Foreign insolvency and Indian immovable property: later attachment cannot prevail once adjudication has taken effect.

A foreign insolvency adjudication in Penang was recognised under private international law as affecting the insolvent's immovable property in British India from the date of adjudication. The court held that the foreign bankruptcy ordinance did not operate extra territorially to vest Indian immovable property by its own force, but later attachment and execution in India could not prevail because the property had already become subject to the foreign insolvency process, subject to rights existing under the lex situs at the relevant time. Section 64 CPC did not assist, as the transfer was not a private transfer in the ordinary sense. The execution and attachment proceedings were stayed.

---

---

Issues: Whether, on a foreign insolvency adjudication made in Penang, the insolvent's immovable property in British India could be treated as available to the foreign official assignee from the date of adjudication so as to defeat an attachment and execution commenced in India after that date.

Analysis: The foreign bankruptcy ordinance could not, by its own force, operate extra territorially so as to vest immovable property situated in British India. The better basis for recognition was the rule of private international law and the duty of courts acting in aid of a foreign insolvency to avoid interference with a pending process of universal distribution, subject to rights existing at the relevant time under the lex situs. The decisive point was the date of adjudication. As on that date, the insolvent's power of disposal over the Indian property was already affected in favour of the foreign insolvency, and the later attachment could not prevail. Section 64 of the Civil Procedure Code did not assist because the relevant transfer was not a private transfer in the ordinary sense, but the property became subject to the foreign insolvency by reason of the adjudication and the subsequent conveyance merely perfected that position.

Conclusion: The execution and attachment proceedings were liable to be stayed, and the appeal failed.

Ratio Decidendi: In a foreign insolvency, immovable property in British India is to be regarded as subject to the foreign adjudication from the date of adjudication for the purpose of resisting later attachments, where recognition is consistent with private international law and existing local rights.

---