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Nidamanuri Satyamma Vs. Official Receiver and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1933Mad917
AppellantNidamanuri Satyamma
RespondentOfficial Receiver and anr.
Cases Referred and Bhola Nath Roy v. Secy. of State
Excerpt:
.....money either to defendant 1 or defendant 2, or to both of them, in order to the purchasing of a share in the mill. the accounts clearly show that some money was deposited by the plaintiff with the defendants, but they do not show for what purpose it was deposited and the indications are that it was not deposited, as the plaintiff contends, for the definite purpose of buying a share in the mill. it is hardly necessary to refer to circumstances of suspicion in a case where evidence has failed but it cannot be overlooked that the plaintiff is closely connected with the defendants and that one of them has been adjudged an insolvent on a petition put in not long after the execution of ex. it was perfectly open to the respondent official receiver to raise the point in the first court, but..........a valid document in the absence of avoidance. the plaintiff is setting up a definite case that the suit share actually belonged to her and had been purchased with her money and ex. a came in by way of a formality, putting into her own name what in fact was already hers, in virtue of a consideration that had passed long before. i must hold in agreement with the learned subordinate judge in the light of what has been discussed above that her whole story has to be disbelieved. then it has been argued, for the first time in this second appeal, that the plaintiff is entitled in any case to a charge, on the share in that it has been bought with money of her own which had been mixed up with the assets of defendant 2 and which money she had entrusted to the defendants for the definite purpose of.....
Judgment:

Bardswell, J.

1. The appeal is by the plaintiff. She sued for a declaration of her title to one-eighteenth share in a rice and oil-mill at Bezwada. Her case is that she contributed money towards the share, that the money was first credited in the name of defendant 2 and afterwards in the name of defendant 1. Defendant 3 is the husband of her sister and defendant 1 is his brother and she says, that as these two defendants are her relations her share was nominally standing in their names, but that on 26th April 1924 she got a release deed from them in respect of her share. Defendants 3 and 4 who are creditors of defendant 2 brought I.P. No. 2 of 1924 of the Sub-Court, Bezwada, to have defendants 1 and 2 adjudicated insolvents. In the end only defendant 2 was declared insolvent and it was held that the release deed, Ex. A was invalid and that defendant 2's estate vested in defendant 5 who is the Official Receiver, Kistna District. The District Munsif decreed the suit in favour of the plaintiff, but on the appeal by the Official Receiver the decree was reversed and the suit was dismissed. The matter is now only one between the plaintiff and the Official Receiver as the suit was given up at an early stage as against the creditors, defendants 3 and 4.

2. On the evidence I think it perfectly clear that the plaintiff did not entrust money either to defendant 1 or defendant 2, or to both of them, in order to the purchasing of a share in the mill. The evidence on the subject is discrepant and, such as it is, is not borne out by the accounts. The accounts clearly show that some money was deposited by the plaintiff with the defendants, but they do not show for what purpose it was deposited and the indications are that it was not deposited, as the plaintiff contends, for the definite purpose of buying a share in the mill. Ex. B, the rough day book of defendant 2, shows that on 9th November 1921 Rs. 331 were credited to the plaintiff as the proceeds of the sale of her jewels; and on the same day Rs. 400 are shown as having been spent 'towards our share in the mill.' The amount thus spent on the share is not noted as having been spent on behalf of the plaintiff while it is considerably more than the amount received on that date on the plaintiff's account. No further sum is shown as having been held for the plaintiff on that date. It is of course impossible to say that an amount of Rs. 400 could have been paid out of an amount of Rs. 331. Another payment of Rs. 200 for the share, which again is not shown in the accounts as having been paid by or for the plaintiff, was made on 3rd September 1922. On 14th November 1921 according to the accounts, Ex. B, the plaintiff had been credited with Rs. 221-12-9 as the sale proceeds of another jewel but there is nothing to connect this credit with the debit over nine months later of Rs. 200 towards the purchase of the share which purchase is entered as being in the name of defendant. 1. A third credit to the plaintiff of Rs. 124 odd was made on 1st July 1922. This too can in no way be connected with the payment of Rs. 200. All then that the account can be relied upon to show is that a total amount of Rs. 676 odd was held to the plaintiff's credit but there is nothing in the accounts by which it is shown or from which it could be inferred that the money was deposited by the plaintiff in order to the buying of a share in the mill. Further the recital in the release deed, Ex. A, differs from what appears in the accounts. According to it the plaintiff gave to defendant 2 Rs. 400 on 10th November 1921 and Rs. 200 on 3rd September 1922 towards her share. These statements are incompatible with the entries in the accounts to which I have referred above.

3. It is the version given by defendant 2 as P.W. 2 that these amounts of Rs. 400 and Rs. 200 were received from the sale proceeds of jewels though from the judgment of the District Munsif he appears to have said that the credit was in his own name. Any way his evidence cannot be accepted as it does not square with the accounts. The plaintiff has said that she gave about Rs. 1,250 to defendant 2 for her share. This story is not supported by the accounts or by Ex. A which refers only to Rs. 600. She says that defendants 1 and 2 executed a promissory note in her favour but no such promissory note has been produced. The whole story then as to the purchase of this share on behalf of the plaintiff is not supported by any evidence to which credit can be given and therefore cannot be accepted. It is hardly necessary to refer to circumstances of suspicion in a case where evidence has failed but it cannot be overlooked that the plaintiff is closely connected with the defendants and that one of them has been adjudged an insolvent on a petition put in not long after the execution of Ex. A. It has also to be remembered that Ex. A was executed to the plaintiff not only by defendant 1 but also by defendant 2. The case for the plaintiff is that the share which the plaintiff claimed was first credited in the name of defendant 2 but that it was afterwards transferred to the name of defendant 1 owing to some rule of the factory. This must have been some time before the entry of the resolution dated 18th April 1923 in Ex. 1, the resolution book. But in spite of this transfer in the name of defendant 1 we find both defendants 1 and 2 executing the release deed, Ex. A. It is represented that defendant 2 was a party to this document as a matter of greater precaution; but still, if he had parted with his interest in the share, there should have been no need for him to have been a party to it and indeed there was no reason why this share should not have been in the name of the plaintiff all along.

4. It has been urged that the Official Receiver has not taken steps to have Ex. A avoided; but this is not a case in which Ex. A can be taken as a valid document in the absence of avoidance. The plaintiff is setting up a definite case that the suit share actually belonged to her and had been purchased with her money and Ex. A came in by way of a formality, putting into her own name what in fact was already hers, in virtue of a consideration that had passed long before. I must hold in agreement with the learned Subordinate Judge in the light of what has been discussed above that her whole story has to be disbelieved. Then it has been argued, for the first time in this second appeal, that the plaintiff is entitled in any case to a charge, on the share in that it has been bought with money of her own which had been mixed up with the assets of defendant 2 and which money she had entrusted to the defendants for the definite purpose of buying a share. Reference is made in this connexion to the Privy Council decision in Official Assignee, Madras v. Krishnaji Bhat , I find that that decision has no application to this case. It was one in which money had been deposited for a specific purpose. Nor has the decision in In re Hallett's Estate, Knatchbull v. Hallett (1880) 13 Ch D 696, any bearing on the facts of the case. In the case now under consideration. I find no evidence that the plaintiff had deposited her money with either defendant for any specific purpose. It was a mere deposit and nothing more.

5. Two legal points have been taken on behalf of the respondent. These it is unnecessary for me to discuss at any length as I hold that the appeal fails on the facts; but I will just refer to them. One is that the suit should be dismissed as leave to the plaintiff for filing it had not been granted under Section 28(2), Prov. Ins. Act. This point was not taken in the Court of first instance though it was taken on appeal and the learned Additional Subordinate Judge held that it must be taken as having been waived. No definite authority has been shown as to whether there could be a waiver in such a case while it has been held in G. Ghouse Khan v. Bala Subba Rowther AIR 1927 Mad 925, and Ponnuswami v. Kaliaperumal, : AIR1929Mad480 , that, if a suit, to bring which permission under Section 28(2) is required, is brought without such permission, the defect cannot afterwards be cured. This however does not deal with the point of waiver in a case such as this. In both cases the objection that no leave had been given was taken at an early stage of the proceedings. With reference to Section 16(2) of the former Prov. Ins. Act, corresponding to Section 28(2) of the present Act the question has been considered at length in Subramanyam v. Narasimham AIR 1929 Mad 323 though in a different connexion. In that decision it was held that the fact that no leave under the section had been obtained did not render a decree passed in such a suit a nullity. It was pointed out that the suit was one which the Court in which it was instituted was competent to try and that the Court had jurisdiction over the parties and that the question whether the suit could be maintained without the leave of the Insolvency Court did not affect the competency of the Court to try the suit but was only a question which might have been raised for determination in the suit. These remarks set out a principle with reference to which the question of waiver can be decided. The point whether leave should have been given ought to have been raised for determination in the suit. It was not raised and a decree was passed which decree was not a nullity. This decision was on appeal from a decision by Phillips, J., which is reported in Narasimham v. Subramaniam : AIR1927Mad201 and in which he held that the objection as to want of leave was a ground of objection to the suit and that as it was not taken it must be deemed to have been waived. I think that this principle must equally apply to a case such as this. It was perfectly open to the respondent Official Receiver to raise the point in the first Court, but he did not choose to do so; and as it was not a question of the original Court having acted entirely without jurisdiction so that its proceedings could in no circumstances be valid, I do not see how it is open to the Official Receiver to raise the point on the appeal and contend that, because of the failure to obtain leave, the suit ought to have been dismissed on that ground alone. As this point is not one on which the decision of this appeal depends, I do not discuss whether the suit was of such a kind as required permission under Section 28(2) for its being brought.

6. The other objection taken is that notice should have been given to the Official Receiver under Section 80, Civil P.C. The learned Subordinate Judge held as to this objection also that it was waived and could be waived; and this view appears to be correct having regard to the decisions in Manindra Chandra Nandi v. Secy. of State (1907)34Cal257 and Bhola Nath Roy v. Secy. of State (1913) 40 Cal 503. The second appeal fails and is dismissed with costs.


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