TMI Blog1964 (9) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... at Delhi as a jeweler in the name of Sardar Singh Daulat Ram. He had a Muslim mistress and it appears that by reason of his affection for the said mistress he migrated to Pakistan in the first week of February, 1950. He was possessed of extensive properties, both movable and immovable, but apparently, he was involved in financial difficulties about that time, and so, before he migrated to Pakistan he transferred his 1/2 share in his ancestral house in Baidwara Street, Delhi for a consideration of ₹ 26,000. On the 14th March, 1950, Nanak Chand and certain other persons claiming to be his creditors, filed a petition of insolvency against the firm of Daulat Ram and against Daulat Ram himself. On June 17, 1950, both the firm and Daulat Ram were adjudicated insolvents and the respondent, the Official Receiver, was appointed the Receiver of the estate of the insolvents. In August, 1951, the Official Receiver wanted to sell some items of the insolvents' property and the sale was fixed to be held on the 18th August, 1951. Two days prior thereto, however, the Assistant Custodian of Evacuee Property issued a notice under s. 7(1) of the Act of Daulat Ram and other interested persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed to have taken place as from February 7 or 8, 1950. The appellants concede that the order of adjudication made against Daulat Ram on the June 17, 1950 would, by virtue of the provisions contained in s. 28(7) of the Provincial Insolvency Act relate back to the date of the presentation of the petition made by his creditors in that behalf, and that takes us to March 14, 1950. Thus, one of the arguments which was urged before the High Court on behalf of the appellants and which has been placed before us is that though both the declaration of the evacuee property and the adjudication as to Daulat Ram's insolvency have retrospective operation, the said retrospective operation places the declaration made under s. 7(1) earlier than the date of adjudication, and so, the declaration made under s. 7(1) must prevail over the adjudication of Daulat Ram as insolvent. If that be the true position, the fact that the property vested in the Official Receiver under s. 28 of the Provincial insolvency Act will not matter, because by virtue of the declaration made, the property, of the evacuee must be deemed to have vested in the Custodian on an earlier date and that gives priority top the title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other law for the time being in force or in any instrument having effect by virtue of any such law. The suggestion is that if the material provisions of section 27 and 28 of the Provincial Insolvency Act on which the respondent's case about the retrospective vesting of the insolvents' property in the Official Received is based, are inconsistent with s. 4(1) of the Act, section 4(1) prescribes that the relevant provisions of this Act will prevail over the said provision of the Provincial Insolvency Act. This argument is misconceived. The relevant provisions of the two sections of the Provincial Insolvency Act do not disclose anything inconsistent with the relevant provisions of the Act, and so, there is no occasion to invoke the provisions of s. 4(1) in order to establish the conclusion that the provisions of the Act will prevail over the said provisions of the Insolvency Act. Section 28(7) read with s. 27 of the Insolvency Act merely provides that when an order of adjudication is made under s. 27, the insolvent's property vests in the Official Receiver as from the date of the presentation of the petition made against the debtor. Neither s. 7(1), nor s. 8 of the Act ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property, the property must be evacuee property; and if that is so in the present case, the property was not evacuee property at the relevant time, and so, the declaration is bad and inoperative in law. 9. There is considerable force in this argument. The rules of grammar may suggest that when the section says that the property is evacuee property, it prima facie indicates that the property should bear that character at the rime when the opinion is formed. But Mr. Ganapathy Iyer for the appellants has strenuously contended that the construction of s. 7(1) should not be based solely or primarily on the mechanical application of the rules of grammar. He urges that the construction for which Mr. Pathak contents and which, in substance, has been accepted by the High Court, would lead to very anomalous results; and his arguments is that it is open to the Court to take into account the obvious aim and object of the statutory provision when attempting the task of construing its words. If it appears that the obvious aim and object of the statutory provisions would be frustrated by accepting the literal construction suggested by the respondent, then it may be open to the Court to enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vesting of the said properties in the Custodian under s. 8(1) of the Act. 11. Similarly, s. 7(1A) and s. 7(2) deal with other cases of transfer and make them ineffective for the purpose of s. 7(1). Section 7(1A) provides that if during the pendency of any proceedings under sub-section (1) any person interested in the property dies, the proceedings shall, unless the Custodian otherwise directs, be continued and disposed of as if such person were alive. This clause was added by section 5 of Act 42 of 1954 with retrospective effect to meet the problem raised by this Court in Ebrahim Aboobaker and Anr. v. Tek Chand Dolwani. [1953]4SCR691 In that case, this Court held that where a Mohammedan against whom proceedings are commenced under the Act for declaring him an evacuee and his properties evacuee properties, dies during the pendency of the proceedings, he cannot be declared an evacuee after his death, and his properties which on his death vest in his heirs under the Mohammedan law cannot be declared evacuee properties. This decision was based substantially on the ground that the material provisions of s. 7(1) require an enquiry to be made into the character of the properties befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case ([1953] S.C.R. 691). 14. Incidentally, it would be pertinent to observe that the High Court thought that this decision afforded substantial guidance in determining the question of construction with which it was concerned in the present appeal. After quoting the material observations made by Ghulam Hasan J. in Ebrahim Aboobaker's case [1953]4SCR691 , the High Court has observed that in view of the law laid down by their Lordships of the Supreme Court it must be held that as soon as the order of adjudication was made on the 17th June, 1950, the property of the insolvent vested in the Official Receiver for the purposes mentioned in the Provincial Insolvency Act, and so, it was not open to the Custodian to issue a declaration under s. 7(1) of the Act. With respect, we are unable to see how the decision of the this Court in Ebrahim Aboobaker's case [1953]4SCR691 can have any relevance or materiality in construing s. 7(1) of the Act for the purpose of deciding the dispute between the parties before us. The main test on which the validity of the proceedings taken against Ebrahim Aboobaker was successfully challenged was that the alleged evacuee having died, a proper and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows that wherever properties have been transferred by evacuees after their migration and before the proceedings under s. 7(1) commenced, they would by beyond the reach of the Act. In our opinion, it is very difficult, if not impossible, to assume that such could have been the intention of the legislature. The risk posed by transfers which intending evacuees were naturally inclined to make save their fortunes was so grave at the relevant time that the legislature has taken the precaution of making appropriate provisions to save the economy of the country; and so, it seems to us that the consequence which inevitably flows from the adoption of the construction for which Mr. Pathak contends is so patently inconsistent with the clear and unambiguous object of the Act that it would not be reasonable to accept that construction. In our opinion, the construction of s. 7(1) presents a problem which can be resolved not merely by the adoption of the mechanical rule of construction based on grammar, but by a liberal construction which takes into account the bearing had purport of the relevant words used in s. 7(1), considered in the light of the other relevant provisions of the Act and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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