1961 (3) TMI 112 - SC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction and exercise of jurisdiction by the Custodian.
2. Dissolution of partnership and declaration of evacuee property.
3. Bona fides of the transactions and deeds.
4. Validity of the Custodian's order regarding the properties.

Issue-wise Detailed Analysis:

1. Jurisdiction and Exercise of Jurisdiction by the Custodian:
The appellant contended that the Custodian-General acted without jurisdiction or irregularly in exercising his jurisdiction by interfering with the Assistant Custodian's order without any appeal being preferred. The court clarified that the Custodian exercised his revisional jurisdiction under Section 26 of the Administration of Evacuee Property Act, 1950, despite the absence of a formal notice. The court emphasized that the proviso to Section 26(1) requires a reasonable opportunity of being heard, which was satisfied in this case as the appellant's counsel was heard fully. The court held that the Custodian's omission to serve a formal notice was not fatal as the appellant had a reasonable opportunity to be heard.

2. Dissolution of Partnership and Declaration of Evacuee Property:
The appellant argued that the partnership stood dissolved from November 2, 1948, under Section 43 of the Indian Partnership Act, and thus the Custodian had no jurisdiction to declare the business as evacuee property. The court noted that the partnership was a partnership-at-will and the deed of dissolution dated August 12, 1949, was concluded to safeguard properties. The court held that the firm was dissolved on August 12, 1949, and the Custodian's declaration was intended to mean that the property remaining in Abdulla Bhai on the dissolution was evacuee property.

3. Bona Fides of the Transactions and Deeds:
The appellant contended that the transactions evidenced by the sale deed and the dissolution deed were part of winding up the dissolved partnership. The court noted that the Custodian found the deeds to be without good faith and held that the sale deed executed before the actual dissolution was not in the course of winding up. The court affirmed that the Custodian was not bound by the statements in the deed of dissolution regarding the settlement of accounts and had all the rights Abdulla had under the Partnership Act.

4. Validity of the Custodian's Order Regarding the Properties:
The appellant argued that the Custodian acted illegally by ordering that the entire properties in Schedules A and B be treated as evacuee properties. The court clarified that only the 8 annas share of Abdulla in the properties should be treated as evacuee properties, in line with the amended definition of evacuee property under the Administration of Evacuee Property Act. The court dismissed the appeal with this clarification.

Separate Judgment for Civil Appeal No. 353 of 1958:
In the appeal concerning properties in Madras, the appellant's case was similar to the Orissa properties, asserting that the dissolution of the firm took place in November 1948, and the final settlement was brought about by deeds in August 1949. The Assistant Custodian confirmed the transfer of properties, but the Custodian, upon revisiting the case, found the transactions not bona fide and set aside the Assistant Custodian's order. The appellant contended that the notice did not mention the business, but the court found that the appellant had a reasonable opportunity to be heard regarding the bona fides of the transactions. The court upheld the Custodian's order, dismissing the appeal with costs.

Conclusion:
Both appeals were dismissed, with the court upholding the Custodian's orders and clarifying that only Abdulla's 8 annas share in the properties should be treated as evacuee properties. The court emphasized the importance of reasonable opportunity of being heard and the bona fides of transactions in determining the validity of property transfers.