Kuppu Ramanatha Aiyar (dead) and Others vs Thoguluva S. Nagendra Aiyar

This case refers to what is ordinarily called ""the after-acquired"" property of an insolvent. The respondent after he was adjudicated an insolvent in

1909 seems to have started a partnership with the appellant. He has now brought a suit to wind up that partnership and for an account and for

payment over to him of any money that may be found due to him. The suit was brought in 1919. The partnership had been started in 1911 and it

seems to have lasted till the end of 1916. In the Insolvency proceedings no receiver seems to have been appointed at first, and it was only on 29-

3-1919 the Official Receiver was appointed as Receiver. The defendant pleaded in the suit that the plaintiff was an undischarged insolvent and that

he was not entitled to bring the suit or to go on with it. The District Munsif gave effect to that objection and dismissed his suit. The Subordinate

Judge has reversed that decision and remanded the suit for disposal according to law. It is against that decision that the present appeal has been

filed.

The question which we have to consider is whether, in the case of after-acquired property, the insolvent is entirely barred from maintaining any

suit in respect of it and whether the receiver alone can sue. It is contended for the appellant that the Receiver alone can sue, because it is said, that

all the properties of the insolvent including his after-acquired property are vested in the Official Receiver by Section 28, Clauses 2 and 4 of the

Insolvency Act V of 1920. The argument is that, as the right to the property becomes vested in the Official Receiver, no right exists in the insolvent

himself and that, therefore, he is not entitled to maintain a suit to enforce any claim to recover such property; and it is said that, under the

Insolvency Act V of 1920, no difference is made between the after-acquired property of the insolvent and the property owned by him at the time

of the adjudication. The learned Vakil for the appellant relies on the case of Subbaraya Chettiar v. Papathi Ammal (1918) M.W.N. 289 as an

authority in his favour for maintaining the proposition that he has put forward. But that very case has distinguished an earlier case of Sriramulu

Naidu v. Andalammal 17 M.L.J. 14 which following the case of Fatimabibi v. Fatimahibi ILR 16 B. 462 , held that, in the case of after-acquired

property the insolvent has a right to maintain a suit, subject to the Official Receiver or Official Assignee intervening and that if the Official Receiver

or Official Assignee did not intervene, the insolvent was entitled to go on with the suit and that the principle to be deduced from the authorities that

had been cited was that the insolvent had ""a right against all the world except the Official Assignee."" That case has discussed the English decisions

on the point as well as the earlier Indian decisions and we can see no reason why we should not follow the principle laid down there as regards the

insolvent''s after-acquired property. This case, as already stated, has been distinguished in the Madras Weekly notes case which is a case

regarding the property owned by the insolvent at the time of the adjudication. Whether the case was rightly decided or not, we need not express

any opinion at present. However, it is clearly distinguishable from the present case on the very ground that the learned Judges distinguished it from

Sriramulu Naidu v. Andalammal 17 M.L.J. 14 . No authority has been cited to show that, as regards the after acquired property, the insolvent

cannot maintain a suit if the Official Receiver or Official Assignee does not interfere. We have thereforecome to the conclusion that the Subordinate

Judge was right in the view he took as regards this point, that is, as the property here is the after-acquired property, the insolvent was entitled to

continue the suit. The subordinate Judge has also dealt with another point, namely, that the share of a partner is not such a property as can be

attached under the CPC and is thus not such property as would vest in the Official Receiver. That position has not been supported by the

Respondent''s learned Vakil and we think it is not correct. In the view we have taken, it is not necessary to pursue that point. The appeal fails and

is dismissed with costs.