thereof but nothing in this section is
\nto  be\tdeemed\tto authorise the court to  remove  from\t the
\npossession  or\tcustody\t of property  any  person  whom\t the
\ninsolvent has not a present right so to remove.\t Under\tsub-
\ns. (5) the provisions of this section shall apply so far  as
\nmay be to interim receivers appointed tinder s. 20<\/a>.
\nIt  will be noted from the above that S. 4<\/a>, sub-s. (1)\tlays
\ndown  the  ambit  of  the powers  of  the  court  exercising
\ninsolvency  jurisdiction.  Its primary object is to  empower
\nsuch  courts  to decide all questions whether  of  title  or
\npriority  or of any nature whatsoever and whether  involving
\nmatters\t of  law  or fact which may arise  in  any  case  of
\ninsolvency  coming within the cognizance of the\t court.\t  In
\nother words, the aim of this provision is that all questions
\nof title or priority arising in insolvency should  primarily
\nbe  disposed  of by the insolvency courts so as\t to  achieve
\nexpedition.   It  will\tbe  noted at  once  that  resort  to
\nordinary  courts  of law is not proscribed and at  the\tsame
\ntime the legislature provided that a person could resort  to
\nthe  insolvency\t court\tif the matter  arose  in  insolvency
\nproceedings.   Under sub-s. (2) however every such  decision
\narrived\t at  by\t the insolvency court was to  be  final\t and
\nbinding\t for  all purposes as between on the one  hand,\t the
\ndebtor and the debtor’s estate, and, on the other hand,\t all
\nclaimants against him or it and all persons claiming through
\nor  under  them or any of them.\t This provision\t is  however
\nsubject\t to  the other provisions of the  Act  and  notwith-
\nstanding  anything contained in any other law for  the\ttime
\nbeing  in force.  It is also to be noted that  this  section
\ndoes  not  lay down what procedure or what steps  should  be
\ntaken  by  any person who is aggrieved by any order  of\t the
\ninsolvency court or of any act or omission or commission  of
\nthe receiver.\n<\/p>\n
Section\t 20<\/a>  of\t the Act empowers the court  to\t appoint  an
\ninterim receiver of the property of the debtor as soon as an
\norder is made admitting the petition.  For the\tpreservation
\nof  the\t insolvent’s  property, the court  may\tdirect\tsuch
\ninterim\t receiver to take immediate possession of the  whole
\nor  any\t part  thereof.\t A duty is  therefore  cast  on\t the
\ninterim\t receiver to see that the property of the debtor  is
\nnot  lost and for that purpose lie must act quickly.  As  it
\nis  not\t possible for him except on the application  of\t the
\ndebtor to know all the details of the insolvent’s  property,
\nlie  may  take the help of the creditors to  ascertain\twhat
\nthey  are.   In this case, on the day of the making  of\t the
\norder for adjudication, the court did not appoint a receiver
\nbut  did  so  two  days afterwards  directing  him  to\ttake
\npossession of the property of the insolvent.  It is possible
\nthat the receiver may be misled by the creditors and he\t may
\nattach
\n370<\/span>
\nproperties  in which as a matter of fact, the insolvent\t has
\nno interest.  In such a case, the stranger to the insolvency
\nproceedings is not without a remedy.  He need not resort  to
\nthe  ordinary and dilatory proceedings by tiling a suit\t and
\ngetting an adjudication of title to his property, removal of
\nthe  attachment,  etc.\tSection 68<\/a> is aimed  at\t giving\t him
\nspeedy relief by enabling him to make an application to\t the
\ncourt  straight\t way  against any act  or  decision  of\t the
\nreceiver and asking for appropriate relief.  If however\t the
\nparty aggrieved seeks to benefit by this provision, he\tmust
\nalso  bring his case within the four corners of the  section
\nand  prefer his application within 21 days from the date  of
\nthe act or decision of the receiver complained of. When\t the
\nreceiver does an act under the express directions or  orders
\nof  the court, an application by a third  party\t complaining
\nthereof\t does not fall within S. 68<\/a> because  the  receiver’s
\nact  is a ministerial one.  The aggrieved person is  however
\nnot  without  a\t remedy.  He can inter\talia  apply  to\t the
\ninsolvency court for undoing the wrong complained of and the
\ncourt  can  give such relief as the circumstances  may\tcall
\nfor.   The  jurisdiction of the court and the ambit  of\t its
\npowers\tare as contained in s. 4<\/a> which however does not\t Jay
\ndown  any  procedure for obtaining such relief.\t It  is\t not
\ntherefore  correct to describe an application for relief  as
\none under s. 4<\/a>.\n<\/p>\n
Leaving aside the decisions which were cited at the Bar,  it
\nappears to us, on a plain reading of the sections  mentioned
\nabove and in particular, ss. 4<\/a> and 68<\/a>, that there can be  no
\ndoubt\tthat  a\t person\t (like\tthe  appellant\tbefore\t us)
\ncomplaining   of  the  receiver\t taking\t possession  of\t  or
\nattaching  property in which the insolvent has no  interest,
\nmust apply for relief within 21 days of the wrongful act  of
\nthe  receiver.\tHe cannot be heard to say that his  applica-
\ntion  is  not under s. 68<\/a> but under s. 4<\/a> and  thus  seek  to
\navoid the short period of limitation prescribed under s. 68<\/a>.
\nMoreover,  subs. (1) and sub-s. (2) of S. 4<\/a> both start\twith
\nthe phrase “subject to the provisions of this Act” and\teven
\nif  it\twas  possible to construe that s.  4<\/a>  envisaged\t the
\nmaking of an application for relief, such application  would
\nbe subject to S. 68<\/a> of the Act.\n<\/p>\n
We  may now consider some of the decisions cited at the\t Bar
\nfor or against the proposition put forward on behalf of\t the
\nappellant.\n<\/p>\n
The sheet anchor of the appellant’s case is the decision  of
\nthe  Allahabad\tHigh Court in Nathu Ram v.  Madan  Gopal<\/a>(1).
\nThere the Official Receiver, in pursuance of an order of the
\ninsolvency court, attached a property on 8th June 1929.\t  On
\n2nd July following, the son of the insolvent applied to\t the
\ninsolvency court alleging that the property belonged to\t him
\nand  not the insolvent.\t The court decided in favour of\t the
\nson  but was not called upon to go into the question  as  to
\nwhether the application was within time.
\n(1)  A.I.R. 1932 Allahabad 408.\n<\/p>\n
371<\/span><\/p>\n
This quest-ion of limitation was raised before the  District
\nJudge  and  the\t objection was over-ruled by  him.   It\t was
\nobserved by a Division Bench of the Allahabad High Court:\n<\/p>\n
\t      “The house was attached under an order of\t the
\n\t      Insolvency  Court, and not by any\t independent
\n\t      decision of the Official Receiver.  The actual
\n\t      attachment was a mere ministerial act done  in
\n\t      pursuance\t of  the order of  the\tCourt.\t The
\n\t      objector\twas not challenging the act  of\t the
\n\t      receiver, who had no voice in the matter,\t but
\n\t      the order of attachment passed by the Court ex
\n\t      parte.  It seems to us that it was not an\t act
\n\t      or decision of the receiver within the meaning
\n\t      of  s. 68<\/a>.  On the other hand, it was a  claim
\n\t      put  forward by a stranger to  the  insolvency
\n\t      proceedings  setting  up his  own\t independent
\n\t      title,  and it fell within the scope of s.  4<\/a>,
\n\t      Provincial Insolvency Act<\/a>.”\n<\/p><\/blockquote>\n
The learned Judges distinguished the cases of Bhairo  Prasad
\nvS. P. C. Dass(1) and Hussaini v. Muhammad Zamir Abdi(2)  on
\nthe  ground  that in those cases there was no order  of\t the
\ncourt directing attachment but the act complained of was  an
\nact of the receiver himself.\n<\/p>\n
In  Bhairo Prasad’s case(1) the Provincial  Insolvency\tAct<\/a>,
\n1907 was in operation and there a stranger to the insolvency
\ncomplained  of\tan act of attachment after the lapse  of  21
\ndays.\tA  Division Bench of the Allahabad High\t Court\theld
\nthat  the application was barred by limitation observing  at
\nthe same time :\n<\/p>\n
\t      “A stranger to the insolvency is not bound  to
\n\t      go to the Insolvency Court at all.  He has the
\n\t      ordinary right, which every individual has, to
\n\t      seek redress in the ordinary civil courts\t for
\n\t      any  grievance  or trespass to  his  property,
\n\t      whether  committed by an Official Receiver  or
\n\t      anybody else, but he can, if he pleases, if he
\n\t      complains\t against  the act of  the  receiver,
\n\t      apply  under  s. 22<\/a> to  the  insolvency  court
\n\t      itself.  .  . . But similarly  if\t he  applies
\n\t      under s. 22<\/a>, he must comply with the terms  of
\n\t      s. 22<\/a>.”\n<\/p><\/blockquote>\n
\t      In Mt.  Husaini Bibi’s case(3) certain  houses
\n\t      were proclaimed for sale on 14th June 1922 and
\n\t      on  last July the appellant, the wife  of\t the
\n\t      insolvent, put in a claim that the  properties
\n\t      belonged\t to  her.   The\t  insolvency   court
\n\t      referred the appellant to the civil court\t and
\n\t      a\t suit  was  filed on  4th  July\t 1922.\t The
\n\t      properties  were sold by the receiver  on\t 5th
\n\t      July  before an injunction of the civil  court
\n\t      restaining  a  sale  could be  served  on\t the
\n\t      receiver.\t  On 3rd August 1922  the  appellant
\n\t      applied\tto  the\t District  Judge   for\t the
\n\t      cancellation   ,if   the\t sale.\t  This\t was
\n\t      dismissed.  The subject of appeal before the
\n\t      (1)   A.I.R. 1919 Allahabad 274.\n<\/p><\/blockquote>\n
\t      (2) A.I.R. 1924 Oudh 294.\n<\/p><\/blockquote>\n
\t      CI\/67-11
\n\t      A.I.R. 1924 Oudh 294.\n<\/p><\/blockquote>\n
\t      372<\/span><\/p>\n
\t      High  Court was the order of  dismissal.\t The
\n\t      learned\tsingle\tJudge  relied  upon   Bhairo
\n\t      Prasad’s case(1) and observing that the appli-
\n\t      cation   presented  on  3rd  of\tAugust\t was
\n\t      apparently  one  under S. 68<\/a> of the  Act\theld
\n\t      that  it was barred before the 3rd of  August.<\/p><\/blockquote>\n
\t      It was further pointed out that a stranger  to
\n\t      the   insolvency\tmay  seek  his\tredress\t  in
\n\t      ordinary civil court when aggrieved by any act
\n\t      of  the  Official Receiver, or  he  may  apply
\n\t      under S. 68<\/a> of the Act (corresponding to s. 22<\/a>
\n\t      of  the previous Act).  Reference may also  be
\n\t\t\t    made  to an earlier decision of the\t A
\nllahabad
\n\t      High  Court  in Mul Chand\t v.  Murari  Lal<\/a>(2).
\n\t      There  the  receiver  in\t insolvency   seized
\n\t      certain  movable property on  the\t information
\n\t      laid  by one of the creditors as\tproperty  of
\n\t      the insolvents.  The appellant before the High
\n\t      Court  claimed that the property was  his\t and
\n\t      presented\t an objecting purporting to  be\t one
\n\t      under  0.\t XXI  r. 58 of\tthe  Code  of  Civil
\n\t      Procedure.  This was dealt with by the  Second
\n\t      Additional  Judge of Meerut on the merits\t who
\n\t      after  taking evidence came to the  conclusion
\n\t      that  the\t property  seized  belonged  to\t the
\n\t      insolvents   and\tdismissed  the\t appellant’s
\n\t      application.  The Allahabad High Court pointed
\n\t      out that the appellant’s position was that  of
\n\t      a person -aggrieved by an act of the  receiver
\n\t      and his remedy was by an application under  S.
\n\t      22 of Act III of 1907.\n<\/p>\n
\t      These decisions, in our opinion, do not assist
\n\t      the  appellant on whose behalf it\t was  argued
\n\t      that an application might be made either under
\n\t      S.  68<\/a> or under s. 4<\/a> of the Act.\tIt is  clear
\n\t      from   the  above\t decisions  that  a   person
\n\t      complaining  of  the act of the  receiver\t may
\n\t      either apply under S. 68<\/a> or proceed under\t the
\n\t      ordinary law of the land.\t Section 4<\/a> does\t not
\n\t      prescribe\t any  application for  relief  under
\n\t      that  section.   Its object is to\t define\t the
\n\t      limits   of   jurisdiction   of\tthe   courts
\n\t      exercising  powers in insolvency.\t It  is\t not
\n\t      correct  to say that a person aggrieved by  an
\n\t      act of the receiver has the choice, of  making
\n\t      an  application  under s. 4<\/a> or  under  s.\t 68<\/a>.
\n\t      Section  4<\/a> comes into operation  whenever\t any
\n\t      question\tof the nature mentioned\t therein  is
\n\t      sought   to  be  canvassed  before   a   court
\n\t      exercising   insolvency  jurisdiction.\tSuch
\n\t      questions\t may arise because of acts or  deci-
\n\t      sions  of\t the  receiver\tcomplained  of.\t   A
\n\t      question\tas to whether an insolvent  has\t any
\n\t      interest\tin  the\t property  attached  by\t the
\n\t      receiver\twould fall within the purview of  S.
\n\t      4<\/a>, but the application for the adjudication of
\n\t      such   a\tquestion  when\tthe  receiver\tacts
\n\t      otherwise\t than  under the order\tof  a  court
\n\t      would  be\t covered by s. 68<\/a> and  as  such\t the
\n\t      period of limitation of twenty-one days  would
\n\t      be attracted to any such application.
\n\t      Mr.  Bishan  Narain  referred  us\t to  a\t few
\n\t      decisions\t  of   different  High\t Courts\t  as
\n\t      illustrating his proposition that applications
\n\t      are  permissible under s. 4<\/a> of the  Provincial
\n\t      Insolvency  Act.\t In Vellayappa\tChettiar  v.
\n\t      Ramanathan Chettiar<\/a> (2) cited on behalf of the
\n\t      (1)      A.I.R.\t   1919\t     All.\t274.\n<\/p>\n
\t      (2) I.L.R. 36 Allahabad 8.\n<\/p>\n
\t      (3)   I.L.R. 47 Madras 446.\n<\/p>\n
\t      373<\/span><\/p>\n
\t      appellant,  the  facts were  as  follows.\t The
\n\t      respodent obtained a mortgage decree against a
\n\t      person  who  was subsequently  adjudicated  an
\n\t      insolvent\t and the Official  Receiver  assumed
\n\t      jurisdiction  over his properties.  While\t the
\n\t      latter was taking steps to realise the assets,
\n\t      the  appellant  asserted\tthat  some  of\t the
\n\t      properties covered by the mortgage decree were
\n\t      his  and denied the right of the insolvent  to
\n\t      such properties, at the same time,  preferring
\n\t      a claim petition before the Official Receiver.
\n\t      The  Receiver  enquired  into  the  same\t and
\n\t      allowed\tit.    Against\t that\torder,\t the
\n\t      mortgagee-decreeholder filed a petition before
\n\t      the  District Judge under s. 68<\/a> who set  aside
\n\t      the order of the Official Receiver and further
\n\t      directed that the claim petition also do stand
\n\t      dismissed.  The claimant went up in appeal  to
\n\t      the Madras High Court.  The learned Judges  of
\n\t      the  Madras High Court said that the whole  of
\n\t      the  proceedings\twas  misconceived  observing
\n\t      that  the\t Official Receiver had no  power  to
\n\t      make any order in a claim petition as this was
\n\t      not  a power delegated to him under s.  80<\/a>  of
\n\t      the   Provincial\tInsolvency  Act\t  of   1920.
\n\t      According\t to the High Court, if the  claimant
\n\t      wanted to prevent the sale of the property  as
\n\t      belonging\t to  the insolvent, he\tshould\thave
\n\t      applied  to the District Judge direct to\ttake
\n\t      action  under  s. 4<\/a> of the Act.\tHe  did\t not
\n\t      however do so.  In the result, the High  Court
\n\t      set  aside  all the proceedings in  the  lower
\n\t      court and left the parties in status quo ante,
\n\t      commenting  at  the  same time,  that  if\t the
\n\t      claimant\tfound  that  the  Official  Receiver
\n\t      proposed to sell the properties he might apply
\n\t      to  the District Judge under s. 4<\/a> of the\tAct.
\n\t      The  last portion of the above  paragraph\t was
\n\t      quoted  as supporting the proposition that  an
\n\t      application  lay under s. 4<\/a> of the Act.\tThat
\n\t      is  not what the learned Judges of the  Madras
\n\t      High Court meant.\t In our view, what was meant
\n\t      was   that   the\tclaimant   might   make\t  an
\n\t      application  to the District Judge  who  would
\n\t      under s.4 of the Act have jurisdiction to pass
\n\t      a proper order thereon.\n<\/p>\n
\t\tOur attention was also drawn to the case  of
\n\t\t\t    Venkatarama v.Angathayammal<\/a>(1) where t
\nhe  above
\n\t      Madras decision was cited and at more than one
\n\t      place, the learned Judge used the\t expressions
\n\t      “an  application\tunder s. 4<\/a>” and\t “an  appeal
\n\t      under  s.\t 68<\/a>“.\tWith  all  respect  to,\t the
\n\t      learned Judge, it seems, to us that these\t ex-
\n\t      pressions were not accurate for s. 68<\/a> although
\n\t      headed  “appeals\tto court  against  receiver”
\n\t      does  not, as a matter of fact, use  the\tword
\n\t      “appeal”\tin  the body of\t the  section.\t The
\n\t      application  under  s. 68<\/a> however\t in  reality
\n\t      amounts  to  an  appeal  to  a  court  from  a
\n\t      decision\tof  the\t receiver  but\tthe  section
\n\t      itself lays down that the party aggrieved must
\n\t      “apply to the court”.  Similarly, a proceeding
\n\t      in  which\t jurisdiction  under  S.  4<\/a>  may  be
\n\t      exercised\t is not an application under  S.  4<\/a>.
\n\t      The proceeding has to be started by way of  an
\n\t      application whenever anybody seeks to have  an
\n\t      adjudication  by\tthe  court  of\tthe   nature
\n\t      described in S. 4<\/a>.\n<\/p>\n
\t      ((1) A.I.R. 1933 Madras 471.\n<\/p>\n
\t      374<\/span><\/p>\n
\t      In this connection, our attention was drawn to
\n\t      several  other decisions; it is not  necessary
\n\t      to go into the facts of these cases.  In G. N.\n<\/p>\n
\t      Godbole\t v.    Mt.     Nani    Bai(1)\t and
\n\t      Muthupalaniappa  V.  Raman  Chettiar<\/a>(2),\t the
\n\t      expression  “proceedings under S. 4<\/a>” had\tbeen
\n\t      used while in Heerabai v. Official Receiver<\/a>  3
\n\t      ) the petitioner before the High Court, mother
\n\t      of  the two insolvents, laid a claim to  1\/3rd
\n\t      share  in\t the properties which  the  Official
\n\t      Receiver\tsold on 16th April, 1960  purporting
\n\t      to  be those of the insolvents.  According  to
\n\t      the  judgment “the petitioner filed  I.A.\t No.
\n\t      1900  of\t1960 on 28-6-1960 purporting  to  be
\n\t      under   ss.  4<\/a>  and  68<\/a>  of   the\t  Provincial
\n\t      Insolvency Act.” She also filed I.A. No.\t1899
\n\t      of 1960 for condoning the delay in filing this
\n\t      application as ordinarily “the appeal under S.
\n\t      68<\/a> should have been filed by her on or  before
\n\t      5-7-1960″.   The insolvency court held in\t the
\n\t      proceedings under s. 68<\/a> that there could be no
\n\t      condonation  of delay but failed to  ascertain
\n\t      with reference to the nature of I.A. No.\t1900
\n\t      of  1960\twhether it fell under s.  4<\/a>  of\t the
\n\t      Provincial Insolvency Act.  The learned  Judge
\n\t      found  that  the petitioner had not  made\t any
\n\t      claim before the Official Receiver and even if
\n\t      she chose to make any such claim, the Official
\n\t      Receiver had no power whatever to decide\tupon
\n\t      such claim petitions.  It was observed :
\n\t      “Therefore,  an application such as  I.A.\t No.
\n\t      1900  of 1960 cannot be taken in any sense  to
\n\t      be  an appeal against the act of the  Official
\n\t      Receiver as such.\t On the other hand, when the
\n\t      petitioner herein wanted that her share should
\n\t\t\t    be untouched, it is certainly a case w
\nhere  the
\n\t      petitioner  approached the court to  determine
\n\t      the  question  of\t her  title,  which  it\t  is
\n\t      competent\t to  do\t only  under  s.  4<\/a>  of\t the
\n\t      Provincial  Insolvency Act.  Therefore, in  my
\n\t      view, it is idle to contend that I.A. No. 1900
\n\t      falls within the purview of s. 68<\/a>, and that it
\n\t      should  be  taken to be an appeal and  not  an
\n\t      application   which   is\t contemplated\t and
\n\t      competent\t  under\t s.  4<\/a>\tof  the\t  Provincial
\n\t      Insolvency Act.”\n<\/p>\n
It is difficult to accept the soundness of some of the dicta
\nin  the\t above\tjudgment.  The Official\t Receiver’s  act  in
\nselling\t the  property\ton 16-4-1960 may  have\tbeen  wholly
\nwrong,\tbut  if\t the petitioner wanted the same\t to  be\t set
\naside, she could either have made an application under s. 68<\/a>
\nto the court or she could have filed a suit for relief under
\nthe ordinary law of the land.  She could not, after a period
\nof  21\tdays,  start a proceeding in  the  insolvency  court
\ndescribing it as one under s. 4<\/a> so as to get out of the\t bar
\nof  limitation imposed by S. 68<\/a>.  She need not\thave  waited
\ntill  the sale of property.  She might have applied  to\t the
\ncourt  as  soon\t as  the receiver took\tthe  first  step  by
\nattaching the property.\n<\/p>\n
(1)  A.I.R. 1938 Nagpur 546.\t\t    (2) A.I.R.\t1941
\nMadras75.\n<\/p>\n
(3)A.I.R. 1963 A.P. 296.\n<\/p>\n
375<\/span><\/p>\n
In  our\t opinion,  Jai Lal, J.\tcorrectly  pointed  out\t the
\ncorrelation   between  ss.  4<\/a>  and  68<\/a>\tin  Daulat  Ram\t  v.
\nBansilal(1).   The appellant had a money decree against\t the
\ninsolvents which he executed by attachment of a moiety of  a
\nshare in a house which he alleged belonged to the  judgment-
\ndebtors.   This\t was before the order of  adjudication.\t  An
\nobjection  was raised by the respondent, Bansilal,  that  he
\nwas a purchaser for consideration of the attached  property.
\nThe objection having been allowed, a suit was filed under O.
\n21,  r.\t 63  C.P.C.  by\t the  attaching\t decree-holder\t and
\nultimately decreed, it having been held that the sale by the
\njudgment-debtors  was fraudulent as against  the  creditors.
\nThe  receivers\tin insolvency then took\t possession  of\t the
\nproperty attached by the appellant and sold the same in\t the
\ninsolvency   proceedings.    Bansilal  thereupon   made\t  an
\napplication under s. 68<\/a> on the ground that the action of the
\nreceivers  was\tillegal.   The District\t Judge\tallowed\t the
\napplication holding that the decree passed in the suit under
\nO.  21\tr.  63 was operative only so far  as  the  execution
\nproceeding’s  were concerned and that it did not  enure\t for
\nthe benefit of the other creditors.  He therefore set  aside
\nthe  sale  by the receivers.  The  creditors  including\t the
\nappellant  came up in appeal from the order of the  District
\nJudge.\t An objection was raised by the respondents that  no
\nappeal lay without the leave either of the District Judge or
\nof  the\t High  Court.  In disposing of\tthis,  Jai  La],  J.
\nobserved :\n<\/p>\n
\t      “I  am  inclined\tto  think  that\t though\t the
\n\t      District Judge was moved under s. 68<\/a> which  is
\n\t      not  one of the sections mentioned in Sch.  1,
\n\t      the  investigation,  which he is\texpected  to
\n\t      make  in a case like, the present,  should  be
\n\t      under s. 4<\/a>, Provincial Insolvency Act<\/a>, and any
\n\t      order  passed by him under s. 4<\/a> is  appealable
\n\t      as of right to this Court.”\n<\/p><\/blockquote>\n
An  observation similar to the above was made, by  the\tsame
\nlearned\t Judge in Mul Raj v. Official Receiver<\/a> (2 )  .\tThis
\npoint was also brought out in Ganda Ram v. Shiv Nand  Ganesh
\nDas(3).\t The scope of the two sections was brought out\teven
\nmore  clearly in a judgment of the Rangoon High Court in  Ma
\nSein Nu v. U Mg.  Mg.(4) where it was said :\n<\/p>\n
\t      “Now,   s.  4<\/a>  defines  the  powers   of\t the
\n\t      Insolvency  Court to decide questions  of\t law
\n\t      and  fact arising in  insolvency\tproceedings,
\n\t      but  it does not lay down how the court is  to
\n\t      be moved to exercise those powers. . . . .  of
\n\t      course,  the powers of the court\tin  deciding
\n\t      such  an application are defined in s. 4<\/a>,\t but
\n\t      this does not mean that the application itself
\n\t      is  made under s. 4<\/a>, and clearly it cannot  be
\n\t      for  s. 4<\/a> contains no provision as to how\t the
\n\t      court is
\n\t      (1)   A.I.R. 1937 Lahore page 2.\n<\/p><\/blockquote>\n
\t      (3)   A.I.R. 1937 Lahore 757.\n<\/p><\/blockquote>\n
\t      (2)   A.I.R. 1937 Lahore 297.\n<\/p><\/blockquote>\n
\t      (4)   A.I.R. 1934 Rangoon 97.\n<\/p><\/blockquote>\n
\t      376<\/span><\/p>\n
\t      to  be moved to exercise its powers,  and\t for
\n\t      the  mode\t of invoking the  authority  of\t the
\n\t      Court other provisions of the Act, such as ss.
\n\t      53<\/a>, 54<\/a> and 68<\/a>, have to be consulted.”\n<\/p><\/blockquote>\n
In the result, we hold that the application being one  under
\ns. 68 was incompetent on the ground of limitation after\t the
\nlapse  of  21 days from November 25, 1954.   The  appeal  is
\ntherefore dismissed with costs.\n<\/p>\n
R.K.P.S.\n<\/p>\n
\t\t\t\t\tAppeal dismissed.\n<\/p>\n
377<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Hans Raj vs Rattan Chand, Etc on 3 April, 1967 Equivalent citations: 1967 AIR 1780, 1967 SCR (3) 365 Author: G Mitter Bench: Mitter, G.K. PETITIONER: HANS RAJ Vs. RESPONDENT: RATTAN CHAND, ETC. DATE OF JUDGMENT: 03\/04\/1967 BENCH: MITTER, G.K. BENCH: MITTER, G.K. WANCHOO, K.N. BHARGAVA, VISHISHTHA CITATION: 1967 AIR 1780 […]<\/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-266968","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nHans Raj vs Rattan Chand, Etc on 3 April, 1967 - Free Judgements of Supreme Court & 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\/hans-raj-vs-rattan-chand-etc-on-3-april-1967\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hans Raj vs Rattan Chand, Etc on 3 April, 1967 - 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