Case: Mukti Lal Agarwala Vs. Trustees Of The Provident Fund Ofthe Tin Plate Co. Of Ind

forfeiture and to the satisfaction of the liens, the deposit with interest was repayable to the member on his ceasing from any cause to be a member. The facts were, therefore, very different. Anandrao v. Vishwanath Watuji, 1944 Nag 144 (AIR V. 31) (I) is again a case where the money ceased to belong to the employee and the title was in the trustees. Reffering to a Karachi case reported in - Ismail Jakaria and Co. v. Burmah-Shell Provident Trust Ltd., 1942 Sind 47 (AIR V. 29) (J), Bose J. distinguished it one the ground that there the money was not vested in the trustees but was only handed over to them for the purposes of management, which was not the case before him.19. The learned counsel for the respondents strongly relied on - Biswa Nath Sao v. The Official Receiver, 1937 Pat 185 (AIR V. 14) (FB) (K) and argued that there can be no property within the meaning of the Insolvency Act unless the insolvent had a present absolute power of disposal over the same but the decision which is that of a Full Bench and which interpreted the decision of the Privy Council in - Sat Narain v. behari Lal, 1925 PC 18 (AIR V. 12) (L) does not support any such position; all that was held was that on the insolvency of a father, his power to sell the shares of his sons in the joint family property to discharge the pious obligation vests in the Official Receiver, though the shares themselves do not so vest.20. Sufficient has been stated above to show that not withstanding the rules of the Fund in the present case, the subscribers have an interest in the moneys which can vest in the Official Receiver on their adjudication. Even if we regard the deed creating the fund as a trust deed, notwithstanding that, no ownership has been transferred to the trustees and all that they have got is the right of the management and control, the subscribers, who joined the fund have undoubtedly got a beneficial interest which will vest in the Official Receiver as property liable to attachment and sale under section 60 which uses the language "whether the same be held in the name of the judgement-debtor or by another person in interest for him or in his behalf.21.The learned Judges of the High Court held that the property mentioned in the Insolvency Act must be such that the insolvent has an absolute and unconditional present disposing power over the same. With great respect, this, however, does not seem to be a correct interpretation. The word property is used in the widest possible sense which includes even property which may belong to or is vested in another but over which the insolvent has a disposing power which he may exercise for his own benefit; and as pointed out already this part of the definition has reference obviously to powers of appointment and the power of a Hindu father who is the managing member of a joint family. The fact that on the date of the adjudication the insolvent could not transfer the property does not militate against the view that he has a vested interest in the same. Reference was made to S. 56 (3) of the Provincial Insolvency Act which provides that "Where the Court appoints a receiver, it may remove the person in whose possession or custody any such property as aforesaid is from the possession or custody thereof: Provided that nothing in this section shall be deemed to authorise the court to remove from the possession or custody of property any person whom the insolvent has not a present right so to remove". This has no relevancy to the point at issue. Whenever possession and custody could be taken by the Receiver, the person in whose possession and custody the property is can be evicted. If possession or custody could not be taken, still the right of the insolvent will vest in the Official Receiver.22. Mention has been made of three accounts in the Fund called A, B and C; the first represents monies contributed by the subscriber, the second consists of monies paid by the Company and the third represents what may be roughly described as bonus which represents deferred wages. The learned counsel for the appellant confined the relief he wanted to the amounts standing to the credit of each subscriber in his A and C Accounts and conceded that the B Account monies would stand on a different footing. In fact, even in the Insolvency Court the creditor concerned himself only with the A and C Accounts.23. Mr. Isaacs contended at first that he was entitled to an order that the monies in the A and C Accounts should be brought to the Insolvency Court but later he abandoned this contention. For the respondents, it was urged that under S. 10 of the Employees Provident Funds Act, 1952, which came into force after these proceedings were instituted, there could be no attachment. This again is a question which is outside the scope of the present proceedings. Once it is held that the right, title and interest of the insolvents in the A and C Accounts with the Fund vest in the Official Receiver, it is for him under the directions of the Insolvency Court to take steps to realize the same, in whatever manner the law allow him to do.24. The learned counsel for respondents handed to us a paper showing which of the respondents was still in service and which have been discharged, their dates of appointments and of joining the posts. Mohibulla, Anjab Alli and Hasimulla, respondents insolvents in Civil Appeal No. 124, Civil Appeal No. 127 and Civil Appeal No. 126, have been shown as discharged from service. A.M. Joseph, Rasid Alli alias Tasim Alli, and Baldey Singh, respondents in Civil Appeals 135, 125 and 124, joined the Fund in 1933, 1932 and 1936 respectively and are still in service.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]14.It is reasonably clear from these rules that a subscriber has a present interest in the Fund though the moneys may become payable to him, or his nominee or heirs only in the future. Even where there is a declaration about the nominee who is to receive payment after the subscribers death, the fund would still be the property of the subscriber in the hands of the nominee for the satisfaction of his debts, as there is no present gift to take effect immediately.15.It is not easy to see how it could be maintained that the subscribers have no right, title or interest in the fund, or that such interest as they may possess is dependent upon a possible contingency which may or may not occur. The amount standing to the credit of a subscriber even if payable in future would be a debt due by the Company to him within the meaning of S. 60 of the Code and hence liable to attachment andthere is no gift over on the cesser of the donees interest, the property will revert to the donee and will vest in the Official Receiver on the donees insolvency. But a person cannot enter into any arrangement or agreement by which his own title will cease in the event of bankruptcy, for it would then be a fraud perpetrated on the Insolvencythe decision which is that of a Full Bench and which interpreted the decision of the Privy Council in - Sat Narain v. behari Lal, 1925 PC 18   (AIR V. 12) (L) does not support any such position; all that was held was that on the insolvency of a father, his power to sell the shares of his sons in the joint family property to discharge the pious obligation vests in the Official Receiver, though the shares themselves do not sohas been stated above to show that not withstanding the rules of the Fund in the present case, the subscribers have an interest in the moneys which can vest in the Official Receiver on their adjudication. Even if we regard the deed creating the fund as a trust deed, notwithstanding that, no ownership has been transferred to the trustees and all that they have got is the right of the management and control, the subscribers, who joined the fund have undoubtedly got a beneficial interest which will vest in the Official Receiver as property liable to attachment and sale under section 60 which uses the language "whether the same be held in the name of the judgement-debtor or by another person in interest for him or in his behalf.21.The learned Judges of the High Court held that the property mentioned in the Insolvency Act must be such that the insolvent has an absolute and unconditional present disposing power over the same. With great respect, this, however, does not seem to be a correct interpretation. The word property is used in the widest possible sense which includes even property which may belong to or is vested in another but over which the insolvent has a disposing power which he may exercise for his own benefit; and as pointed out already this part of the definition has reference obviously to powers of appointment and the power of a Hindu father who is the managing member of a jointhas no relevancy to the point at issue. Whenever possession and custody could be taken by the Receiver, the person in whose possession and custody the property is can be evicted. If possession or custody could not be taken, still the right of the insolvent will vest in the Officialfact, even in the Insolvency Court the creditor concerned himself only with the A and Cagain is a question which is outside the scope of the present proceedings. Once it is held that the right, title and interest of the insolvents in the A and C Accounts with the Fund vest in the Official Receiver, it is for him under the directions of the Insolvency Court to take steps to realize the same, in whatever manner the law allow him toAnjab Alli and Hasimulla, respondents insolvents in Civil Appeal No. 124, Civil Appeal No. 127 and Civil Appeal No. 126, have been shown as discharged from service. A.M. Joseph, Rasid Alli alias Tasim Alli, and Baldey Singh, respondents in Civil Appeals 135, 125 and 124, joined the Fund in 1933, 1932 and 1936 respectively and are still in service.