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Chidella Veerayya Vs. Kallam Kotireddi and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1941Mad588; (1941)1MLJ537
AppellantChidella Veerayya
RespondentKallam Kotireddi and anr.
Cases ReferredBaluswami Naidu v. Official Receiver
Excerpt:
- - now, section 75 of the provincial insolvency act clearly provides for a right of appeal to the district court from an order made in the exercise of insolvency jurisdiction by a court subordinate to it, and this provision must be taken to override order 47, rule 7 in so far as it hars a right of appeal from an order rejecting an application for review......of conflict.4. the question next arises whether the order made by the lower court revesting the debtors properties in the official receiver ought to have excluded from its operation the amounts realised by the petitioner after the annulment of adjudication and before the date of such vesting order. prima facie, the order revesting the properties of the insolvents in the official receiver under section 37 could only operate in respect of properties which belonged to the insolvents on the date of that order. section 37 (1) of the provincial insolvency act says:where an adjudication is annulled, all sales and dispositions of property and payments duly made, and all acts theretofore done, by the court or receiver, shall be valid; but, subject aforesaid, the property of the debtor who was.....
Judgment:

Patanjali Sastri, J.

1. This is a petition to revise an order of the District Court, Guntur, whereby it modified on appeal the order of the Subordinate Judge, Bapatla, rejecting an application for review. The petitioner obtained a decree for Rs. 700 against certain persons who were subsequently adjudicated insolvents by the Subordinate Judge. As the insolvents did not apply for their discharge within the period specified by the Court in that behalf, the adjudication was annulled on 31st August. 1936. On the 1st of October, 1936, the first respondent herein claiming to be one of the creditors of the insolvents applied for a review of the order of annulment with a view to have the properties of the debtors revested in the Official Receiver under Section 37 of the Provincial Insolvency Act. The learned Subordinate Judge on objection by the petitioner rejected the application holding that the circumstances of the case did not justify the vesting of the properties in the Official Receiver at that stage. Thereupon, the first respondent preferred an appeal to the Court below and the learned District. Judge allowed the appeal and passed an order vesting the properties of the debtors in the Official Receiver. The petitioner has challenged the validity of this order on the grounds, firstly, that the appeal to the Court below was incompetent, and secondly, that, in any case, the amount realised by the petitioner in execution of his decree against the debtors after the annulment of their adjudication and before the order of the Court below revesting their properties in the Official Receiver could not be affected by such order and should have been excluded from its scope.

2. As regards the first point, petitioner's learned Counsel relies upon the provisions of Order 47, Rule 7, Civil Procedure Code, which provides that an order of the Court rejecting the application for a review shall not be appealable, and argues that, inasmuch as the provisions of the Civil Procedure Code, are made applicable under Section 5 of the Provincial Insolvency Act to proceedings under that Act, the rule referred to above bars an . appeal from the order of the learned Subordinate Judge. But it is to be observed that Section 5 makes the Civil Procedure Code, applicable only subject to the provisions of the Provincial Insolvency Act; that is to say, whenever any provision of the Civil Procedure Code, is in conflict with an express provision in the Provincial Insolvency Act, the latter provision will prevail. Now, Section 75 of the Provincial Insolvency Act clearly provides for a right of appeal to the District Court from an order made in the exercise of insolvency jurisdiction by a Court subordinate to it, and this provision must be taken to override Order 47, Rule 7 in so far as it hars a right of appeal from an order rejecting an application for review. It follows that the appeal to the lower Court was competent.

3. The learned Counsel for the petitioner, however, called my attention to the decision in Manak Ram v. Jugal Kishore A.I.R. 1935 Pat. 177, which no doubt supports his contention. The learned Judges there have taken the view that inasmuch as the power of the Insolvency Court to review its own order is derived only under the provisions of Order 47, Rule 1, Civil Procedure Code, read with Section 5 of the Act, Rule 7 of that order must necessarily govern the exercise of that power. With all respect, I am unable to agree with this reasoning. While it may be true to say that the power of review derived from the provisions of the Code of Civil Procedure could be exercised only subject to the limitations on restrictions imposed by the Code on the exercise of such power it does not follow that the right of appeal from an order made in the exercise of such power is governed by the provisions of the Code when there is a specific provision in the Provincial Insolvency Act itself governing rights of appeal from orders passed by Courts exercising insolvency jurisdiction, and there is clear indication in the Act, that the latter should prevail over the former in case of conflict.

4. The question next arises whether the order made by the lower Court revesting the debtors properties in the Official Receiver ought to have excluded from its operation the amounts realised by the petitioner after the annulment of adjudication and before the date of such vesting order. Prima facie, the order revesting the properties of the insolvents in the Official Receiver under Section 37 could only operate in respect of properties which belonged to the insolvents on the date of that order. Section 37 (1) of the Provincial Insolvency Act says:

Where an adjudication is annulled, all sales and dispositions of property and payments duly made, and all acts theretofore done, by the Court or Receiver, shall be valid; but, subject aforesaid, the property of the debtor who was adjudged insolvent shall vest in such person as the Court may appoint, or, in default of any such appointment, shall revert to the debtor to the extent of his right or interest therein on such conditions (if any) as the Court may, by order in writing, declare.

5. It has been held in this Court in Baluswami Naidu v. Official Receiver, Madura : (1938)1MLJ824 , that an order appointing a person and vesting the debtor's property in such person under Section 37 need not necessarily be made simultaneously with the order of annulment, and can be made even subsequently. But it is clear from that section that unless the Court at the time of the annulment vests the property in a person appointed by it, the property shall revert to the debtor on such conditions as the Court may deem fit to declare. No such vesting order having been made in this case when the adjudication was annulled on 31st of August, 1936 and no conditions having been declared by the Court, the properties of the debtor must be deemed to have reverted to him, and the amount realised by the petitioner by attachment of such property could not be affected by any vesting order subsequently made. It is worthy of note that there is no provision in Section 37 that the vesting of the debtor's property when ordered later should relate back to the date of annulment--cf. Section 28 (5).

6. I hold therefore that the petitioner is entitled to a declaration that amounts realised by him by executing the decree against the debtor's properties after they reverted to him are not affected by the order of the lower Court vesting the debtor's properties in the Official Receiver. The order will be modified accordingly.

7. Each party will bear his own costs of this revision petition.


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