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S.A. Rm. A. Vandarguzhal Achi and ors. Vs. South India Corporation (Madras) Ltd. and ors. - Court Judgment

LegalCrystal Citation
Subjectcivil
CourtChennai
Decided On
Reported inAIR1944Mad481
AppellantS.A. Rm. A. Vandarguzhal Achi and ors.
RespondentSouth India Corporation (Madras) Ltd. and ors.
Cases ReferredVenugopala Reddiar v. Krishnaswami Reddiar
Excerpt:
- .....insolvency act, sent a letter to the district court of ramnad requesting it to direct the official receiver of that place to render aid to the official assignee of rangoon. burma was then a part of british india and remained a part of british india until 1st april 1937 when the government of india act, 1935, came into force. on receipt of the letter of request the district judge directed the official receiver to render assistance to the official assignee of rangoon as required by section 77, provincial insolvency act. acting under this order the official receiver took possession of the property which is the subject-matter of this appeal. the property consisted of a house at kanadukathan. admittedly it belonged to the family. on 16th december 1988 the official assignee of rangoon.....
Judgment:

Leach, C.J.

1. Appellant 1 is the wife of one Annamalai Chettiar. Appellants 2, 3 and 4 are their sons. Annamalai was joint with his brothers Muthia alias Ramasami and Chandramouli. They are Nattukottai Chettiars and as a joint family carried on a money lending business in Burma. On 1st April 1933 the adult members of the family were adjudicated insolvents by the Rangoon High Court. On 31st August 1938 that Court, acting under the provisions of Section 126, Presidency Towns Insolvency Act, and Section 77, Provincial Insolvency Act, sent a letter to the District Court of Ramnad requesting it to direct the Official Receiver of that place to render aid to the Official Assignee of Rangoon. Burma was then a part of British India and remained a part of British India until 1st April 1937 when the Government of India Act, 1935, came into force. On receipt of the letter of request the District Judge directed the Official Receiver to render assistance to the Official Assignee of Rangoon as required by Section 77, Provincial Insolvency Act. Acting under this order the Official Receiver took possession of the property which is the subject-matter of this appeal. The property consisted of a house at Kanadukathan. Admittedly it belonged to the family. On 16th December 1988 the Official Assignee of Rangoon sold the house to respondent 1 for the sum of Rs. 42,500. The sale was free of a mortgage which had been created by the insolvents before their adjudication. On 19th September 1933 the Official Assignee had let the house to the wives of the insolvents on a monthly tenancy subject to an undertaking given by them to deliver up the property whenever called upon to do so. The wives of two of the insolvents had issues and the children also lived in this house. Annamalai had four sons, three of whom were minors and Chandramouli one son, who was also a minor. On 5th November 1941 respondent 1 as the purchaser applied to the District Court of Ramnad for an order requiring the wives, the four sons of Annamalai and the son of Chan-dramouli, to deliver up possession of the property. When the purchaser came to take possession the tenants obstructed him and alleged that the sale was not binding on the minors. The application for an order for possession was made under Sections 4, 5 and 56, Provincial Insolvency Act. Belying on the decision of this Court in Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147, the District Judge held that the Court had power to make the order. He rejected a suggestion that the application did not lie by reason of the separation of Burma from British India. The question whether the sale was binding on the minors was left to be decided in separate proceedings should this claim be persisted in. Consequently, the District Judge ordered the respondents to the application to deliver possession to the purchaser. The appeal is from that order. In the first instance the appeal came before Mockett and Bell JJ. who referred it to a Full Bench as Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147 was decided by a Division Bench and is in conflict with Venkatram v. Chettier A.I.R. 1928 Mad. 531 which was also decided by a Division Bench. As the Presidency Towns Insolvency Act was in force in Rangoon when the order of adjudication was passed, the insolvents' power to sell their sons' interests for the satisfaction of their debts devolved on the Official Assignee : Sat Narain v. Beharilal and Sat Narain v. Sri Kishandas . Therefore the Official Assignee had the power of conveying a full title to the purchaser of the property, subject to any contention on behalf of the minors that the debts of the fathers had been contracted for immoral or illegal purposes, which has never been suggested. The Official Assignee of Rangoon conveyed to respondent 1 'all estate, right, title, interest, claim and demand of the said S. A. R. M. Chettiar Firm and the mortgagees.' The family traded under the vilasam of S. A. R. M. The Official Assignee was not quite accurate in describing the property as the property of the firm. It was family property, but this error is not of importance because the Official Assignee must be deemed in law to have conveyed to the purchaser his full interest in the property and his interest was that of the fathers and the sons.

2. We will turn now to the question whether the District Court had power to order the delivery of the possession of the property to the respondent. Section 77, Provincial Insolvency Act, states that all Courts having jurisdiction in insolvency and the officers of these Courts shall severally act in aid of and be auxiliary to each other in all matters of insolvency, and an order of a Court seeking aid with a request to another Court shall be deemed sufficient to enable the latter Court to exercise, in regard to the matters directed by the order, such jurisdiction as either of the Courts could exercise in regard to similar matters within their respective jurisdictions. The corresponding section in the Presidency Towns Insolvency Act is Section 126. As a letter of request had been sent by the Rangoon High Court to the District Court of Ramnad, that Court was able to take all steps which were necessary for the administration of the estate there. Sub-section (1) of Section 4, Provincial Insolvency Act gives the Court, subject to the provisions of the Act, full power to decide all questions whether of title or priority, or of any nature whatsoever; and whether involving matters of law or of fact, which may arise in a case of insolvency coming within the cognisance of the Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in a case of insolvency. Section 5 gives the insolvency Court the same powers as it has in the exercise of original civil jurisdiction and directs that it shall follow the same procedure. Subsection (1) of Section 56 states that the Court may, at the time of the order of adjudication, or at. any time afterwards, appoint a receiver for the property of the insolvent, and the property shall thereupon vest in the receiver. Sub-section (S) says that where the Court appoints a receiver, it may remove a person from the possession or custody of property belonging to the insolvent, provided that the insolvent himself has a present right to do so.

3. In Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147 Ayling and Venkatasubba Rao JJ. held that Sections 4, 5 and 56, Provincial Insolvency Act conferred power on the Court to inquire into the title and order the delivery of an insolvent's property to a purchaser from the Official Receiver and remove the obstruction of a third party. This decision was followed by another Bench of this Court (Beasley C.J. and Bardswell J.) in Singaravelu Mudaliar v. Swaminatha Pillai 1933 M.W.N. 1487. In Venkatram v. Chokkier A.I.R. 1928 Mad. 531 Ramesam and Jackson JJ. held that while an Official Receiver on the insolvency of a Hindu father could sell the family property including his son's share, the insolvency Court could not give possession of the son's share to the purchaser under Section 4, Provincial Insolvency Act. The purchaser must, they considered, be relegated to a regular suit. The remarks made in the course of the judgment in this case are not consistent. In one place the learned Judges said:

Once the Official Receiver has sold the property to a stranger and converted the insolvent's estate into money, his business is to distribute this money among the creditors and it cannot be said that delivery of possession is a necessary part in the work of distributing the assets of the insolvent among the creditors.

Later they said that in such a ease as the one before them they did not see why the purchaser should not be given joint possession of the insolvent's share, whatever doubts there might be as to the son's share. We consider that the opinion to be preferred is that expressed in Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147 and in Singaravelu Mudaliar v. Swaminatha Pillai M.W.N. 1487 which was decided later than Venkatram v. Chokkier A.I.R. 1928 Mad. 531. Jackson J. who was a party to the decision in Venkatram v. Chokkier A.I.R. 1928 Mad. 531 granted the leave under Clause 15, Letters Patent which allowed the appeal in Singaravelu Mudaliar v. Swaminatha Pillai 1933 M.W.N. 1487 to be filed. In his judgment Beasley C.J. indicated that Jackson J. had granted leave because he had come to the conclusion that Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147 was correctly decided. Sections 4, 5 and 56, Provincial Insolvency Act are very widely worded and without hesitation we hold that they empower the Court to give possession to the purchaser of a property sold in insolvency proceedings at the instance of an Official Receiver. The question whether the District Court had power to entertain a purchaser's application, notwithstanding the separation of Burma from India has been decided by the judgment of the Federal Court in Venugopala Reddiar v. Krishnaswami Reddiar , which was an appeal from this Court. The judgment of this Court (Mockett and Kunhiraman JJ.) is reported in Krishnaswami v. Venugopala A.I.R. 1942 Mad. 614 a suit was filed in the Court of the Subordinate Judge of Trichinopoly for the possession of moveable and immovable properties which to a large extent were situated in Burma. The question was whether the Subordinate Judge had power to continue the hearing of the suit after the separation of Burma from India on 1st April 1937. This Court held that he had and the decision was upheld by the Federal Court. Mr. Sitarama Rao on behalf of the appellant has argued that this decision does not apply because the application which has given rise to the present appeal was filed after Burma had been separated from India. We are unable to accept the contention. The application was only one step in the administration of the insolvent's estate which the Rangoon High Court had ordered before the separation. While Burma was a province of India, the Rangoon High Court had requested the District Court of Ramnad to aid it in the administration of this estate and the District Court had agreed to do so. We consider that the judgment in Venugopala Reddiar v. Krishnaswami Reddiar is directly in point. For these reasons the appeal fails and must be dismissed with costs of respondent 1. The Learned Counsel for the appellants asks for a certificate under Section 205, Government of India Act, 1935. The appellants are entitled to a certificate and one will issue.


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