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P. Ct. Pr. Periakaruppan Chettiar Vs. S.S. Rm. Raman Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 1006 of 1955
Judge
Reported inAIR1957Mad299
ActsProvincial Insolvency Act, 1920 - Sections 19 and 24; Provincial Insolvency Rules - Rule 21(3)
AppellantP. Ct. Pr. Periakaruppan Chettiar
RespondentS.S. Rm. Raman Chettiar and anr.
Advocates:K. Subramanian, Adv.
DispositionPetition dismissed
Cases ReferredNayudu J. In Chunduru Krishnayya v. Ranganayakulu
Excerpt:
.....raised by the learned counsel was that the failure on the part of the subordinate judge to issue notice to udayammai achi the alienee rendered the order of adjudication illegal and void. it does not however follow that the failure to issue the notice to the transferee necessarily vitiates the proceedings and renders it void. of course if the transferee were to challenge the finding of the court as to the nature of the alienation in her favour the failure of the court to observe the rule might have the effect of rendering the finding arrived at not binding on her. that the failure to issue the notice has this consequence has been laid down by krishna-swami nayudu j. i should think this is a case where the lower courts failed to conform to the rules provided under the civil rules of..........put forward a claim that the mill was no longer his property having been transferred by him to one udayammai achi alias sigappayee achi, and thereupon the respondent filed a petition to adjudicate the debtor an insolvent on the ground that the transfer alleged was nominal and sham and was also fraudulent. there were other allegations as regards other acts of insolvency within section 9 of the provincial insolvency act but it is unnecessary to refer to them since the courts below held that they were not established. notice in this application for adjudication was served upon the debtor petitioner here and as the latter asserted the bona fides of the alienation in favour of udayammai achi an enquiry was held in the course of which the petitioning creditor examined four witnesses while the.....
Judgment:

Rajagopala Ayyangar, J.

1. This is a petition to revise the order of the District Judge of Tiruchirapalli to C. M. A. No. 11 of 1954 before him whereby he affirmed an order of the Sub Judge of Pudu-kottai adjudicating the petitioner an insolvent. The only point that was urged before me was that the order of adjudication was vitiated by no notice having been taken out by the alienee whose alienation was attacked as an act of insolvency in the petition for adjudication.

2. The facts of the case are briefly these: The respondent Raman Chettiar obtained a decree In O. S. No. 191 of 1952 on the file of the District Munsif of pudukettai for a sum of about rs. 2000. He took out execution against a flour and rice mill at Pudukottai belonging to the petitioner and proceeded to attach, it. The debtor put forward a claim that the mill was no longer his property having been transferred by him to one Udayammai Achi alias Sigappayee Achi, and thereupon the respondent filed a petition to adjudicate the debtor an insolvent on the ground that the transfer alleged was nominal and sham and was also fraudulent. There were other allegations as regards other acts of insolvency within Section 9 of the Provincial Insolvency Act but it is unnecessary to refer to them since the courts below held that they were not established. Notice in this application for adjudication was served upon the debtor petitioner here and as the latter asserted the bona fides of the alienation in favour of Udayammai Achi an enquiry was held in the course of which the petitioning creditor examined four witnesses while the debtor examined himself as his sole witness. No notice however was taken out to Udayammai Achi the alleged transferee nor was any objection taken by the debtor to the insolvency proceedings by reason of this defect. The learned Subordinate Judge held that the transfer to Udayammai Achi was a fraudulent one made with intent to defeat and delay the creditors of the debtor. He found in the result that the respondent had committed acts of insolvency and passed an order of adjudication. The matter was then taken up in appeal to the learned District Judge and even in the course of appeal no objection was taken to the absence of notice to Udayammai Achi as vitiating the order of the Subordinate Judge.

The learned District Judge after an examination of the facts held that it was clearly proved that the debtor had made a transfer of his property with intent to defeat and delay his creditors within Section 6(b) of Provincial Insolvency Act and confirmed the order of the Sub-prdinate Judge.

3. In view of the concurrent findings of the courts below it would not be open to the petitioner to challenge the findings reached that debtor had committed an act of insolvency with in Section 6(b) of the Provincial Insolvency Acl. The only contention raised by the learned counsel was that the failure on the part of the Subordinate Judge to issue notice to udayammai Achi the alienee rendered the order of adjudication illegal and void. Rule XXI Sub-rule 3 of the rules framed under the Provincial Insolvency Act runs:

'Notice of the date fixed for the hearing of an insolvency petition under Section 19(1) of the Act shall be sent by the court by registered post if the petition Is by the debtor to all creditors-mentioned in the petition and if the petition is by a creditor to the debtor and to any transferee the transfer in whose favour is alleged to be an act of insolvency within the meaning of Clause (a), (b) or (c) of Section 6 of the Act, not less than 14 days before the said date.'

The notice provided for the transferee was not served as required by this rule. There is no doubt that this rule is mandatory in its nature and the court is bound to follow it. It does not however follow that the failure to issue the notice to the transferee necessarily vitiates the proceedings and renders it void. Of course if the transferee were to challenge the finding of the court as to the nature of the alienation in her favour the failure of the court to observe the rule might have the effect of rendering the finding arrived at not binding on her.

That the failure to issue the notice has this consequence has been laid down by Krishna-swami Nayudu J. In Chunduru Krishnayya v. Ranganayakulu : AIR1950Mad386 . In that case the alienees applied to the Court to be heard before the order of adjudication was passed. The Subordinate Judge refused to permit this and proceeded to hear the petition for ad-Judicatton without giving an opportunity to the transferees to be heard and this court set aside the order of adjudication passed in those circumstances. The learned Judge after referring to the terras of rule XXI (3) observed;

'The petition having been filed alter the date of the amendment notice should ordinarily have gone to 'the petitioners and they should have been given an opportunity to be heard on the question whether an order for adjudication should Issue or not ..... The Subordinate Court should ordinarily have issued notice in pursuance of the rule and when the petitioners filed an application praying' that they might be given notice, added as parties and be heard at least then they should have been given an opportunity to come on record and be heard. I should think this is a case where the lower courts failed to conform to the rules provided under the Civil rules of Practice and order passed without strict compliance of the rules could not, however, be supported.'

4. It will be seen that that was a case where the attack on the validity of the order of adjudication was by the aggrieved transferee. This does not necessarily mean that an order passed without notice to the transferee is non est as being null and void. In my opinion the failure to conform to the rule would merely render the resultant order of adjudication. irregularly passed which could be got set aside by the persons aggrieved by want of notice. But the debtor on whom notice was served cannot be heard to urge the failure to serve the transferee as a ground for invalidating the order of adjudication. This is particularly so in this case where the point regarding to failure to comply with rule XXI (3), of the rules was never urged by the debtor either before the Subordinate Judge or even the District Judge.

5. Learned counsel for the petitioner urged that Udayammai Achi had filed a claim petition under Order 21 Rule '58 C. P. C. objecting to the attachment of the mill by the present Petition-ing-creditor, that the claim petition had been allowed' and that no suit had been brought within a period of one year by the aggrieved decreeholder. He therefore argued that there would be inconsistent decision if in this Insolvency proceedings it was held that the transfer to Udayammai Achi was fraudulent when the order in the claim petition, recognised the title in Udayammai Achi. In my opinion this is wholly an irrelevant consideration for the disposal of the revision petition.

The supposed conflict is in regard to the right of Udayammai Achi and she might be left to take care of her interests. So far as the petitioner is concerned as the order of adjudication was passed after notice to him on proof that he had committed an act ot Insolvency falling underSection 6(b) of the Act, the decision of the court below is light and the revision petition fails andis dismissed. No costs.


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