Skip to content


Karutha Syed Muhammad Rowthar Vs. Official Receiver and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai
Decided On
Reported inAIR1937Mad32
AppellantKarutha Syed Muhammad Rowthar
RespondentOfficial Receiver and anr.
Cases ReferredVenkatarama Rao v. Sobhanadri Appa Rao Bahadur and
Excerpt:
.....receiver appealed to the district judge and in appeal it would appear that the question whether the transfers were made for valuable consideration and in good faith was not actually argued and the only point argued before the district judge was whether the learned subordinate judge's interpretation of the law regarding the jurisdiction of the insolvency court and the validity of the registration of the deeds in question was correct. sobhanadri appa rao bahadur ,in which the previous decisions on the validity of registration have been reviewed and it has boon clearly laid down that where the vendor neither intends to sell nor the purchaser intends to buy any particular item of property included in the deed of transfer and the inclusion of such property in the deed of transfer is a mere..........it was also alleged that even otherwise the transfers did not take effect actually as the deeds of transfer had not been validly registered under the registration act, the official receiver accordingly prayed that the deeds in question should be declared void and annulled.2. the subordinate judge after hearing the evidence came to the conclusion that the transfers had been made bona fide and for valuable consideration. as regards the other question of the validity of the registration of the deeds of transfer, he was of opinion that if the insolvency court could decide the question, then the registration was not invalid under the law relating to registration of documents. the application was accordingly dismissed with costs. the official receiver appealed to the district judge.....
Judgment:

Pandrang Row, J.

1. This is an appeal from the decree of the District Judge of Coimbatore dated 13th March 1935, reversing on appeal, the order of the Additional Subordinate Judge of Coimbatore, dated 28th April 1934, on an application made Under Sections 53 and 4, Provincial Insolvency Act, 5 of 1920. That application was made by the Official Receiver of Coimbatore in respect of the insolvency of E.M. Muhammad Ismail Saheb alias Mudali who was adjudicated an insolvent on 8th December 1927 on a petition for adjudication made by one of his creditors who was his own brother on 24th August 1927. The present application related to two transfers of immoveable property made by the insolvent on 17th July 1926: one was a sale deed for Rs. 22,000 and the other was a usufructuary mortgage for Rs. 4,000, in favour of one Karutha Syed Muhammad Rowther, the appellant in the present appeal, and who is the son-in-law's sister's husband of the insolvent. It was alleged that these transfers were without consideration and were made in bad faith with the object of cheating the creditors of the insolvent. It was also alleged that even otherwise the transfers did not take effect actually as the deeds of transfer had not been validly registered under the Registration Act, the Official Receiver accordingly prayed that the deeds in question should be declared void and annulled.

2. The Subordinate Judge after hearing the evidence came to the conclusion that the transfers had been made bona fide and for valuable consideration. As regards the other question of the validity of the registration of the deeds of transfer, he was of opinion that if the Insolvency Court could decide the question, then the registration was not invalid under the law relating to registration of documents. The application was accordingly dismissed with costs. The Official Receiver appealed to the District Judge and in appeal it would appear that the question whether the transfers were made for valuable consideration and in good faith was not actually argued and the only point argued before the District Judge was whether the learned Subordinate Judge's interpretation of the law regarding the jurisdiction of the Insolvency Court and the validity of the registration of the deeds in question was correct. On these points the learned District Judge differed from the Subordinate Judge and he was of the opinion that the Insolvency Court has jurisdiction to decide the matter and that under the latest decision of the Judicial Committee reported in Collector of Gorakhpur v. Ram Sundar Mal the registration must be held to be invalid as neither party intended that certain items included in the deeds of transfer should really pass from one to the other and the inclusion of those items was only to enable the documents to be registered by the Sub-Registrar of Aravakkurichi instead of by the Sub-Registrar at Erode who would otherwise have had the jurisdiction to register them.

3. In this appeal by the transferee, one main question has been argued and that is the question of jurisdiction. If as a matter of fact the Insolvency Court has jurisdiction to decide the validity or otherwise of the registration of these deeds, then it is not seriously attempted to be argued that the finding of the learned District Judge is not right, for apart from the decision of the Judicial Committee relied upon by the learned District Judge, there is a subsequent decision of the Judicial Committee reported in Venkatarama Rao v. Sobhanadri Appa Rao Bahadur , in which the previous decisions on the validity of registration have been reviewed and it has boon clearly laid down that where the vendor neither intends to sell nor the purchaser intends to buy any particular item of property included in the deed of transfer and the inclusion of such property in the deed of transfer is a mere device to evade the provisions of the Registration Act, there can be no effective registration of the deed of transfer at all. The question of jurisdiction mainly turns on the correct interpretation of Section 4, Provincial Insolvency Act. It is argued by the learned advocate for the appellant that the jurisdiction conferred by this section on the Insolvency Court so far as the annulling of deeds of transfer is concerned is limited to cases which are provided by Sections 53 and 54 of the Act, and that a general power of annulling transfers not falling within Sections 53 and 54 of the Act cannot be exercised by the Insolvency Court under Section 4 of the Act.

4. No doubt this view has some arguments to support it and it found favour with Son, J. in Anwar Khan v. Muhammadkhan : AIR1929All105 , but he was in a minority, and the view of the majority of the Bench was otherwise, namely that Section 53, Provincial Insolvency Act, does not limit or restrict the jurisdiction conferred upon the Insolvency Court by Section 4 to decide all questions of title which arise in cases of insolvency. The majority view has been followed in The Official Receiver, West Godavari, Ellore v. Sagiraju Subbayya AIR 1933 Mad 527 and it was assumed in a previous case, namely Chittamal v. Ponnusami Naicker AIR 1926 Mad 363, that it is open to the Insolvency Court Under Section 4, Provincial Insolvency Act to try the question whether the insolvent is entitled to certain property or not when there is a dispute about the title to it. The language employed in Section 4 is very wide, and though there is the proviso that the powers given by that section are subject to the provisions of the Act, there is no reason to suppose that where the Act does not expressly limit those powers, the very wide powers given by that section were intended by the legislature to be cut down by mere implication, that is to say, that because express powers are given to annul certain transfers by Sections 53 and 54, the power to annul all other transfers must be deemed to be withheld from the Court, in spite of the wide powers conferred by Section 4, which says that the Court shall have 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 any case of insolvency which the Insolvency Court might deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in such a case.

5. In this particular case certain very valuable items of property which belonged to the insolvent till July 1926 were transferred to the appellant and the question which the Insolvency Court was asked to decide was whether these properties were still the properties of the insolvent and could be made available for the benefit of the creditors. It was certainly within the competence of the Court to decide this question as that question had to be decided for making a complete distribution of the insolvent's property in the insolvency proceedings. In fact it would appear as if the bulk of the property of the insolvent was the subject matter of the application before the Insolvency Court, and I am of opinion that the Insolvency Court exercised its discretion properly in deciding the matter itself instead of referring the Official Receiver to the ordinary civil Court. The question of jurisdiction being thus decided against the appellant, there is really nothing more left in the appellant's case. For, the question as to what was the intention of the parties in including certain items of property in the deeds of transfer is a question of fact, and the finding of the lower appellate Court on this question of fact is final. There is certainly sufficient evidence to support that finding. As regards the question whether particular items were not the property of the transferor at the time, the findings of the Courts below are concurrent, and the correctness of these concurrent findings has not been questioned before me. The appellant set up a case of oral transfer of these items to the insolvent sometime before the deeds were executed, but this story was not believed by either the trial Judge or by the lower appellate Court. The inclusion of these items in the deeds of transfer was thus a more cloak or device, the object of which must have been only to evade registration of the deeds at Erode, where but for the inclusion of those items they must have been registered. It was only by including them that it was possible to get the deeds registered at Aravakkurichi. The case therefore comes directly within the ambit of the latest decision of the Judicial Committee in Venkatarama Rao v. Sobhanadri Appa Rao Bahadur and therefore the finding of the learned District Judge that the registration was inoperative must be upheld. The appeal therefore fails and is dismissed with costs of the Official Receiver. Leave to appeal is refused.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //