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Kuppu Boyan and anr. Vs. Sengottaiyan - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberC.R.P. No. 1348 of 1982
Judge
Reported inAIR1983Mad314; (1983)1MLJ193
ActsProvincial Insolvency Act, 1920 - Sections 28(2) and 52; Code of Civil Procedure (CPC), 1908 - Sections 47
AppellantKuppu Boyan and anr.
RespondentSengottaiyan
Appellant AdvocateS. Palaniswami, Adv.
Respondent AdvocateP.V. Balakrishnan, Adv.
Cases ReferredPonnudurai v. Kumaraswami Mudaliar
Excerpt:
- - 20/3 moolakurichi village measuring 3.93 acres with a well and pumpset. it may be by staying his hand and postponing the sale, the property might not fetch a fair price at a subsequent sale and it will be more advantageous to have an immediate sale and get a fair price and even though he may be deprived of the fruits of the execution, he will be entitled to get a fair dividend by reason of the property fetching a good price......insolvency petition.'this decision also makes it clear that just because the judgment-debtor has filed an insolvency petition before the insolvency court, it cannot be said that the execution proceedings should be stayed. in this case, it was not stated that the properties of the petitioners were taken by the official receiver in pursuance of the order of the insolvency court, nor the order of the insolvency court was brought to the notice of the executing court. under these circumstances, i am of the view that the unreported judgment of fakkir mohammed, j. in c. r. p. no. 2050 of 1981 d/- 23-12-1981, relied on by the learned counsel appearing for the petitioners, does not apply to the facts of this case nor does it lay down any law on this aspect. following the earlier decision of.....
Judgment:
ORDER

1. The order of the learned District Munsif, Rasipuram in R. E. A. 156 of 1982 in R. E. P. 301 of 1981 in O. S. 635 of 1972 is questioned in the above revision.

2. It appears from the facts of the case and also as argued by the respective counsel appearing for the parties, that the respondent herein filed O. S.635 of 1972 before the District Munsif's Court, Namakkal, against the petitioners therein. The second petitioner is the wife of the first petitioner. The plaintiff, who is the respondent herein obtained a decree against the petitioners, who were the defendants in the suit, for a sum of Rs. 5,000/- on 12-6-1972. In pursuance of the decree obtained by the plaintiff E. P. 301 of 1981 was filed before the executing Court to attach and to sell the property belonging to the judgment-debtors situate in S. No. 20/3 Moolakurichi Village measuring 3.93 acres with a well and pumpset.

The judgment-debtors having received the notice of the execution petition filed R.E.A. 156 of 1982, wherein they contended that they have filed I. P. 9 of 1982 before the Sub Court, Namakkal to adjudge them as insolvents on the ground that they are unable to pay the debts of the pressing creditors. It was also contented by the judgment-debtors that they have also filed I. A. 31 of 1982, for the appointment of an interim Receiver of the properties mentioned in I. P. of 1982. It was also contended in the affidavit filed by the first petitioner herein that orders have been passed in the Receive petition on 9-3-1982 and that the said order was communicated to the Official Receiver, Salem. Under the circumstances, the judgment-debtors-petitioners herein sought post-ponement of the sale of the property.

3. The executing Court, after going through the affidavit and the counter-affidavit filed by the parties, passed the following order:-

'Heard both sides. No notice or order recorded for Official Receiver. Hence this petition is dismissed.'

It is this order of the executing Court that is assailed in the above revision petition.

4. Learned counsel Mr. S. Palaniswami appearing for the petitioners, contends that when once the judgment-debtor brings to the notice of the executing Court that he has filed a petition for insolvency and that orders have been passed, it is the duty of the executing Court to stop further action in the execution proceedings. Reliance is placed by the learned counsel for the petitioners on an unreported judgment of Fakkir Mohammed J. in C. R. P. No. 2050 of 1981, Kandaswami Gounder v. P. Kandasami dated 23-12-1981, wherein the learned Judge has observed:-

'Therefore it will not be conducive in the interest of both the decree-holder and the judgment- debtors to proceed with the sale of the property once the judgment-debtors filed the insolvency petition which has been admitted in this case. In the circumstances, the adjudication proceedings have to be expedited and till suitable orders are passed in the insolvency petition, the sale of the property has to be deferred and if sold, the confirmation of the sale has to be deferred.'

It is on the strength of this observation, learned counsel appearing for the petitioners contends that this revision has to be allowed and the order of the executing Court is erroneous.

5. This Court in Venkatasivayya v. Suryanarayanan, 48 MLW 279: AIR 1938 Mad 906 considered the powers of the executing Court enjoined under Ss. 28(2), 51 and 52 of the Provincial Insolvency Act. Venkataramana Rao, J. has held that:

'Section 52 directing the Court to deliver the property to be sold to the Receiver in the insolvency did not apply in the absence of an application in that behalf by the Receiver.'

The learned Judge, dealing with Sec. 28(2) of the Act pointed out that on the making of an order of adjudication, the whole of the property of the insolvent vests in the Court or in an Official Receiver appointed by the Court, but until then the property of the insolvent is not divested from him and every creditor is free to have recourse to all available remedies against the debtor for realisation of his debt. It was observed in this decision at page 284-

'I do not see why the mere fact of knowledge of insolvency should preclude the decree-holder from proceeding with the sale of the property. It may be that no order of adjudication would be made at all, and if he should only stay his hand in the meanwhile, some other creditor might also attach the property and completely deprive him of the advantage of his having taken proceedings earlier. It may be by staying his hand and postponing the sale, the property might not fetch a fair price at a subsequent sale and it will be more advantageous to have an immediate sale and get a fair price and even though he may be deprived of the fruits of the execution, he will be entitled to get a fair dividend by reason of the property fetching a good price. Neither in principle nor in reason does it seem to me that notice of insolvency should operate as a bar to a decree-holder proceeding with the sale of the property.'

6. In Ponnudurai v. Kumaraswami Mudaliar : (1971)2MLJ252 , Ramanujam, J. had an occasion to consider the scope of Section 52 of the Provincial Insolvency Act. At page 254 the learned Judge has observed:

'Section 52 will have no application when a Receiver had not been appointed in respect of the insolvents properties. So an executing Court, while executing a decree passed against the insolvent need not stay its hands merely on the admission of an insolvency petition.'

This decision also makes it clear that just because the judgment-debtor has filed an insolvency petition before the Insolvency Court, it cannot be said that the execution proceedings should be stayed. In this case, it was not stated that the properties of the petitioners were taken by the Official Receiver in pursuance of the order of the Insolvency Court, nor the order of the Insolvency Court was brought to the notice of the executing Court. Under these circumstances, I am of the view that the unreported judgment of Fakkir Mohammed, J. in C. R. P. No. 2050 of 1981 D/- 23-12-1981, relied on by the learned counsel appearing for the petitioners, does not apply to the facts of this case nor does it lay down any law on this aspect. Following the earlier decision of this Court reported in Ponnudurai v. Kumaraswami Mudaliar, : (1971)2MLJ252 , I am of the view that this civil revision petition has no substance and has to be dismissed and it is accordingly dismissed. There will be no order as to costs.

Petition dismissed.


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