1902 (5) TMI 1 - HC - Indian Laws

Summary

Issues:
1. Priority of Official Assignee over judgment-creditor in case of property attachment pre-vesting order under Insolvency Act.

Analysis:
The judgment deals with the issue of whether a vesting order under the Insolvency Act gives the Official Assignee priority over a judgment-creditor concerning property attached before the order. The Court refers to conflicting opinions in previous cases and the impact of property attachment by a judgment-creditor. The key question is whether the judgment-creditor acquires any charge or lien on the attached property through attachment.

The Court discusses precedents such as the Full Bench case of Anand Chandra Pal v. Panchilal Sarma, which held that an attaching judgment-creditor had a charge or lien on the property. However, another case, Soobul Chunder Law v. Russik Lall Mitter, stated that attachment does not create a charge on the property. The Court also cites the Privy Council case of Moti Lal v. Karrabuldin, emphasizing that attachment only prevents alienation and does not confer title.

The judgment highlights the change in the law from the Code of 1859 to the present Code, specifically Section 270 and Section 295, governing the distribution of proceeds from the sale of attached property. Under the current law, there is a rateable distribution of proceeds among decree-holders. The Court emphasizes that the attaching creditor does not have priority over the Official Assignee based on the current legal framework.

The judges concur that the attaching creditor does not acquire any title or charge on the property through attachment. They emphasize that Section 295 of the Code does not allow the judgment-creditor to claim priority over the Official Assignee, who represents all creditors. The judgment concludes that the judgment-creditor has no priority over the Official Assignee concerning the property attached before the vesting order.

In conclusion, the Court unanimously holds that the judgment-creditor does not have priority over the Official Assignee in the matter of property attachment pre-vesting order under the Insolvency Act. The judgment clarifies the legal position regarding the rights of judgment-creditors and the Official Assignee in insolvency proceedings, emphasizing the current statutory provisions governing the distribution of proceeds among creditors.