Transfer of Coparcenary Interest by Operation of Law on Insolvency

When a coparcener becomes insolvent, his coparcenary interest (along with his separate property) vests by operation of law in the Official Assignee under the Presidency Towns Insolvency Act, 1909 or, as the case may be in the Official Receiver under the Provincial Insolvency Act, 1920. The share of the coparcener is to be ascertained in a suit for general partition.

The benefit or disadvantage caused by deaths and births of coparceners endures ‘to the benefit of the Official Assignee or Official Receiver. The Presidency Towns Insolvency Act applies to the three Presidency towns of Madras, Bombay and Calcutta while the Provincial Insolvency Act applies to the mofussil.

When the coparcener who has become insolvent is the Manager of a Joint family, what vests in the Official Assignee or Official Receiver is still only the interest of the coparcener who has become insolvent.

coparcener

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Where, however, the insolvent coparcener is the father (whether or not he is Manager), what vests in the Official Assignee or Official Receiver is not only the interest of the coparcener but also his power to alienate the share of the sons for payment of his non-avyavaharika debts.

In Cheruvu Nageswaraswami v. Raja Vadrevu Viswasundara Rao, AIR 1953 SC 370, the appellant before the Supreme Court was the purchaser from the Official Receiver. It was held that at the Official Receiver’s sale not only the interest of the insolvent but also the share of his sons passed to the purchaser as the debt for payment of which the property was sold by the Official Receiver was one for payment of which the insolvent himself could have sold his son’s interest in the coparcenary property.

Submitted by : Professor Poorvi, Category : Knowledge