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Pasumarti Satyanarayana Rao and anr. Vs. the Official Receiver of West Godavari and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1947)2MLJ425
AppellantPasumarti Satyanarayana Rao and anr.
RespondentThe Official Receiver of West Godavari and anr.
Cases Referred and Abbireddi v. Venkatareddi
Excerpt:
- - 2,000. the litigation was, however, unsuccessful and it was ultimately established that there was no charge in respect of the decree against appala raju. he recommended that the adjudication should be annulled and that an order should be made revesting the property in the insolvent. reading the letter of the official receiver and the affidavit together it is obvious that the official receiver was unaware of the death of the insolvent so early as 1941 and that he failed to recommend what he ought to have recommended, viz, the sale of the decree in favour of the insolvent......the appellants, two creditors of an insolvent, for review of an order which had been made by the district judge on the 18th november, 1944, whereby he annulled the insolvency under section 43 of the provincial insolvency act. the insolvent was one chakka rangayya who was adjudged an insolvent on his own petition on the 17th november, 1927, in i.p. no. 8 of 1927 on the file of the district judge of west godavari. it would appear that the insolvent had obtained a decree for about rs.10,000 against one appaia raju. there was a doubt whether that decree created a charge and there was litigation for the purpose of enforcing the charge, if any. the two appellants and certain other creditors financed that litigation and advanced about rs. 2,000. the litigation was, however, unsuccessful and.....
Judgment:

Govindarajachari, J.

1. These civil miscellaneous appeals are against the orders of the District Judge of West Godavari dismissing two petitions filed by the appellants, two creditors of an insolvent, for review of an order which had been made by the District Judge on the 18th November, 1944, whereby he annulled the insolvency under Section 43 of the Provincial Insolvency Act. The insolvent was one Chakka Rangayya who was adjudged an insolvent on his own petition on the 17th November, 1927, in I.P. No. 8 of 1927 on the file of the District Judge of West Godavari. It would appear that the insolvent had obtained a decree for about Rs.10,000 against one Appaia Raju. There was a doubt whether that decree created a charge and there was litigation for the purpose of enforcing the charge, if any. The two appellants and certain other creditors financed that litigation and advanced about Rs. 2,000. The litigation was, however, unsuccessful and it was ultimately established that there was no charge in respect of the decree against Appala Raju. On the 25th September, 1944, the Official Receiver wrote to the District Judge asking that the adjudication should be annulled. On the 24th October following, the District Judge directed that notice of the Official Receiver's letter be given to the concerned vakils. He also called for a report from the Official Receiver as to whether the administration of the estate was completed and whether there was any amount in deposit to cover the charges of publication of the notice of annulment. The matter was ' called on ' the 4th November by which time notice was given only to one Vakil. Notices were therefore directed to be served on three other vakils who had appeared for some of the creditors in the course of the insolvency proceedings and the matter was adjourned to the 18th November to await the objections of the creditors and the report of the Official Receiver. Nobody appeared on the date. Meanwhile the Official Receiver submitted his report in which he stated that there was one decree in favour of the insolvent which he could not execute as none of the creditors was taking any interest in the matter of the execution of that decree. He recommended that the adjudication should be annulled and that an order should be made revesting the property in the insolvent. This recommendation was accepted by the District Judge who annulled the insolvency under Section 43 of the Provincial Insolvency Act. Two of the creditors thereupon filed applications under Order 47, Rule 2 of the Code of Civil Procedure read with Section 5 of the Provincial Insolvency Act for reviewing the order which the District Judge had made on the 18th November, 1944. The applications were dismissed by the District Judge and the present appeals are against those orders of dismissal. In the supporting affidavits the creditors referred to the fact that the insolvent died on or about 13th November, 1941, and that they and certain other creditors had advanced a sum of Rs. 2,000 for the litigation already referred to and that the proper course for the receiver would have been to auction the decree in the insolvent's favour and to realise there by as much as could be realised and distribute the same amongst the creditors. Reading the letter of the Official Receiver and the affidavit together it is obvious that the Official Receiver was unaware of the death of the insolvent so early as 1941 and that he failed to recommend what he ought to have recommended, viz, the sale of the decree in favour of the insolvent. He no doubt says that none of the creditore co-operated with him in the matter of execution of the decree, but it does not appeals whether he issued any notice to the creditors asking them for assistance in the matter of execution and whether on such notice they refused or neglected to cooperate with him. Thus matters of which the Court should have been apprised by the Official Receiver were not brought to its notice. The District Judge was therefore not justified in refusing to review his previous order when his attention was drawn to facts which were not placed before him by the Official Receiver and which justified his re-considering his previous order and Setting aside the annulment which he had directed.

2. It has been argued by Mr. Viyyanna on behalf of the second respondent in these appeals who is said to be the legal representative of the deceased insolvent that the lower Court had no power to review its previous order. He relied on Venugopalachariar v. Chinnalal Sowcar : AIR1926Mad942 in support of his, argument. In that case there was an application under Order 9 of the Civil Procedure Code read with Section 5 of the Provincial Insolvency Act for setting aside an order of annulment which had been passed in the absence of the insolvent. It was pointed out that under Section 10 of the Provincial Insolvency Act the insolvent could apply for a fresh adjudication, since Section 5 of the Provincial Insolvency Act provides that the provisions of the Code of Civil Procedure shall apply subject to the provisions of the Act. Phillips and Madhavan Nair, JJ., held in the case under discussion that the special procedure prescribed by Section 10 excluded the procedure laid down in Order 9 of the Code of Civil Procedure. , It is not suggested that theft is any special procedure prescribed by the Provincial Insolvency Act of which the creditors could have availed themselves, in the circumstances of the present case. There is abundant authority in support of the proposition that orders passed under the Provincial Insolvency Act are reviewable as Order 47 Rule 2 is rendered applicable to proceedings in insolvency by Section 5 of the Provincial Insolvency Act see Official Receiver Tanjore v. Nataraja Sastrial (1922) 44 M.L.J. 251 : I.L.R. Mad. 405. Crl. Appeal No. 86 of 1947. 28th May, 1947. 55 Crl. Appeal No. 86 of 1947 and Abbireddi v. Venkatareddi (1925) 51 M.L.J. 60. We therefore hold that there was jurisdiction in the Court to entertain the application for review filed by the creditors. In view of what we have stated above as regards the merits of these applications, we allow the appeals and grant the -review asked for. The second respondent will pay the costs of these appeals, but there will be only one counsel's fee.


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