1. The Official Assignee appeals from an order of Palaniswamy J., who dismissed his application for delivery to him of two machineries as belonging to the insolvent before his adjudication relying on the doctrine of reputed ownership under Section 52 (2)(c) of the Presidency Towns Insolvency Act.
2. The insolvent is one Raj Krishna Sharma. He was adjudicated on his own petition on 11th January, 1971. He had been carrying on business under the name and style of Raj Cable Industries, manufacturing and selling P.V.C. Cables and Wires. He had his business premises in Linghi Chetty Street and his factory at Kakalur, Tiruvellore Taluk. He purchased two machineries, one in December, 1967 for Rs. 14,935 and the other in December, 1969 for Rs. 26,162. They were both purchased from one Bharat Bhushan Sharma, said to be his son-in-law. The Official Assignee's application related to recovery of possession of these two-machines.
3. The applicant was resisted by his son-in-law and also Messrs. Suresh Electric Company. So far as the son-in-law was concerned, he claimed to have advanced some monies to his father-in-law and for amounts due from him, he had taken possession of the machinery from his father-in-law. This case was not found by the learned Judge. The question does not arise for our consideration over again.
4. As far as Messrs. Suresh Electric Company which is the contesting respondent concerned, it appears that both the machines were pledged with this respondent. The learned Judge, in the course of his order, says that the pledge of the two machineries was admitted. Apart from that admission, two agreements were in evidence, namely, Exhibits R-3 and R-5 both dated 5th December, 1970? which showed that the two machineries were pledged with the respondent for Rs. 27,500. The Official Assignee would say that in spite of these pledges, since the insolvent continued to be in possession with the consent of the pledgee, under the doctrine of reputed ownership on the basis of Section 52 (2)(c), he was entitled to delivery of possession of both the machines. The learned Judge declined to accept his contention and dismissed his application.
5. We arc in agreement with the learned Judge. In order to invoke the principle of reputed ownership under Section 52 (2)(c) not only the property must be goods that should be in possession of the insolvent, but they should have been used in his trade and what is even more important is that it should have been so used in the circumstance that the insolvent was the reputed owner of the goods.
6. In this case, beyond possession of the second machinery with the insolvent, nothing farther appears from the record. Mere possession of the machinery with the insolvent will not, in the circumstances of the case, in our opinion, defeat the right of the pledgee. We may take it that the insolvent was in possession of the machinery with the consent of the pledgee. But there is nothing to show that the machinery was, at the time of adjudication used by the insolvent in his trade. As a matter of fact, the record shows that he had by the time of his adjudication long stopped running his trade or business. Apart from that, there was no act or circumstance touching possession of the machinery with the insolvent that would suggest that the insolvent was reputed to be the owner of the machinery. They were not dealt with in a manner that would be inconsistent with the pledge with the respondent.
7. In, the circumstances, therefore, we are not prepared to hold that the principle of reputed ownership will apply to this case.
8. The appeal is, therefore, dismissed. No costs.