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Sivasami Odayar Vs. C.R. Subramania Aiyar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1932Mad95; 136Ind.Cas.338; (1932)62MLJ68
AppellantSivasami Odayar
RespondentC.R. Subramania Aiyar
Cases ReferredHaranchandra Chakravarti v. Jay Chand I.L.R.
Excerpt:
- .....on 23rd the insolvent applied to be adjudicated and on 28th the official receiver was appointed interim receiver. two days later he moved the court under section 52 of the provincial insolvency act to adjourn the sale. he did not, in terms, ask for possession of the land to be delivered to him, but, as he wanted the sale to be adjourned so that he himself might sell, such a request on his part may be implied. the court refused the adjournment and the sale was conducted. on 23rd october the receiver asked the court not to confirm the sale, but his prayer was again refused. on 15th december the insolvent was adjudicated and the official receiver proceeded to lease his land to the appellant, after which the respondent obtained symbolical delivery from the court. the official receiver.....
Judgment:

1. The appellant in this case is a person who took a lease of an insolvent's land from an Official Receiver. The respondent purchased the land in execution of a decree passed against the insolvent and his sons and he sued to recover the value of the crops removed from it by the appellant. The facts and dates are these. The land was attached in execution and proclaimed for sale, the sale being fixed for 30th September, 1920. On 23rd the insolvent applied to be adjudicated and on 28th the Official Receiver was appointed interim receiver. Two days later he moved the Court under Section 52 of the Provincial Insolvency Act to adjourn the sale. He did not, in terms, ask for possession of the land to be delivered to him, but, as he wanted the sale to be adjourned so that he himself might sell, such a request on his part may be implied. The Court refused the adjournment and the sale was conducted. On 23rd October the Receiver asked the Court not to confirm the sale, but his prayer was again refused. On 15th December the insolvent was adjudicated and the Official Receiver proceeded to lease his land to the appellant, after which the respondent obtained symbolical delivery from the Court. The Official Receiver subsequently applied to have the sale set aside. His application was rejected by the executing Court, but was allowed by the District Judge, whose order was, however, set aside by the High Court in a decision which is reported in Subramania Aiyar v. The Official Receiver, Tanjore (1925) 50 M.L.J. 665. The Court held that the Receiver referred to in Section 52 of the Provincial Insolvency Act was the Receiver appointed after adjudication and that no application under that section on the part of an interim receiver would lie. With great respect, we must express our dissent from this view. Section 52, as now amended, contemplates the presentation of an application, not, as it used to do, after adjudication, but at an earlier stage--that is to say, after an insolvency petition has been admitted. At that stage, the only Receiver that can be in existence for the purpose of applying is an interim receiver. In a case reported in Mahasukh v. Valibhai (1927) 30 Bom. L.R. 455 an application had been presented under Section 52 by an interim receiver and no one seems even to have argued that it was not maintainable for the reason that no interim receiver could apply. The truth is that Section 52, in its present form, is entirely out of place under the heading 'Effect of insolvency (in other words, of adjudication) on antecedent transactions.' Before amendment, it came properly under that heading. Now it is concerned with applications presented at an earlier stage. Mr. Sitarama Rao seeks to support the High Court's order on another ground that Section 52 does not apply to immovable property, which cannot be said to be 'in the possession of the Court1.' Were the matter res integra, we should be inclined to accept his argument. In India, land is attached not by seizure but by means of a prohibitory order and it is difficult to understand how, while it remains in the physical possession of the judgment-debtor or of a third party, it can be said also to be in the possession of the Court. There is, however, plenty of authority--for example, Haranchandra Chakravarti v. Jay Chand I.L.R. (1929) C. 122 for the view that the section applies to all kinds of property under attachment by a Court and we do not propose to dissent, from it. The result, then, is that, on the application of the interim receiver, the executing Court should at once have stayed the sale and directed delivery of possession to him, the section being peremptory in its terms. The sale has, however, been confirmed by a Bench of this Court and, even if it could be set aside, no one is asking for it to be set aside. But it is important to define the true legal position which has some bearing on the appellant's plea of bona fides. It is not disputed that he paid rent to the Official Receiver or that he deposited part of it in Court under Order 21, Rule 46. Under the circumstances, we do not consider that he should be asked to pay twice, over. His payments to the Official Receiver seem to have been made bona fide and to be valid under Section 50 of the Transfer of Property Act. The Official Receiver was quite justified in declining to recognise the title of the auction-purchaser under a sale that should not have taken place or been confirmed by a Court, which was required peremptorily by the statute to stay its hand and to transfer the attached property to the Receiver. As regards the deposit under Order 21, Rule 46, the law allowed it and it can hardly be described as mala fide. The final argument is that the Receiver was not entitled to possession of the sons' shares and that the plea of bona fides could not be sustained in regard to them. As to that, the law at that time was not settled and there was some doubt whether the sons' shares also did not vest in the Receiver. Apart from that, it is clear that the auction-purchaser himself was not entitled to anything but symbolical possession. If he has a legal grievance at all, it is against the Official Receiver, who has received payment from his lessee.

2. We allow the second appeal and dismiss the suit with costs throughout.


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