This topic can be dealt with under the following three heads:
(a) Insolvency of the manager, not being the father of the other coparceners.
ADVERTISEMENTS:
(b) Insolvency of the father.
(c) Insolvency of other coparceners.
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(a) Insolvency of the manager, not being the father:
On the insolvency of the manager of a joint Hindu family, not being the father of the other coparceners, the separate property of the insolvent manager and his undivided interest in the joint family property vest in the Official Assignee or Official Receiver, as the case may be.
The power of the manager to sell or mortgage the interests of the other coparceners for the satisfaction of joint family debts vests in the Official Assignee under S. 52(2)(b) of the Presidency Towns Insolvency Act (which is an Act that governs insolvency in the former Presidency Towns of India). However, as there is no corresponding provision under the Provisional Insolvency Act (which applies to insolvencies outside the former Presidency Towns), such a power of the manager does not vest in the Official Receiver under the Provincial Insolvency Act.
(b) Insolvency of the father:
ADVERTISEMENTS:
Where the manager of the family is the father, different considerations apply, because the father has the right to sell joint family property (including the interests of his sons therein), not only for family debts, but also for his personal antecedent debts which are not tainted with immorality.
Hence, such a power of the father vests in the Official Assignee or Receiver, as the case may be. This does not mean, however, that the son’s share as such vests in the Official Assignee or Receiver. Thus, this power vests subject to all the limitations under which it could be exercised by the father himself. The Official Assignee or Receiver stands, so to say, in the shoes of the father, and has no greater power than what the father had. Thus, after a partition, the Official Assignee or Receiver cannot sell the son’s interest, as the father himself could not have done so.
As the interest of a son does not vest in the Official Assignee or Receiver, it may be attached, even after the insolvency of the father, by a creditor of the father, in execution of a decree obtained by him against the father, unless of course, it had previously been sold by the Official Assignee or Receiver.
(c) Insolvency of other coparceners:
On the insolvency of any other coparcener, his separate property, as well as his interest in the joint family property, vests in the Official Assignee or Receiver, and both are available for the benefit of his personal creditors. But the creditors of the insolvent member’s father are not entitled to any priority over those of the insolvent himself.