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C.S. Ponnusami Mudaliar Vs. Subbaraya Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1947Mad298; (1947)1MLJ37
AppellantC.S. Ponnusami Mudaliar
RespondentSubbaraya Mudaliar and ors.
Cases ReferredManthiri Goundan v. Arunachalam
Excerpt:
- - arunachalam air1940mad569 was no longer good law ;because since that decision order 21, rule 22, had been amended so as to make it incumbent on the court in the case of applications for execution to issue notice to the official receiver instead of to the insolvent. that belief proved to be erroneous ;but there was no lack of good faith on the part of the decree-holder. the object of selling the houses separately was that individuals who could not afford or did not wish to purchase the whole of the property might have given good prices for the individual houses. we therefore agree with the learned subordinate judge that there was no fraud or material irregularity ;nor are we satisfied that the price fetched was less than what it would have been had the houses been sold separately......19th march, 1945, dismissing an application by the appellant to set aisde a sale of lot no. 3 in a sale held on the 26th october, 1943.2. the principal ground on which the sale was sought to be set aside was that a number of houses had been clubbed together as lot no. 3 and were sold together instead of separately, in which case the sum of the prices realised on individual sales would have been more than the amount realised by a sale of the houses clubbed together. the learned subordinate judge devoted a great part of his judgment to a consideration of the question whether an application by the appellant was maintainable, in view of the circumstance that he had been declared an insolvent, and he came to the conclusion that the application was not maintainable. fortunately however, he.....
Judgment:

Horwill, J.

1. This is an appeal against the order of the Subordinate Judge of Cuddalore dated the 19th March, 1945, dismissing an application by the appellant to set aisde a sale of lot No. 3 in a sale held on the 26th October, 1943.

2. The principal ground on which the sale was sought to be set aside was that a number of houses had been clubbed together as lot No. 3 and were sold together instead of separately, in which case the sum of the prices realised on individual sales would have been more than the amount realised by a sale of the houses clubbed together. The learned Subordinate Judge devoted a great part of his judgment to a consideration of the question whether an application by the appellant was maintainable, in view of the circumstance that he had been declared an insolvent, and he came to the conclusion that the application was not maintainable. Fortunately however, he also considered the application on its merits, and held that on that ground also no sufficient reason had been shown for setting aside the sale.

3. The learned Subordinate Judge primarily relied on Hari Rao v. Official Assignee, Madras (1926) 50 M.L.J. 359 in which on a question of insolvency law it was held that an insolvent had a mere spes successions in the property in the hands of the Official Receiver and that he was not therefore a person aggrieved. Although the learned Subordinate Judge apparently read Manthiri Goundan v. Arunachalam : AIR1940Mad569 in which it was held that the decision in Hari Rao v. Official Assignee, Madras (1926) 50 M.L.J. 359 had no application to petitions filed under Order 21, Rule 90, of the Civil Procedure Code, yet he rather surprisingly expressed the opinion that Manthiri Goundan v. Arunachalam : AIR1940Mad569 was no longer good law ; because since that decision Order 21, Rule 22, had been amended so as to make it incumbent on the Court in the case of applications for execution to issue notice to the Official Receiver instead of to the insolvent. The amendment of Rule 22 of Order 21 cannot however affect the question whether the insolvent was a person interested within the meaning of Order 21, Rule 90 ; and . since it was held in Manthiri Goundan v. Arunachalam : AIR1940Mad569 that an insolvent was a person interested within the ordinary meaning of that expression and that the decisions based on insolvency law in which it was held that the insolvent was not a person aggrieved had no application to petitions under Order 21, Rule 90, it would follow that the learned Subordinate Judge was wrong on this point. It is unnecessary to say anything more on this point ; because the learned advocate for the respondents at once conceded that he cannot support the judgment of the Subordinate Judge on that ground.

4. As to the merits of the appellant's application, we are in entire agreement with the learned Subordinate Judge. The appellant's own evidence as P.W. 1 shows that he was quite aware of the execution proceedings, although notice was not sent to him. His three sons who had not been adjudicated insolvents received notice ; and his evidence shows that he knew of the sale proceedings and had applied through them for an adjournment of the sale. Neither directly nor indirectly through his sons did he approach the Court and suggest that the houses should be sold in separate lots. The reason why all the houses were sold in one lot was that the decree-holder was of opinion that they were all the subject of one mortgage. That belief proved to be erroneous ; but there was no lack of good faith on the part of the decree-holder. He had obtained an encumbrance certificate, which showed that all these houses were the subject of one mortgage. If that were so, then it was obviously convenient and proper to sell the houses together in one lot; for it is unlikely that any one would have purchased any individual house if a number of other houses were with it subject to one mortgage.

5. The appellant alleged that the houses sold were worth Rs. 28,000 ; so that after deducting the mortgage amount of Rs. 7,500 they should have fetched Rs. 20,500, as against Rs. 8,825 actually realised. The appellant examined three witnesses, P. Ws. 2 to 4, to suggest that he was prejudiced by the clubbing together of these houses for sale and that if sold separately, higher prices would have been realised ; but the evidence of P. Ws. 2 to 4 does not convince us that that would have been the case. The object of selling the houses separately was that individuals who could not afford or did not wish to purchase the whole of the property might have given good prices for the individual houses. P.W. 2 was not however a man of such limited means and desires. He deposed even in his examination in chief that he was prepared to purchase the encumbered house for Rs. 10,000 and houses Nos. 1, 2, 3 and 3-A for Rs. 8,000. Assuming that he meant by this that he would have been prepared to have given Rs. 18,000 if the houses had been free from any encumbrance, this evidence would show that he would have been prepared to have given Rs. 10,500 for the unencumbered house No. 3-B and the encumbered houses Nos. 1,2,3 and 3-A ; yet he stated that even in examination-in-chief that he stopped bidding at Rs. 8,000, because the mortgage amounted to Rs. 7,500. One would have expected him on this evidence to have bid up to Rs. 10,500 at least, even though he did not want the remaining house No. 8, which he valued at Rs. 6,000. His evidence cannot therefore be accepted at its face value. The evidence of P.Ws. 3 and 4 shows that they were not very much interested in these houses and did not trouble to make any inquiries. P.W. 4 admitted that he did not even see the proclamation. We therefore agree with the learned Subordinate Judge that there was no fraud or material irregularity ; nor are we satisfied that the price fetched was less than what it would have been had the houses been sold separately.

6. The appeal is dismissed with costs of the first respondent.


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