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N. Vaithilingam Chettiar Vs. S.N. Lakshmana Nadar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberLetter Patent Appeal No. 37 of 1963
Judge
Reported inAIR1965Mad331
ActsProvincial Insolvency Act - Sections 4, 5, 56, 56(3), 68 and 75; Code of Civil Procedure (CPC), 1908 - Order 21, Rules 100 and 103
AppellantN. Vaithilingam Chettiar
RespondentS.N. Lakshmana Nadar
Cases ReferredBank v. Official Receiver
Excerpt:
.....accepted his case, for partition holding that what the respondent secured under this sale by the official receiver was only a half share which the insolvent possessed. held that in substance, the decision of the insolvency court as well as the appellate and revisional courts must be held to be one under s. ' this is but an enunciation the well-settled rule that a court, while finally adjudicating upon a matter which was properly before it, cannot at the same time, provide the disappointed party liberty to file a fresh suit; 56(3). that proceeds on the well known principle that where there is a specific provision in the act itself for executing orders of the insolvency court, like the one contained in s. for example it will be open to it, in appropriate cases, to refer the parties to a..........aside a summary order in proceedings relating to the delivery of possession of property sold by an official receiver. the property in question is a house in nagapattinam. it was purchased in the year 1910 by muthukumaraswami chettiar, who died 8 years later, leaving behind him two sons, vaidyalinga, the appellant, and ramalinga. the former was employed in the railways and his duties compelled him to lie in different places. his brother ramalinga, who was a stamp-vendor, was in actual occupation of the house. in the year 1948 he was adjudicated an insolvent on his own petition. the official receiver of east tanjore conveyed on 12-12-1952 the right title and interest for the insolvent in the house of the respondent. it appears that even earlier the official receiver had taken possession of.....
Judgment:

S. Ramachandra Iyer, C.J.

1. This appeal has been filed against the judgment of Kunhamed Kutti J. on the strength of certificate issued under Cl. 15 Letters Patent. The appeal arises out of a suit instituted to set aside a summary order in proceedings relating to the delivery of possession of property sold by an Official Receiver. The property in question is a house in Nagapattinam. It was purchased in the year 1910 by Muthukumaraswami Chettiar, who died 8 years later, leaving behind him two sons, Vaidyalinga, the appellant, and Ramalinga. The former was employed in the railways and his duties compelled him to lie in different places. His brother Ramalinga, who was a stamp-vendor, was in actual occupation of the house. In the year 1948 he was adjudicated an insolvent on his own petition. The Official Receiver of East Tanjore conveyed on 12-12-1952 the right title and interest for the insolvent in the house of the respondent. It appears that even earlier the Official Receiver had taken possession of the entire house. The purchaser has therefore no difficulty in obtaining an attainment from the tenants.

Vaidyalinga coming to know of this, applied to the Insolvency court under Or. XXI Rule 100 C. P. Code for re-delivery of the property to him but his application was dismissed. He then instituted the present action; purporting to do so under Order XXI Rule 103 C. P. Code, to set aside the summary order, or, in the alternative, for partition and separate possession of his half share in the house Both the trial court as well as the court of appeal accepted his case, for partition holding that what the respondent secured under this sale by the Official Receiver was only a half share which the insolvent possessed. A decree for partition and separate possession of a half share in the houses was granted in favour of the appellant. On second appeal by the respondent. Kunhamed Kutti J. set aside that decree on the ground that inasmuch as the order of the insolvency court on the re-delivery application filed by the appellant had become final, there having been no appeal as provided for in S. 75 of the Provincial Insolvency Act (hereinafter referred to as the Act), the present suit should be held to be barred by res judicata.

(2) Before proceeding consider the correctness of that view, we may point out that what the appellant sought and what was negative in the application for redelivery was possession of the entire house. We do not see how, even assuming that here was a final adjudication against the appellant of his right to possession of the entire house, his claim for partition and separate possession of a half share therein could beheld tot be barred by res judicata. It is, however, unnecessary to pursue that point, as we are not prepared to share the view taken by the learned Judge as to the effect of the order of the Insolvency Court on the application for redelivery of possession.

(3) In Sinna Subba Goundan v. Rangai Goundan, : AIR1946Mad141 Chandrasekhara Aiyar J. held that in a case where the Insolvency Court gave a final decision n a question of title, a mere direction by that court superadded tot hat decision that another proceeding could be taken for finally adjudicating the title, would not make the adjudication any-the-less binding on the parties. Kunhamed Kutti J. has relied on this decision to support his view that the dismissal of the appellant's application for redelivery by the insolvency court would have the effect of finally negating his right to the suit property. Let us first look into the facts of that case. On the insolvency of a Hindu father, his properties were sold by the Official Receiver. The purchaser was obstructed by the sons of he insolvent when he went to take delivery of possession of the properties. The Insolvency Court ordered the removal of the obstruction after deciding that the property sold constituted, the self-acquired property of the father and that the sons had no right thereto. The order, though it was purported to be made on an application under S. 5 of the Act, was however taken up in appeal. There the conclusion of the first Court was affirmed. Appellate Judge, however, added a rider '.......... if the appellants have tot any case they may file a suit'. This appellate order was confirmed on revision by this court.

Subsequently the sons put forward their title in a second litigation. Chandrasekhara Aiyar J. held that in substance, the decision of the insolvency court as well as the appellate and revisional courts must be held to be one under S. 4 of the Act, notwithstanding the fact that in the judgment on appeal liberty was given to the appellants to establish their title in a separate suit. The adjudication in the former case was held to be final and operative as res judicata. In that case, therefore, there was, in substance, an adjudication of the title of the insolvent as against his sons and it was held that the mere fact that the petition was filed under a wrong provision of law would not alter the real character of the adjudication, which should be held to be one under S. 4 of the Act; nor would the liberty clause affect its conclusiveness. The learned Judge observed:

'It is true that the court though that a separate suit would lie and this question of title may be agitated only fully there; but this opinion expressed by the insolvency court cannot affect the rights of parties.'

This is but an enunciation the well-settled rule that a court, while finally adjudicating upon a matter which was properly before it, cannot at the same time, provide the disappointed party liberty to file a fresh suit; to recognise a contrary rule will be destructive of the principle of finality of judicial order. Similarly, it has been held by the court in more than one decision that a court cannot dismiss a suit and at the same time grant the plaintiff liberty to bring a fresh suit on the same cause of action. But this principle cannot apply to a case where there is no final decision, For, there can be no res judicata unless the matter had been finally decided. When, therefore, a court states that it has not finally decided a matter, it will be a misnomer to call it a final decision and then apply the rule of res judicata. This was recognised in Parsotam Gir v. Narbada Gir, ILR 21 ALL 505 . In that case in a form suit between the same parties regarding the claim upon title, which was made in a later suit, there was a decree dismissing the suit; but the judgment stated and that it was left plaintiff to the plaintiff to sue again and that matters affecting the rights of parties could be held to be decided between them. That judgment was pleaded in bar tot he subsequent suit. The Privy Council while pointing out the essential requirements to sustain the plea of res judicata observed:

'It would be a contradiction in terms to say that the court had finally decided matters which it expressly left 'untouched and undecided'

The decision in the previous case therefore was not regarded as a final decision and the plea or res judicata was overruled.

(4) In the present case what the insolvency court purported to decide in the application for redelivery filed by the appellant was, whether redelivery should be ordered. It purported to do so only under Or. 21 Rule 100. It did not decide the question of title finally. The court never proceeded to consider the question of the appellant's rights to possession even as it was not concerned with that question in the summary proceedings. Therefore, such an order can be never be regarded, as either actually or constructively, amounting to a final adjudication of the matter before the Court.

(5) We are unable to accept the contention that inasmuch as the provisions of O. 21 CP. Code will not apply to a sale by Official Receiver every application filed by the purchaser for obtaining delivery (or by the person in possession for obtaining redelivery), should only be regarded as an application under S. 4 of the Act, and adjudication in which would be final and, therefore, not open to be challenged by a suit under Or. 21 Rule 103 C. P. Code. It is true that S. 4 clothes the insolvency court with a power to investigate questions of title and the adjudication in those proceedings would, subject to the provisions as to appeals etc. contained in the Act, be final between the parties. But that cannot mean that every order passed by the Insolvency court would attract the provisions of S. 4 of the Act. Section 5 of the Act states that the insolvency court shall have the same powers and shall follow the same procedure as it follows in the exercise of its original civil jurisdiction.

It is obvious that where the insolvency court does not purport to decide a matter under S. 4 but proceeds only under S. 5 the rues prescribed by the he Civil Procedure Code would apply to its decision. In other words, it would be competent of it to entertain an application under O. 21 Rule 100 of the Civil Procedure Code and any order passed there in should be virtue of that stature be subject to the result of a suit under Rule 103. It has no doubt been broadly stated in some decisions that Or. 21 C.P.C. will not apply to sales by an Official Receiver. But hat does not mean that after a sale has been made by the Official Receiver proceedings cannot be taken for effecting delivery of possession etc., through the insolvency courts under Rules 95 to 102 of Order 21. Indeed it has been authoritatively down that if a purchaser is resisted in obtaining possession, the above mentioned provisions would apply by reason of S. 5 of the Act. In Ramaswami Chettiar v. Ramaswami Iyenngar, ILR 45 Mad 434: AIR 1922 Mad 147 a Bench of the Court took the view that the court of Insolvency could inquire into disputed title and order delivery of an insolvent's property to a purchaser from the Official Receiver, removing the obstruction of a third party.

(6) Thus the jurisdiction to inquire into disputed title will arise by virtue of S. 4 of the Act. Once the court is held to have jurisdiction to adjudicate upon title, it must be conceded that here should be a further power in it to give effect to such adjudication. It is for the latter purpose that S. 5 of the Act arms the court with all the powers of a civil court.

(7) In the case cited above, it s observed that if an order for a warrant of possession was made in favour of the Official Receiver or a purchaser from him, the method of executing the warrant under S. 5 of the Act will be the same as that prescribed for execution of a warrant issued by a civil court. It will, therefore, follow that he procedure prescribed by O. XXI, Rr. 95 to 012 C.P.C. can be invoked inappropriate cases, by the insolvency court. Consequently, if an order is made under anyone of these pervasions, it should be competent to the aggrieved party to file a suit under O. XXI Rule 103, because the very terms of the provisions relating to passing summary order prescribe that such orders will be subject to the result of the suit.

(8) A different note form the one expressed in ILR 45 Mad 434: AIR 1922 Mad 147 was struck in Venkataram v. Chhokkier, ILR 51 Mad 567: AIR 1928 Mad 531 where it was held that the Official Receiver would not be entitle to apply for delivery of possession of property. But a subsequent Full Bench decision has corrected that view. In Vandaraguzhal Achi v. South India Corporation (Madras) Ltd. ILR 1945 Mad 10: AIR 1944 Mad 481 the Full Bench preferred tot follow the view in ILR 45 Mad 434: AIR 1922 Mad 147 to the one expressed in the later case, observing that Ss. 4, 5 and 56 of the Act being wide in their import, would empower the court to give possession to the purchaser of the property sold in insolvency proceedings at the instance of the Official Receiver.

(9) The jurisdiction conferred by Ss. 4 and 5 is distinct: the former provision will apply where the court purports to adjudicate finally the title of a person and the latter provision arms the court with certain powers. When, therefore, the court merely assumes the power conferred on it under S. 5 it cannot be said that it has proceeded to decide the dispute finally under S, 4. In every case therefore it has to be seen whether the was an adjudication within the provisions of S. 4 or, whether there was merely a summary order passed under any of the powers vested in the insolvency court by virtue of S. 5 of the Act.

(10) Mr. V. S. Ramakrishnan has referred us to certain decisions where orders of a court were held to be not appealable. In Narsingji Deosthan, v. V. D. Bhake. AIR 1938 Nag 320 as sale held by the Official Receiver under the directions of court was held to be not an act for the receiver so as to confer on he party a right of appeal under S. 68 of the Act. Again in Nathuram v. Madan Gopal : AIR1932All408 an attachment of properly effected by an order of the insolvency court was held not to amount to a decision with in the meaning of S. 68 of he Act, so as to be capable of an appeal. These decisions, in our opinion, which turned on the question whether a particular order was that of the court to merely an act f the Official Receiver have no bearing upon the question to be decided in the present case. In Pandu v. Waman, there was an adjudication under S. 4 of the Act and Court directed the objector deliver possession under S. 56(3). The court observed that S. 5 would not apply to cases where there is an order under S. 56(3). That proceeds on the well known principle that where there is a specific provision in the Act itself for executing orders of the Insolvency court, like the one contained in S. 56(3) there will be no need for the exercise of the powers of the Civil Court under S. 5. It was consequently held that he procedure prescribed by the Civil Procedure Code would be apply to such proceedings.

(11) But it is obvious that where there is no such special procedure prescribed under the Provincial Insolvency Act that court can invoke its powers under the Civil Procedure Code. There is ample authority for this. By way of example we may refer to Ramnad District Central Co-operative Bank v. Official Receiver, Ramnad, : AIR1954Mad12 where it was recognised that the insolvency court has the same powers as a civil Court under S. 5 of the Act; it would be competent for it therefore to grant an injunction in appropriate and justifiable cases.

(12) It would follow form what we have said above, that where the has been an adjudication of title under S. 4 of the Act. The order of the insolvency court would-be final and operate as res judicata in any subsequent dispute between the same parties. But its is not obligatory on the insolvency court to decide disputed questions of title always. For example it will be open to it, in appropriate cases, to refer the parties to a separate suit, or it may pass such orders as it may like for the moment, taking advantage of the powers conferred on it under S. 5 of the Act. If the latter course were to be adopted, its orders would-be liable to the challenged by proceedings in the manner permitted by the statute. The question in every case will therefore ultimately resolve in to this namely, whether there has been an adjudication, in substance, by the insolvency court as regards the title of the rival claimants. In the determination that question, the court will not be influenced by the caption put upon the order. The substance has got to the looked into.

(13) Coming to the present case, it is evident that the insolvency court did to purport to decide the title between the appellant and the respondent. It declined to grant the appellant redelivery possession under its summary powers. That order cannot be deemed to negative the title of the appellant to the property. What the court was then concern was only as to who was in possession at the date of delivery thereof. The suit by the appellant for partition and separate possession of his half share would therefore be maintainable.

(14) The appeal therefore succeeds and is allowed with costs.

(15) Appeal allowed.


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