PARLIAMENTARY DEBATES 41
Now what happened was this. After that decision of the Privy Council the courts in India had occasions to interpret another Act which is called the Provincial Insolvency Act. As lawyer members of this House will remember, we have two separate statues dealing with insolvency,—one which deals with insolvency taking place within the towns, and the other with those in the mofussil. The Provincial Insolvency Act does not unfortunately contain a provision such as section 52 which finds a place in the Presidency Towns Insolvency Act. Consequently when a similar question arose before the courts, namely, whether the property which a Hindu father could claim under his right or power to sell his son’s interest for the payment of his own debts could be interpreted as property and become vested in the Official Assignee, only that was property within the meaning of section 2( e ). Unfortunately what has happened is that different courts have interpreted this section 2( e ) of the Provincial Insolvency Act in different ways. It would be interesting to note that the Bombay High Court has held that though the property does not vest power is not property and therefore, it does vest; the Patna High Court also follows the Bombay High Court and so does the Allahabad and Nagpur High Courts. On the other hand when you come to Madras, one Bench of the Madras High Court has held that the property vests, while another Bench has held that it does not vest. And the same is the case in Calcutta where one Bench has held that the property does vest and another Bench has held that it does not vest.
Now I think this matter should be put right. The Madras High Court in one of its decisions clearly gave an indication to the Government of India that it was high time that legislation was brought in to set aside this discrepancy in the decisions of the different High Courts. Unfortunately during the war such a piece of legislation could not be brought in because there was not enough time. Therefore, it is to set right this discrepancy and division of opinion in the different High Courts that this measure has been brought in. All that this measure does is to reproduce bodily section 52 from the Presidency Towns Insolvency Act and makes it a part of the Provinvcial Towns Insolvency Act as section 50-A. There is nothing more that the Bill seeks to do.