Doraisami Pillai vs Arumuga Naicker

Cornish, J.—The question raised in this Second Appeal is an important one, and I should have been glad if it had been argued on behalf of

the respondent. However, I have had the benefit of a very able argument from the learned Advocate of the appellant, and I am satisfied on that

argument that this appeal should succeed. The facts are that the appellant obtained a money decree against respondent, having attached

respondent''s property before judgment. Notwithstanding the attachment, and contrary to it, the respondent alienated the property to some third

person. Subsequent to these events the respondent was adjudicated insolvent, and the appellant proved his debt due under the decree. I am told

that he received nothing, as no assets were realized by the Official Receiver. In due course the debtor received his discharge. The appellant then

sought to execute his decree against the property which he had attached and which, as already stated, the debtor had transferred prior to his

insolvency. Both the lower Courts have held that Section 44(2) of the Provincial Insolvency Act is a bar in the appellant''s way. The section states

that, save as provided by Sub-section (1), an order of discharge shall release the insolvent from all debts provable under the Act. The argument

which prevailed in the lower Court was that this decree debt being a debt provable in the insolvency the debtor''s discharge absolved him from all

further liability in respect of it. But it seems to me that this view of the position is hardly sufficient to dispose of the case. If the property at the time

of the adjudication was the property of the debtor, or if it had come in to the hands of the Official Receiver for realisation, I think that after the

discharge it would no longer have been open to the appellant to pursue his claim against the debtor or against his property. But the effect of the

transfer contrary to Section 64 of the CPC was not to make the transfer absolutely void, so that the property could still be treated as the assets of

the debtor notwithstanding the transfer. Thus in Naranappier Vs. Chidamabaram Pillai and Others, , Venkatasubba Rao, J., has stated:

The section does not provide that the transfer shall be void absolutely or without limitation but only ''as against all claims enforceable under the

attachment''. That means, that the purchaser is subject to the same liabilities as the judgment-debtor was.... The transfer is subject to the claims

under the attachment.

I think it cannot be said that the transferee stands in a better position by reason of his transferor''s subsequent discharge by the Insolvency

Court, or that the transferor''s-discharge operates to relieve the property in the hands of the transferee from subjection to the claims under the

attachment. For these reasons I am of opinion that this appeal should be allowed with costs and that appellant should be allowed to proceed with

his execution.