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The Indian Bank and the Official Receiver of Madura Vs. Seth Bansiram Jashamal Firm, Through Its Managing Partner, Lilaram and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1934Mad360; 150Ind.Cas.538; (1934)66MLJ532
AppellantThe Indian Bank and the Official Receiver of Madura
RespondentSeth Bansiram Jashamal Firm, Through Its Managing Partner, Lilaram and anr.
Cases ReferredMarkham v. Markham
Excerpt:
- - 10. this is signed by the deputy registrar and the date of it seems to be 22nd march, 1929. the petition was returned to the office with the counsel's endorsement the petition seems to be unnecessary, but it is better, to avoid technical objection, that it is not withdrawn. on an analogous reason it may well be held that the official receiver not having filed the appeal, one of the creditors, though their general body is represented by the official receiver, cannot step in and file the appeal as he is not a party to the suit. even if such permission may be asked, we are not satisfied that this is a proper case in which the permission should be given......hearing of the appeal is taken by the respondents that since the appellant was not a party to the suit or decree in the lower court, this appeal is incompetent and should be dismissed.3. the 1st plaintiff in the suit is a moneylender. the 2nd plaintiff is the purchaser of the suit properties from him. the defendant is the official receiver of madura. there are no other parties to the suit.4. the suit out of which this appeal arises was instituted by the plaintiffs under order 21, rule 403, civil procedure code, to declare their title to two items of property and for a temporary injunction to restrain the defendant from taking possession of them.5. on the 22nd march, 1923, a hypothecation bond ex. a was executed in the 1st plaintiff's favour by one somasundara nadar, his adult son and.....
Judgment:

Madhavan Nair, J.

1. This Appeal has been filed against the decree in O.S. No. 116 of 1927 on the file of the Court of the Subordinate Judge of Madura.

2. The Indian Bank, Ltd., Madras, is the appellant in this Court. The appellant was not a party to the suit or to the decree passed in it. A preliminary objection to the hearing of the appeal is taken by the respondents that since the appellant was not a party to the suit or decree in the Lower Court, this appeal is incompetent and should be dismissed.

3. The 1st plaintiff in the suit is a moneylender. The 2nd plaintiff is the purchaser of the suit properties from him. The defendant is the Official Receiver of Madura. There are no other parties to the suit.

4. The suit out of which this appeal arises was instituted by the plaintiffs under Order 21, Rule 403, Civil Procedure Code, to declare their title to two items of property and for a temporary injunction to restrain the defendant from taking possession of them.

5. On the 22nd March, 1923, a hypothecation bond Ex. A was executed in the 1st plaintiff's favour by one Somasundara Nadar, his adult son and five minor sons represented by their father. In September, 1923, the 1st plaintiff sued upon the bond. Somasundara Nadar and his sons remained ex parte and a preliminary decree was passed on the 27th October, 1923. The day before the decree Somasundara Nadar filed I. P. No. 63 of 1923 in the District Court and on the same date the Official Receiver of Madura was appointed as the interim receiver. Somasundara Nadar was adjudicated insolvent in January, 1924 and the District Court passed a vesting order in favour of the Official Receiver on 25th January, 1924. In the meanwhile, the 1st plaintiff had applied for final decree and on the 1st February he obtained it without impleading the Official Receiver in whom the properties of the insolvent had already vested. He executed the decree and himself purchased the hypothecated properties which consisted of three items and sold them to the 2nd plaintiff. The suit related only to two items. After his purchase the 1st plaintiff obtained possession of one item but he was obstructed by the Official Receiver with respect to the other item. Then two petitions were filed before the Subordinate Judge, one by the 1st plaintiff for removal of the obstruction caused by the Official Receiver and the other by the Official Receiver for delivery to him of the item already delivered to the 1st plaintiff. The two petitions were tried together and were decided in favour of the 1st plaintiff. He accordingly obtained delivery of the remaining item also. But the judgment of the Sub-Court was set aside by the High Court on revision, and before the defendant, the Official Receiver, could apply for re-delivery of the two items the suit under appeal was instituted by the plaintiffs under Order 21, Rule 103, Civil Procedure Code.

6. The Lower Court decided that the 1st plaintiff has acquired a valid title under the sale certificate to six-sevenths of the suit properties. As regards the remaining one-seventh it held that the defendant's title should be upheld. In the result the 2nd plaintiff (that is, the purchaser from the 1st plaintiff) and the defendant, the Official Receiver, were declared entitled to joint possession of the two suit items for the respective six-seventh and one-seventh shares. In the memorandum of appeal the appellant has amongst other grounds raised the question that the Lower Court should, even on its finding, have dismissed the suit with a declaration of the plaintiffs' rights as purchasers and should have referred them to a suit for a general partition to work out such rights as they may have.

7. It will appear from what has been stated above that besides the plaintiffs and the Official Receiver there were no other parties to the suit; and that having regard to his written statement the decree in so far as it related to joint possession and the declaration of title as regards the six-seventh share was against the Official Receiver. If he was aggrieved by the decree he should have preferred an appeal against it. But this he did not do. What actually happened was this. The last day for filing the appeal was the 1st November, 1928. On that date the Indian Bank, admittedly one of the creditors of Somasundaram Nadar, the 1st plaintiff, presented an appeal to this Court against the Lower Court's decree in so far as it related to the Official Receiver. The Bank also filed on the same date an application supported by an affidavit in which it prayed that

the Court may be pleased to give liberty to the appellant to appeal against the decree in O.S. No. 116 of 1927 on the file of the Sub-Court of Madura, on behalf of itself and the general body of creditors of the insolvent P. M. K. Somasundara Nadar as representing whom the 1st defendant, the Official Receiver was sued in the Lower Court and to permit the petitioner to use the name of the 1st defendant as 2nd appellant herein and to conduct the appeal for the benefit of the 2nd appellant and the general body of creditors.

9. At the end of the memorandum of appeal the appellant stated that. if the 1st appellant's petition to use the name of the 1st defendant as 2nd appellant is not allowed, the 1st appellant impleads him merely as the 3rd respondent

the other two respondents being the 1st and the 2nd plaintiffs. In the cause-title of the memorandum the 1st defendant, the Official Receiver, is included as the 2nd appellant--the Bank being the 1st appellant and is described as the 1st defendant in the Lower Court and in the High Court as the 2nd appellant or the 3rd respondent (if the 1st appellant's petition is not allowed). On the 6th November, 1928, a letter was written by the Official Receiver of Madura to the Sub-Court asking permission to 'adopt' the appeal filed by the Indian Bank and to continue it. From the letter it would appear that probably the Official Receiver did not prefer any appeal as it was thought that 'it was open to the creditor himself to prefer an appeal under the ruling in Chowdappa Gounder v. Kathaperumal Pillai I.L.R. (1926) Mad. 794 : : AIR1926Mad801 .'. The learned Subordinate Judge gave him the permission asked for and observed in his order that 'this is only an administrative order and is made without prejudice to any contentions of the respondent in the appeal as to the validity of the procedure as against him'. On the 24th November, 1928, the Official Receiver gave a vakalath to the 1st appellant's pleader authorising him to conduct the appeal. On the petition filed by the Indian Bank (numbered as C. M. P.. No. 1571 of 1929) for permission to file the appeal no order was passed by the Court as the petition was never put up for orders. We find an office note on the back of the petition to this effect:

The Official Receiver having since joined in the prosecution of the appeal it should be stated whether this petition is still necessary.

10. This is signed by the Deputy Registrar and the date of it seems to be 22nd March, 1929. The petition was returned to the office with the counsel's endorsement

The petition seems to be unnecessary, but it is better, to avoid technical objection, that it is not withdrawn. So this may be posted with the appeal. Re-presented.

11. This was on 25th March, 1929. This petition is now before us for orders along with the appeal after a lapse, of five years. It is to be regretted that this petition was not posted for orders earlier. Having regard to the fact that the appeal is presented by a person not a party to the suit, the petition asking for permission to file the appeal should have been put up for orders before the Court without any delay.

12. It is not now argued that there is an appeal before this Court filed by the Official Receiver. What is argued is that the Official Receiver representing the general body of creditors was a party to the suit, and that though the appellant, a creditor, was not an actual party, he being aggrieved by the decision, is competent to prefer the appeal when the Official Receiver does not file any appeal. In support of this contention reliance is placed on the decision of this Court in Chowdappa Gounder v. Kathaperumal Pillai I.L.R. (1926) Mad. 794 : : AIR1926Mad801 . In that case it was held that

Under Section 75(2) of the Provincial Insolvency Act (V of 1920), a creditor of an insolvent can appeal against an order of a District Court dismissing an application of the Official Receiver to set aside, under Sections 53 and 54 of the Act, an alienation by the insolvent, even though the creditor was not an actual party to the application and had not previously moved the Official Receiver to file an appeal and the latter had not refused to do so; but the creditor must prefer the appeal on behalf of all the creditors.

13. It will be observed that the case in Chowdappa Gounder v. Kathaperumal Pillai I.L.R. (1926) Mad. 794 : : AIR1926Mad801 arose under the Insolvency Act and the appeal was preferred under the specific provision of Section 75 of the Provincial Insolvency Act, which says:

Any such person aggrieved by any such decision or order of a District Court . . . may appeal to the High Court.

14. The present appeal not being one under the Insolvency Act, the decision in Chowdappa Gounder v. Kathaperumal Pillai I.L.R. (1926) Mad. 794 : : AIR1926Mad801 is obviously inapplicable. So also is the decision in Ananthanarayana Ayyar v. Sankaranarayana Ayyar I.L.R. (1923) Mad. 673 referred to in Chowdappa Gounder v. Kathaperumal Pillai I.L.R. (1926) Mad. 794 : : AIR1926Mad801 . The question whether the appellant though not a party to the suit can prefer an appeal against the decree on the ground that the Official Receiver who was a party to the suit representing the general body of creditors has not appealed, and that he, the appellant, as one of the creditors represented by the Official Receiver is aggrieved by the decree, must be answered with reference to the provisions of the Civil Procedure Code under which the appeal has been filed or the general principles of law. The relevant provisions of the Code are Section 96, Order 41 and Section 146. Clause (1) of Section 96, the section under which appeals are filed, says:.an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorised to hear appeals from the decisions of such Court.

15. None of the three clauses of the section says who may prefer the appeal. Order 41, Rule 1 refers to the form in which every appeal should be preferred, what should accompany the memorandum and the contents of the memorandum. This provision also does not state who may prefer the appeal. Section 146 refers to proceedings by or against representatives. It says:.where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or the application may be made by or against any person claiming under him.

16. Under this section, if a person who is entitled to prefer an appeal is dead, his legal representative may prefer the appeal. The proceeding contemplated by this section would include an appeal and the expression 'claiming under' is wide enough to cover cases of devolution etc. mentioned in Order 22, Rule 10. See Sitaratnaswami v. Lakshmi Narasimha I.L.R. (1917) Mad. 510 It is not argued that the appellant in this appeal claims under the Official Receiver. In his commentaries under Section 96, Civil Procedure Code, under the heading 'Who may appeal,' Sir Dinshah Mulla says:

An appeal under this section may be preferred by any of the following persons:

1. Any party to the suit adversely affected by the decree, or, if such party is dead, by his legal representative.

2. Any transferee of the interest of such party, who, so far as such interest is concerned, is bound by the decree, provided his name is entered on the record of the suit.

3. An auction-purchaser may appeal from an order in execution setting aside the sale on the ground of fraud.

No person, unless he is a party to the suit, is entitled to appeal under this section.

(The italics are ours.)

17. The appellant does not fall under any of the three classes mentioned above.

18. It would thus appear that under the Civil Procedure Code no person who is not a party to the suit can prefer an appeal under Section 96. In Mihin Lal v. Imtias Ali (1896) I.L.R. 18 All. 332 the learned Judges observed:.we think it right to say that a person who has been a stranger to the suit in the Court of first instance ought not to be brought on to the record of an appeal, unless he is brought on as a representative under the sections applying to the bringing on to the record of a representative in case of the death of a party to the suit or the devolution of title.

19. Order 31, Rule 1 referred to in this connection by the appellant does not help him. The rule says:

In all suits concerning property vested in a trustee, executor or administrator, where the contention is between the persons beneficially interested in such property and a third person, the trustee, executor or administrator shall represent the persons so interested, and it shall not ordinarily be necessary to make them parties to the suit. But the Court may, if it thinks fit, order them or any of them to be made parties.

20. There is no such special provision in the Civil Procedure Code regarding representation of creditors in suits concerning properties vested in Official Receivers.

21. The appellant not being entitled to prefer the appeal as not being a party to the suit, can it be said that, because the Official Receiver represents the general body of creditors in matters relating to insolvency, the appellant as a creditor though not a party to the suit can prefer the appeal when the Official Receiver does not prefer one? We think not. Some help in deciding the question may be obtained from a decision of the Bombay High Court in Jan Mahomed v. Syed Nurudin I.L.R. (1907) Bom. 155. In that case it was held that

A suit having been brought by the Advocate-General, he was the proper party to appeal and not the relators who have filed the appeal. They were not parties to the suit and as relators they have no right to step in when the Advocate-General, who was plaintiff, has not thought fit to appeal against the dismissal of the suit

and the appeal was dismissed on the ground that the appeal does not lie at the instance of relators. On an analogous reason it may well be held that the Official Receiver not having filed the appeal, one of the creditors, though their general body is represented by the Official Receiver, cannot step in and file the appeal as he is not a party to the suit. The right of appeal is a special creature of statute and it can be exercised only by those in whom the power is vested expressly or implied by the statute. In In re Markham, Markham v. Markham (1880)16 Ch. D. 1, relied on by the appellant, leave to a person interested in, but not party to an action, to appeal from an order was given by the Court; but it will appear from the report that such leave could be obtained according to the practice before the Judicature Acts. In In re Securities Insurance Company (1894) 2 Ch. 410

A Judge having made an order sanctioning an arrangement under the Joint Stock Companies Arrangement Act, 1870, an appeal was presented, by persons Whose interests as creditors were affected by the scheme, but who had not opposed the scheme at the meeting of creditors, nor appeared before the Judge when his sanction was applied for, nor obtained leave to appeal,' it was held, 'that the right of appeal under the Act is governed by the Companies Act, 1862, Section 124, which gives a right of appeal subject to the same conditions as appeals from decisions in the ordinary jurisdiction of the Court; and that, as according to the practice of the Court of Chancery a person not a party to the proceedings could not appeal from an order without the leave of the Court, the present appeal must be dismissed, the appellants not having obtained leave, and the case not being one in which the Court thought that leave ought to be given.

22. These decisions do not help the appellant as they do not directly bear on the question and relates only to power of the appellate Court to grant leave to appeal. Further the power of the appellate Court in these cases are rested on the practice prevailing in the English Courts.

23. For the above reasons, we must hold that this appeal by the appellant is incompetent.

24. The next question is whether leave may be granted to the appellant. No provision of law, or rule of practice, was shown to us entitling him to claim such leave. When the Official Receiver, who was a party to the suit and whose statutory duty is to institute, defend or continue any suit or other legal proceeding relating to the property of the insolvent (see Section 59,' Clause (d) of the Provincial Insolvency Act) has not preferred the appeal, we cannot see how a creditor can on general grounds ask the appellate Court to grant him leave to appeal. Even if such permission may be asked, we are not satisfied that this is a proper case in which the permission should be given. The Indian Bank had obtained its decree against Somasundara Nadar long before he was adjudicated an insolvent. It does not appear that it intervened in arty of the proceedings subsequent to the insolvency at any time; it did not even make an application to the Lower Court for permission to appeal.

25. In these circumstances, CM.P. No. 1571 of 1929 is dismissed. In the result the appeal is dismissed with costs.


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