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(Nune) Narasimham Vs. (Donepudi) Subramaniam and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1927Mad201
Appellant(Nune) Narasimham
Respondent(Donepudi) Subramaniam and ors.
Cases ReferredSanyasi Charan Mandal v. Krishnadhan Banerji A. I. R.
Excerpt:
- - it is, i think, clearly obvious that unless this appeal had been valued at less than rs......sues to set aside. the subordinate judge has given the plaintiff a decree on the ground that the decree obtained by the first defendant is null and void. the reasons given by him are that the official receiver was not made a party thereto, that no sanction had been obtained to institute the suit under section 16, clause (2) (b) of the provincial insolvency act and that the decree of the district court in appeal was passed without jurisdiction.2. to take the last point first, i think the subordinate judge's order is wrong. the suit o. s. no. 23 of 1916 was valued at rs. 5,816 and consequently under section 13 of the civil courts act, an appeal would ordinarily lie to the high court. the appeal was, however, filed in the district court and in the memorandum of appeal we find that the.....
Judgment:

Phillips, J.

1. In this case the appellant (first defendant) attached certain properties in execution of a decree obtained against Defendants Nos. 2 to 4 on 22nd June 1915. These properties were actually attached on 25th June 1915, but prior to that, on 24th June 1915, Defendants Nos. 2 and 3 presented an insolvency petition. The plaintiff who had purchased the properties under a sale-deed dated 11th March 1915, put in a claim petition on 28th July 1915, and this was allowed on 8th November 1915. Defendants Nos. 2 and 3 were adjudged insolvents on 16th November 1915, and first defendant filed a suit to set aside the claim order on 31st March 1916, and eventually obtained a decree which the present plaintiff sues to set aside. The Subordinate Judge has given the plaintiff a decree on the ground that the decree obtained by the first defendant is null and void. The reasons given by him are that the Official Receiver was not made a party thereto, that no sanction had been obtained to institute the suit under Section 16, Clause (2) (b) of the Provincial Insolvency Act and that the decree of the District Court in appeal was passed without jurisdiction.

2. To take the last point first, I think the Subordinate Judge's order is wrong. The suit O. S. No. 23 of 1916 was valued at Rs. 5,816 and consequently under Section 13 of the Civil Courts Act, an appeal would ordinarily lie to the High Court. The appeal was, however, filed in the District Court and in the memorandum of appeal we find that the value of the appeal and the value of the suit are given as Rs. 4,000 for purposes of jurisdiction. I am inclined to think that the value was the correct value and not Rs. 5,816 given in the original plaint. Whether that is so or not, under Section 11 of the Suits Valuation Act:

Notwithstanding anything in Section 578 of the Civil P. C., an objection that by reason of the over-valuation or under-valuation of a suit or appeal a Court of first instance or lower appellate Court, which had not jurisdiction with respect to the suit or appeal exercised jurisdiction with respect thereto shall not be entertained by an appellate Court unless, etc.

3. It is now admitted that none of the exceptions would apply. It is, I think, clearly obvious that unless this appeal had been valued at less than Rs. 5,000 the District Judge would not have admitted it and tried it, but we see in the appeal memorandum that not only was the appeal which related to the whole subject-matter of the suit valued at Rs. 4000, but also that it states that the suit itself was valued at Rs. 4,000. I think it is, therefore, clear that it was by reason of the under-valuation that the District Court exercised the jurisdiction. No objection was then taken and, therefore, no objection can be taken in the appellate Court. This is not an appellate Court, but I certainly think that the principle of this section must be extended to collateral proceedings in the same manner as the principle of Section 21 of the Civil P. C. has been held to be applicable to proceedings other than appeals vide Chokkalingha Pillai v. Velayudha Mudaliar A. I. R. 1925 Mad. 117. It has been held by a Full Bench of this Court in Kelu Achan v. Parvathi Nethiyar A. I. R. 1924 Mad. 6 that the mere fact that a party was deprived of the right of appeal on facts before the High Court cannot be held to prejudicially affect the disposal of the appeal on the merits within the terms Section 11 of the Suits Valuation Act. The, respondent relies on Ranjis Missir v. Ramudar Singh 17 C. W. N 116 but that decision is not an authority as it does not refer to Section 11 of the Suits Valuation Act and it is doubtful whether that case would come within that section. This being so the decree of the Court is not void for want of jurisdiction.

4. The other point raised that the leave of the insolvency Court was not obtained under Section 16 of the Insolvency Act is a more difficult question. That section says that after the making of an order of adjudication, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property or the person of the insolvent in respect of the debt or commence any suit or other legal proceedings except with the leave of the Court and on such terms as the Court may impose. The suit by the first defendant did not seek to enforce any remedy against the property or the person of the insolvent, for it was a suit to have it declared that the property belongs not to the plaintiff but to insolvent, and also that it was fit to be attached in execution. The real question is whether the suit comes within the meaning of the provision that the creditor shall not commence any suit or other legal proceedings except with the leave of the Court.

5. It has been definitely held in Vasudeva Kamath v. Nattoji Lakshminarayan Rao [1919] 42 Mad. 684 that a creditor is prevented by Section 16 (2) (b) from instituting without the leave of the Court a suit to set aside a transfer made by the insolvent as being in fraud of the creditors and in Mariappi Pillai v. Raman Chettiar [1919] 42 Mad. 322 it was held that the Official Receiver and nobody else could get a transfer set aside under Section 36 of the Provincial Insolvency Act. It was also held in Easwara Aiyar v. Govindarajulu Naidu [1916] 39 Mad. 689 that no execution of a decree could be taken out after the adjudication. It would thus appear that the first defendant's suit would be barred under Section 16, but it is contended for the appellant that the present suit is not one of the nature contemplated in that section. The appellant was concluded by the order on the claim petition and unless that was set aside, it would become final as between him and the respondent (plaintiff). Even if the Official Receiver were to file a similar suit and obtain a decree, it might be contended by the other creditors that the appellant could not take advantage of such a decree inasmuch as the question as between him and the insolvent and the alienee was res judicata.

6. It is, therefore, argued that the appellant could bring a suit without the leave of the Court. In Phul Kumari v. Ghanshyam Misra [1908] 35 Cal. 202 their Lordships of the Privy Council observe that a suit under Section 283, Civil P. C. (now Order 21, Rule 63) is not only appropriate but the only mode of obtaining review in such cases. The appellant was, therefore, obliged to bring such a suit and it is very doubtful whether an identical suit could be brought by the Official Receiver. It is a suit that asks for no relief against the debtor and the debtor is merely impleaded as a formal party: vide the Official Receiver of Coimbatore v. Palanisswami Chetti A. I. R. 1925 Mad. 1051 where it was held that the Official Receiver was not a representative of a judgment-debtor and that a mortgage suit instituted against the insolvent need not be stayed by reason of the insolvency. The respondents rely on a case in Sanyasi Charan Mandal v. Krishnadhan Banerji A. I. R. 1922 C. 237 but I do not think that the case is applicable here for that was a case of a suit to recover moneys which were alleged to belong to the insolvent. It would be very hard on the appellant to deprive him of his right of a suit as his suit does not seek any remedy against the property of the insolvent, but it is a suit in respect of what is alleged to be the property of the insolvent, and, therefore, it appears to me that it does come within the meaning of Section 16 and that the leave of the Court should be obtained. The question that remains whether the fact that no leave was obtained renders the decree a nullity. It has been held, and consistently held, that a suit instituted without leave can be validated by obtaining leave subsequently, and it is now argued that the fact that no leave was obtained does not of itself render the subsequent decree void. It was a ground of defence in the suit, but it was not taken and must be deemed to have been waived. The Court that tried the suit had jurisdiction to do so and its inherent jurisdiction did not depend upon the leave of the insolvency Court. When, therefore, this question of leave was waived by the defence, I do not think that it can be held that a decree passed after such waiver can be deemed to be a nullity. I may observe that the decree obtained by the appellant only gives him a declaration and that he cannot execute it against the insolvents; but it will be open to the Official Receiver to take action in accordance with such declaration. The fact that the Official Receiver was not a party to the decree cannot make it a nullity; for the only effect of the omission will be that the decree will not be binding on him. I must, therefore, hold that the plaintiff is not entitled to the declaration asked for; and his suit must be dismissed with costs throughout.


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