JUDGMENT Lindsay, J.
1. This is a reference by the Local Government under Rule 17 of the Rules and Orders relating to the Kumaun Division soliciting the opinion of the Court regarding two questions which were raised originally in a suit brought in the Court1 of the Assistant Collector, Kashipur, under the provisions of the Agra Tenancy Act.
2. The plaintiffs in that suit were Kunj Behari Lal and Har Kishen Das and the claim was for. recovery of profits due in respect of a certain share in a mahal, for the years 1324, 1325 and 1326 Fasli. According to the plaint the profits for these years became due on (the 1st of August in each of the years 1917, 1918 and 1919. There Were five defendant's to the suit, the first of whom Gobind Ram is the lambardar of the mahal. The fifth defendant was Gulab Singh, one of the co-sharers. The case for the plaintiffs was that on the 26th of July, 1920, they had taken from the second, third, fourth and fifth defendants an assignment of the profits for the years in suit. The fifth defendant' Gulab Singh had assigned his right to the profits for all the three years; the second, third and fourth defendants had assigned the profits for 1325 and 1326 Fasli only.
3. The principal defendant was the lambardar (defendant No. 1), and among various pleas which he raised in defence we have to notice only two which have given rise to the two questions submitted to our decision. In paragraph 8 of his written statement the lambardar alleged that on the date of the assignment in the plaintiffs' favour, Gulab Singh, the fifth defendant), was an insolvent and had no property or rights which he could transfer. It was pleaded, therefore, that the plaintiffs had no right to demand any share of profits on the basis of a transfer from Gulab Singh.
4. In the 17th paragraph of the written statement the lambardar claimed a set-off in virtue of a decree for arrears of rent obtained by him againsit the second, third and fourth defendants.
5. With respect to the first of those pleas the Assistant Collector was of opinion that the defence taken was a good one and that by reason of the provisions of Section 28 of the Provincial Insolvency Act of 1920, Gulab Singh, having been adjudicated insolvent, was not competent to transfer any property or right to property tb the plaintiffs.
6. The other plea, relating to the set-off, was rejected by him. He stated in his judgment that he could find no law in support of the defendants' claim to a set-off.
7. The case next came before the Deputy Commissioner sitting as District Judge in appeal. In his order of remand he decided that Gulab Singh, though insolvent, could, in a revenue court, maintain a suit for profits, and could, therefore, transfer his right to sue for those profits. This opinion was based upon the Full Bench decision of this Court in Kalka Das v. Gajju Singh (1921) I.L.R. 48 All. 510. The judgment of the first court upon this issue was, therefore, overruled.
8. The Deputy Commissioner (District Judge) agreed with the first court in holding that there was no legal sanction for the adjustment of the defendant's claim by way of set-off. The decision of the first appellate court on these two points has been affirmed in second appeal by the Commissioner of Kumaun as Judge of the High Court of Kumaun.
9. In the letter of reference received from the Local Government, the first question raised concerns the application of the Provincial Insolvency Act of 1920 to suits and proceedings under the Tenancy Act. It is stated in paragraph 2 of the Government's letter that the Government are advised that the ruling in Kalka Das v. Gajju Singh (1921) I.L.R. 43 All. 510 was not directly applicable to the case inasmuch as it merely laid down that the Insolvency Act is no bar to a suit for arrears of rent brought by a zamindar pending proceedings in insolvency (i.e., against the tenant). It is pointed out that the plea in the present case was that the property of the insolvent, Gulab Singh, having vested in the court or the receiver, he had no rights left which he could transfer to the plaintiffs. The argument before the courts below was not that the provisions of the Insolvency Act barred the suit but that the plaintiffs had acquired no valid title to the share of profits due to the insolvent.
10. As regards this question I am of opinion, for the reasons about to be given, that the view taken by both the lower appellate courts is erroneous and that the correct view was taken by the court of first instance. Before. proceeding to discuss this matter, I may observe that it is nowhere stated in the record on what date the order of adjudication was made against Gulab Singh.. From certain oral evidence given art the trial it would appear that the order was made about five years before the suit came to hearing. This is what Gulab Singh said himself. However, it seems clear on all hands that the adjudication order had been made prior to the date of the assignment, that is prior to the 26th of July, 1920.
11. Now there can be no dispute that Gulab Singh is a person amenable to the provisions of the Provincial Insolvency Act of 1920; and whether the adjudication order was made under that' Act or under the earlier Provincial Insolvency Act of 1907, the result was the same. All the property of the insolvent vested in the court or the receiver as soon as the order of adjudication was made (Cf. Section 28(2) of the Act of 1920 and Section 16(2) of the Act of 1907). It follows, therefore, that from the date of the order Gulab Singh ceased to be a co-sharer. This share was taken away from him and became vested in the court or the receiver. The profits of his share, which had already accrued due, were similarly divested and any profits accruing due after the date of the order of adjudication also became vested in the court or in the receiver (of. Section 28, Sub-section (4) of the Act of 1920 and Section 16, Sub-section (4) of the Act of 1907). It is clear, therefore, that on the date of the assignment of his share of the profits for the three years in suit, the insolvent had no interest) in these profits which he could in law transfer to the plaintiffs. For what reason then is it suggested or argued that the revenue court was debarred from taking cognizance of the provisions of the Insolvency Laws just mentioned? The argument is that the answer to this question is to be found in Section 193, Clause (a), of the Agra Tenancy Act which, it is said, forbids the entertainment of any plea based upon anything contained in the Provincial Insolvency Act and compels the revenue court to ignore the special provisions of that Act, quoted above, by which on the passing of the order of adjudication the property of the insolvent is divested and is transferred to the court or the receiver. In my opinion this argument is not sustainable. Section 193 of the Tenancy Act is to be found in chapter XIII of the Act which is a chapter relating to procedure. The section itself begins with the declaration that the provisions of the Code of Civil Procedure shall apply to the procedure in all suits and other proceedings under the Act so far as they are not inconsistent therewith and subject to certain modifications and additions which are then set out in the attached Clauses (a) to (m). We are concerned for the present with Clause (a) only, which enunciates that certain chapters and provisions of the Code of Civil Procedure, as it then stood (Act XIV of 1882), shall not apply "to any such suit or proceeding.'' Chapter XX of the- Civil Procedure Code, as it then was, contained the law relating to proceedings in insolvency. It was subsequently repealed by the Provincial Insolvency Act of 1907, which in its turn gave way tio the similar enactment of 1920. It may be taken, therefore, that the reference in Clause (a) of Section 193 of the Tenancy Act must now be treated as a reference to the Provincial Insolvency Act of 1920, and that in consequence the procedure in all suits and proceedings under the Tenancy Act is not governed by the provisions of the Insolvency Act. But we are not dealing here with a question of pure procedure but, with a question of substantive law. The defendant Gobind Ram, in raising the plea based upon Section 28 of the Provincial Insolvency Act, was not raising any question of procedure at all. He was not attacking the procedure of the plaintiffs in bringing or conducting the suit nor was he asking the revenue court to apply to the proceedings before it any rule of procedural law contained in the Insolvency Act. He was impugning the right of the plaintiffs to recover on the ground that they had taken nothing from Gulab Singh under his assignment in their favour and he based his plea on a provision of the Insolvency Act which enacts, not adjective but purely substantive law. Indeed, under the law of procedure which governs the conduct of business in the revenue courts, Gobind Ram was under a legal obligation to raise this plea.
12. Order VIII of the Civil Procedure Code which relates to "written statement and set-off" is in full force in the revenue courts except in so far as the provisions of Rule 6 of that order are modified by Clause (g) of Section 193 of the Tenancy Act which imposes a restriction on the, right of set-off as allowed by Rule 6. Rule 2 of Order VIII declares that the defendant must raise by his pleading all matters which show the suit not to be maintainable of that the transaction is either void or voidable in point of law. Well, that is exactly what Gobind Ram was doing when he pleaded that the transaction upon which the plaintiffs were relying for their right of suit was a void transaction. He was pleading a rule of substantive law contained in Section 28 of the Provincial Insolvency Act. He had every right to do so and indeed he was bound to do so, and for myself I can discover no reason why for anything contained in Section 193, the revenue court was prohibited from entertaining and deciding the question so raised by him. To read the section as enforcing such a prohibition, is, to my mind, sheer absurdity.
13. Section 193 of the Tenancy Act must be construed in the sense and for the purpose for which it was intended, namely, the regulation of procedure in the revenue courts and it cannot, in my opinion, be extended so as to withdraw from the cognizance and determination of those courts pleas which do not go to procedure but to substantive legal rights. With regard to the Full Bench decision relied upon by both the appellate courts below, Kalka Das v. Gajju Singh (1921) I.L.R. 43 All. 510, it, is to be observed that the only point which arose for decision was one of pure procedural law. The question was whether a landlord could, without the leave of the Insolvency Court, sue for arrears of rent a tenant against whom an order of adjudication had been made. Under an earlier decision of the Court, Raghubir Singh v. Ram Chandar (1911) I.L.R. 34 All. 121, it had been held that such a suit could not be brought without the leave of the Insolvency Court. The Full Bench decided, and, if I may say so, decided correctly that the view taken in the earlier case was wrong. Section 16(2) of the Provincial Insolvency Act, 1907, which was the enactment then under consideration, and which corresponds with Section 28(2) of the present Act, laid down that no suit or other legal proceeding can be commenced by a creditor against the insolvent without the leave of the court. That is a rule of pure procedure and must yield before the special provisions relating to procedure contained in Section 193 of the Tenancy Act. The question now before us, namely, whether Section 193 of that Act excludes the operation of substantive as well as adjective enactments in the insolvency law was not before the Full Bench, and if there are any observations in the judgment which might be treated as supporting the view now contended for, namely, that the law relating to the transfer of the property of the insolvent from the insolvent to the court or the receiver must be ignored by the revenue courts, then those observations were purely obiter and are not binding upon me.
14. My answer to the first of the questions propounded by the Local Government in this reference, therefore, is that the Full Bench ruling in Kalka Das v. Gajju Singh (1921) I.L.R. 43 All. 510 was not applicable to the facts of this case; that Gobind Ram was entitled to raise the plea based upon Section 28(2) of the Provincial Insolvency Act, 1920; that the revenue court was competent to entertain the plea and to decide the issue raised upon it and that the court of first instance rightly decided that the plaintiffs could not succeed upon the basis of the fraudulent assignment made in their favour by the insolvent Gulab Singh.
15. The second question we have to answer relates to the first defendant's claim to a set-off in respect of a certain decree for arrears of rent which he held against the second, third and fourth defendants.
16. There I think all the courts were right, though they give no reason for their opinion except by saying that they could find no legal sanction for the defendant's claim. For this part of the case we have to look to Clause (g) of Section 193 of the Tenancy Act which lays down that "no set-off shall be allowed in any suit under this Act except a sum due to the defendant on an unsatisfied decree under this Act or under any enactment hereby repealed ".
17. The clause does not say from whom the sum is due to the defendant, but presumably it is intended that it must be due from the plaintiffs. It could hardly mean that the money was due from a third party. The clause clearly cuts down the extent of the right of set-off allowed in Order VIII, Rule 6 of the Code of Civil Procedure. In other words, the defendant in a suit in a revenue court cannot claim set-off "of any ascertained sum of money legally recoverable from the plaintiff". He can only claim a set-off in respect of a sum owing to him under an unsatisfied decree, obviously a decree obtained against the plaintiffs. Now here Gobind Ram has no decree against the plaintiffs. He had never sued them at all. His decree had been got, not against the plaintiffs, but against three of the plaintiffs' assignors, namely, the second, third and fourth defendants. He could not legally recover the amount of his decree from these plaintiffs who are merely the assignees of the rights of these defendants to recover a share of the profits for the years 1325 and 1326F. It is quite clear; therefore, that under the law Gobind Ram was not entitled to the set-off he claimed.
18. I answer the second question accordingly.
19. As it is, I understand, the practice in these proceedings to make a recommendation regarding the award of costs in this Court, I am of opinion that in view of the decisions at which I have arrived, the parties should bear their own costs in this Court.
Sulaiman, J.
20. This is a reference by the Local Government under Rule 17 of the Rules and Orders relating to the Kumaun Division. The facts of this case are as follows:
21. The plaintiffs Kunj Behari Lal and Har Kishen Das are usufructuary mortgagees of a certain share in mahal Abi of mauza Babarkhera. They executed a lease of their mortgaged share in favour of Lal Singh, ancestor of defendants Nos. 2,3 and 4, and in favour of defendant No. 5 Gulab Singh. The lessees, not having paid their lease money and not having recovered their profits from the lambardar, executed two separate deeds of assignment of their shares of profits in July, 1920. Under one deed the defendants 2, 3 and 4 transferred their profits for 1325 and 1326 Fasli to the plaintiffs, and under the second deed the defendant No. 5, Gulab Singh, transferred his alleged share of profits for the years 1324, 1325 and 1326 Fasli.
22. It is an admitted fact that before these deeds of assignment were executed, Gulab Singh had been duly adjudicated an insolvent by the civil court. Unfortunately we have not been able to discover the exact date of the adjudication. Had it been the fact that Gulab Singh was adjudicated an insolvent before the profits for the years in dispute ever accrued, the case might have been simpler, but the arguments before us have proceeded on the assumption that Gulab Singh was adjudicated an insolvent after the profits had fallen due and before the deeds of assignment. And it is on this assumption that I propose to consider the questions involved in the reference.
23. The plaintiffs having obtained the deeds of assignment brought the suit, out of which this reference has arisen, for recovery of the profits for the years aforementioned as the assigns of the co-sharers, against the lambardar Gobind Ram, defendant No. 1. The main pleas on behalf of the contesting defendant were, firstly, that in view of Gulab Singh's adjudication the suit in part was not maintainable, and secondly, that a certain decree for arrears of rent, which the lambardar held against the plaintiffs' vendors and the defendants Nos. 2, 3 and 4, should be set-off.
24. The Assistant Collector, Mr. Zaka Ullah Khan, as the court of first instance, held that in view of Gulab Singh's insolvency, the sale of profits by him conferred no rights upon the transferees. He also held that there was no justification for allowing the set-off claimed. He, therefore, framed a decree on this basis. An appeal was preferred by the defendant to the District Judge and Deputy Commissioner of Kumaun, who agreed with the first court on the question of there being no legal sanction for allowing a set-off but came to a contrary conclusion on the other point, and held that the Provincial Insolvency Act did not and could not apply to the suit under the Tenancy Act, and that, therefore, Gulab Singh, though an insolvent, could maintain a suit for profits and so could his transferees. He accordingly sent down a certain issue for a finding to be returned within a fixed time, although in his order he called it "remanding the suit". On the findings being returned, the decree of the court of first instance was modified. On a further appeal before the Judge, Kumaun High Court, the learned Judge agreed with the conclusions of the Deputy Commissioner holding that no set-off was allowable under the Tenancy Act and that the fact of insolvency cannot affect the provisions of the Tenancy Act and that, therefore, the assignment of profits was valid. The Local Government not being satisfied with this decree, have referred the case to the High Court for opinion.
25. At the time of the arguments it was not clearly known whether Gulab Singh or the lessees were recorded as co-sharers in the revenue papers for the years in suit. Accordingly no question was raised at the bar as to there being any absolute presumption under Section 201 of the Agra Tenancy Act in favour of the proprietary right of Gulab Singh, nor was it argued that such a presumption can be extended in favour of his assigns.
26. Even assuming that Gulab Singh's name was recorded but that the names of the present plaintiffs were not recorded, I fail to see how any absolute presumption under Section 201, Clause (3) of the Agra Tenancy Act can arise. The word used in that clause is "plaintiff" and not "plaintiff's predecessors." When the plaintiffs themselves are not recorded as having the proprietary right entitling them to institute the suit, the defendant can ask the court either to refer the plaintiffs to the civil court or to try the question of title itself.
27. Chapter XIII of the Agra Tenancy Act deals with procedure. Section 193 in that chapter makes the provisions of the Code of Civil Procedure applicable to the procedure in all suits and other proceedings under that Act so far as they are not inconsistent therewith, subject to a few modifications and additions. Under Sub-clause (a) it is provided that Chapter XX of the old Code of Civil Procedure, Act XIV of 1882, which dealt with insolvent judgment-debtors, shall not apply to any such suit or proceeding. But, as I shall show later on, even this exception is not of general application. Chapter XX of the old Code was repealed by Act III of 1907, and Section 56 of the latter Act provided that where, in any enactment in force at the date of the commencement of the Act, reference is made to chapter XX of the Code of 1877 or of 1882 or to any section of either of these chapters, such a reference shall, so far as may be practicable, be construed as applying to this Act or to the corresponding section thereof When after this Act, the new Code of Civil Procedure (Act V of 1908) was enacted, the provisions relating to the insolvent judgment-debtors were naturally omitted. Since then the new Provincial Insolvency Act (Act Y of 1920) has come into force and Section 83 contains a similar provision as Section 56 of the previous Insolvency Act. The principal question in the present case, therefore, is as to how far the (sic) of the Insolvency Act can, if at all, be applicable to cases arising under the Tenancy Act.
28. Section 28(2) of Act V of 1920, which corresponds to Section 16(2) of Act III of 1907, provides that, on the making of an order of adjudication, the whole of the property of the insolvent shall vest in the court or in a receiver as therein provided, and shall become divisible among the creditors. The learned advocate for the defendant contends that this provision is one of substantive law and not of mere procedure, and that the Agra Tenancy Act does not prevent the applicability of a rule of substantive law. I am not prepared to say that the question can be disposed of on this short ground. Provisions regarding insolvent judgment-debtors were contained in the Civil Procedure Codes of 1877 and of 1882, both of which ostensibly embody rules of procedure. After all, the Insolvency Act merely regulates the method by which the claims of the creditors of an insolvent are to be satisfied. The object of the Act is to protect the insolvent from unnecessary harassment and imprisonment as well as to protect his creditor from being defrauded. It is true that property, by operation of law, vests in the court or the receiver, as the case may be, but it does only for the purpose of prescribing a mode by which the assets of the insolvent are to be divided among the creditors, and the balance, if any, is to go to the insolvent on his discharge. Section 28, Sub-clause (2), goes on to regulate the way in which creditors of the insolvent can pursue their remedy in respect of their debts. The rule contained in the latter portion of Sub-clause (2) is obviously one of procedure. I am therefore, not prepared to say that the first portion of Sub-clause (2) contains a substantive law and the second portion an adjective law.
29. On the other hand the learned advocate for the plaintiffs has relied strongly on the Full Bench case of this Court in Kalka Das v. Gajju Singh (1921) I.L.R. 43 All. 610, and, quoting remarks from page 512, has contended that "the Provincial Insolvency Act does not and cannot apply to any suit or proceeding under the Tenancy Act" and that "Section 16 of the Insolvency Act cannot and does not apply to such suits ". In the case before the Full Bench, a suit for arrears of rent of an occupancy holding had been brought by the zamindar against the tenant. While the suit was pending, the defendant was declared an insolvent. The plaintiff first impleaded the receiver but on objection being raised by him, his name was struck off. The defendant tenant, however, pleaded that the suit against him was not maintainable in view of the provisions of Section 16, Sub-clause (2), of Act III of 1907. The courts below, relying on the case of Raghubir Singh v. Ram Chandar (1911) I.L.R. 34 All. 121, acceded to that plea and dismissed the suit. The Full Bench held that the decision in Raghubir Singh v. Ram Chandar (1911) I.L.R. 34 All. 121 was incorrect and that the suit was maintainable. As the case had been disposed of on a preliminary ground, it was remanded for disposal on the merits. Without laying down the broad proposition that the Provincial Insolvency Act does not and cannot apply to any suit or proceeding under the Tenancy Act, the case could have been disposed of on the narrower ground that it was not open to the defendant to take shelter under Section 16, Sub-clause (2) of the Insolvency Act and plead that no creditor would have any remedy against him except with the leave of the insolvency court.
30. When a suit is brought by an insolvent plaintiff for arrears of profit, it is certainly open to the defendant to plead that the plaintiff has no locus standi to maintain the suit, as by reason of his insolvency he has lost all rights to the amount claimed. When such a plea is raised, the defendant is not asking the court to apply the Insolvency Act to the "suit" but to take account of the factum of the insolvency which took place before the suit was instituted. In an analogous case of an assignment under a registered document, when the defendant pleads that the plaintiff had transferred away his rights, can it be said that he is asking the revenue court to apply the Transfer of Property Act to the suit? Similarly if the plaintiff is an assignee of the insolvent, the revenue court in taking cognizance of the fact of insolvency is merely holding that the title-deed relied upon by the plaintiff was a mere nullity and passed no rights to him.
31. The present suit can be disposed of on even a simpler and clearer ground, though that was not pressed before us in argument. Section 193 (a) of the Tenancy Act laid down an exception to the applicability of the old Code of Civil Procedure, but that exception itself is inapplicable to the present case. The plaintiffs not being recorded proprietors and the defendant having pleaded that neither they nor their vendor had any proprietary right, it was the duty of the revenue court under Section 201(1) to proceed, mutatis mutandis, as directed in Section 199, provided that the party to be referred to the civil court should be the plaintiffs. Under Section 199, the court may either refer the party to the civil court, or determine the question of title itself. If the revenue court decides to determine such question of title itself, it shall follow the procedure laid down in the Code of Civil Procedure for the trial of suits, and "notwithstanding anything contained in Section 193 of the Act, all the provisions of the said Code shall apply to the trial of such question of title." It is, therefore, quite clear that before the Provincial Insolvency Act was enacted, chapter XX of the old Code of Civil Procedure was not inapplicable to a suit under chapter XI of the Tenancy Act, when the plaintiff was not a recorded proprietor and the defendant denied his right and when the revenue court decided to determine the question of title itself. It follows that the Provincial Insolvency Act would also not be inapplicable to such a case.
32. The second question raised in the reference is capable of being disposed of very briefly. Both the revenue courts have thought that the Tenancy Act itself disallows such a set-off. This is not quite accurate. Under Section 193(g) it is provided that no set-off shall be allowed in any suit under this Act except a sum due to the defendant on an unsatisfied decree under this Act or under any enactment hereby repealed. The defendant lambardar holds an unsatisfied decree and at first sight it looks as if his case comes within the exception. But Sub-clause (g) is only prohibitive and restrictive. In spite of a claim being allowable under the Code of Civil Procedure, the sub-clause provides that it shall not be allowed except when it is on account of an unsatisfied decree. This sub-clause does not mean that in the case of every unsatisfied decree a set-off is necessarily allowable. We have, therefore, to go back to the provisions of the Code of Civil Procedure and see whether the defendant's claim for the set-off could have been entertained. Under order 8, Rule 6 the defendant can claim to set-off against the plaintiffs' demand any ascertained sum of money legally recoverable by him from the plaintiff. The defendant, therefore, cannot claim a set-off of a decree against the plaintiffs' vendors. It has already been noted that the decree held by the lambardar for arrears of rents of which a set-off is claimed is against defendants 2, 3 and 4 only. Such a claim, therefore, could not have been entertained in the revenue court. The defendant's separate remedy is by way of execution of his decree against his judgment-debtors. I would, therefore, answer the first question in the affirmative and the second in the negative.
Kanhaiya Lal, J.
33. There are two questions raised by this reference. One of them is whether a co-sharer, who has been adjudicated an insolvent, has any right to assign the arrears of profits, which may fall due after his adjudication as an insolvent, or, in other words, whether the, assignee of the profits can sue the lambardar for the recovery of the same after such adjudication.
34. The plaintiff is an assignee from Gulab Singh of the arrears of profits due for 1324, 1325 and 1326 Fasli. The evidence of Gulab Singh and the replies to the interrogatories issued by the lambardar show that Gulab Singh was declared an insolvent sometime in 1323 Fasli. By virtue of Section 16(2) Clause (a) of Act III of 1907, corresponding with Section 28 of Act V of 1920, the property of Gulab Singh became vested in the receiver or the court when he was adjudicated an insolvent; and but for Section 201, Clause (3), of the U.P. Tenancy Act, which permits a conclusive presumption of title to be raised in favour of the plaintiff, if his name is recorded in the revenue papers, the insolvent would have had no rights left which could entitle him to claim the subsequent profits or to assign the same to any person.
35. Section 164 of the U.P, Tenancy Act (II of 1901) lays down that a co-sharer may sue the lambardar for his share of the profits of a mahal or of any part thereof in the revenue court. Section 166 declares that the word co-sharer in the above section shall be deemed to include a legal representative and an assign of such person. The arrears of profits due by a lambardar to a co-sharer do not change their character as such arrears of profits by reason of the death of the co-sharer or of an assignment thereof; and Section 167 forbids any court other than a court of revenue from taking cognizance of any dispute or matter in respect of which a suit for profits might be brought in the revenue court. The arrears assigned cannot, therefore, be regarded as a debt recoverable in the civil court; and if in spite of the adjudication of insolvency, the effect of which was to divest the insolvent of his proprietary rights for the time being, the insolvent continued to be the recorded co-sharer, as the copy of the jamabandi for 1324 Fasli filed shows, his status as a co-sharer and his right to sell the arrears as such co-sharer must be recognized.
36. It is obvious that had the suit been brought by Gulab Singh, it could not have been contested by the receiver, if any was appointed, for it is not suggested that he had obtained mutation of names in his favour. A co-sharer, whose name continues to be recorded in the revenue papers despite his adjudication as an insolvent, has unquestionably a right to sue for the arrears of profits due on account of his share; and if his right to sue and recover such arrears cannot be challenged by any person, he has also a right to sell the said arrears, for the right to sell is only a necessary corollary of the right to sue. If an actionable claim is good and valid, it can be sold, unless it is in its nature non-transferable. If a right to sue subsists, a right to sell subsists too. Section 201, Clause (3), of the N.W.P. Tenancy Act may in terms be inapplicable to the present plaintiff, but it can be used to determine the antecedent title of Gulab Singh or his right to sell the arrears due to him.
37. Section 193 of the U.P. Tenancy Act (II of 1901), moreover, lays down that the procedure in all suits and other proceedings under that Act shall, except as otherwise provided, be regulated by the provisions of the Code of Civil Procedure, excluding among other things chapter XX and Section 370 of Chapter XXI of the Code, which, it declares, shall not apply to any such suit or proceeding. Chapter XX of the Civil Procedure Code then in force laid down the procedure regulating the adjudication of insolvency and the machinery to be employed for the realization of the assets of the insolvent for distribution among his creditors. That chapter was replaced by Act III of 1907, which has since been superseded by Act V of 1920. Section 370 of the old Code of Civil Procedure corresponded with Order 22 Rule 8 of the new Code and empowered the receiver to elect whether he would continue a suit filed by an insolvent before he was so adjudicated. By Section 56, Clause (27) of Act III of 1907 and Section 83 Clause (2) of Act V of 1920 it was provided that all references to the repealed provision shall be deemed to have been made to the corresponding provisions of the Act by which they were repealed. These provisions cannot, therefore, apply to suits and proceedings under the N.W.P. Tenancy Act, except those referred to in Section 199, Clause (3), and Section 201, Clause (1), of that Act.
38. The law of insolvency is mainly designed for the protection of creditors and the relief of debtors. The receiver is only an officer appointed by the court to take charge of the assets of the insolvent for the time being and to hold the same for the benefit of the scheduled creditors till their debts are discharged. As in the case of any property attached by a court in execution of a decree, the court or the receiver is a temporary custodian of the property of the insolvent for a specific purpose, such rights as accrue to an attaching, court or to a receiver are rights which the court or receiver acquires by operation of law in enforcement of the procedure laid down for the sale of the property attached or available for sale.
39. By Section 193(a) of the U.P. Tenancy Act the whole of the insolvency law embodied in the Code of Civil Procedure or the corresponding Acts of the Legislature, has, however, been declared to be inapplicable to suits and proceedings under the U.P. Tenancy Act other than those referred to in Section 199, Clause (b) and Section 201, Clause (1), of the Act, and a receiver is not even allowed to elect whether he is to continue a suit fir proceeding so instituted by an insolvent prior to his adjudication as such. The result is that he cannot claim to be substituted for an insolvent in such a pending suit or proceeding, or a suit or proceeding of that kind which may be subsequently filed by or against the insolvent in the revenue court under that Act, or oust him from the rights and status conceded to him by the Act, except by getting his name substituted in the revenue papers for the time being in the place of the person adjudicated an insolvent, under the U.P. Land Revenue Act (III of 1901), where such a substitution is legally permissible.
40. In Kalka Das v. Gajju Singh (1921) I.L.R. 43 All. 510, where an occupancy tenant was declared an insolvent and a suit was filed for arrears of rent in respect of that holding against him and the receiver, it was held that an occupancy tenant being outside the provisions of the Provincial Insolvency Act, that Act was no bar to a suit for arrears of rent brought by the zamindar pending proceedings in insolvency, and it was pointed; out that under Section 56, Clause (2), read with Section 193, Clause (a), of the U.P. Tenancy Act the Provincial Insolvency Act did not and could not apply to any suit or proceeding trader the Tenancy Act. The previous decision in Raghubir Singh v. Ram Chandra (1911) I.L.R. 84 All. 121, was overruled. In Parbati v. Raja Shiam Rikh. (1922) I.L.R. 44 All. 296 a similar view was taken. The substitution of the receiver for the insolvent co-sharer for the purpose of enabling the former to realize the assets and pay the debts is a part of the machinery provided to secure a discharge of his liabilities, and though the receiver acquires the rights of the insolvent for the time being for a specific purpose, the devolution is only a part of the procedure designed for realizing the object in view. In excluding the law of insolvency from application to the revenue court in suits and proceedings under the U.P. Tenancy Act, the legislature probably intended that the rents or profits due by or to a co-sharer shall be recovered in the manner laid down in the U.P. Tenancy Act and in no case in the manner laid down by the insolvency law, though the debtor liable for such rents or profits may have been declared an insolvent. It is also noteworthy that by reason of Section 167 of the U.P. Tenancy Act, such rents or profits are not debts provable under the Provincial Insolvency Act and no court other than a court of revenue can take cognizance of the same, No question of the plaintiff's proprietary title here arises. Owing to the continued entry of the name of Gulab Singh in the revenue papers, the right of Gulab Singh to recover the profits subsists and there is nothing to prevent its sale to the plaintiff.
41. On either ground, therefore, I am of opinion that the existence of the receiver, whose name is not entered in the revenue papers, cannot be treated as a bar to the entertainment of the suit.
42. On the other question, namely, whether an, unsatisfied decree for arrears of rent due to the lambardar by a co-sharer can be set-off against the arrears of profits assigned by the latter to a third person, I agree that such a set-off is not permissible under Section 193, Clause (g) of the U.P. Tenancy Act, except where the decree sought to be set-off is due to and the debt sought to be recovered is due by the same persons.
43. In view of the circumstances, I concur in the order proposed to be passed about the costs of this reference.
44. The opinion of the Court with regard to the first question raised in this letter of reference from the Local Government is that it was open to the defendant lambardar to raise the question of want of title in the plaintiffs on the basis of the Insolvency Act (Act V of 1920). With regard to the second question the opinion of the Court is that the defendant lambardar was not entitled to claim a set-off in respect of his decree for arrears of rent obtained against the defendants Nos. 2, 3 and 4. We are further of opinion that the parties should bear their costs in this Court.