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P.K. Nainar Rowthen Vs. Kuppai Pichai Rowthen and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1929Mad609
AppellantP.K. Nainar Rowthen
RespondentKuppai Pichai Rowthen and ors.
Cases ReferredRajagopala Ayyar v. Ramanujachariar A.I.R.
.....that he believed to have the best' prima facie..........sikkandar bi bi filed in 1912 his petition in insolvency in ramnad. the plaintiff on a sale by the official receiver purchased defendant 1's half-share in the suit properties on 12th january 1920, and got delivery on 17th august 1920. this is the plaintiff's title.2. as regards defendant 3's title, defendant 3 obtained a decree against defendant 2 madhar on a promissory-note executed by his guardian bathummal in discharge of a prior pro-note executed by sikkandar bi bi for the benefit of her grandsons. madhar and the deceased nabob. he brought the property to sale and par-chased it in execution. he is the maternal uncle's son of defendant 1. the decree was in o.s. no. 21 of 1916 and. the sale to him in execution was on 7th july 1917. allapichai was not adjudicated an insolvent till 23rd.....

Odgers, J.

1. This is an appeal by defendant 3. The plaintiff obtained a decree against defendant 1 in Penang. On this judgment he got a decree on 8th March 1911 in the District Court of Ramnad. In execution of this decree the plaint properties were attached. A claim was preferred by one Bathummal, guardian of defendant 2 Madhar who had inherited under a will dated 16th January 1909 properties of his paternal grandmother Sikkandar Bi Bi who derived title to those properties under a sale-deed executed in her favour by her husband, the father of defendant 1 Alla Pichai. The claim was allowed and the plaintiff filed O.S. 16 of 1916 in the Ramnad Court to set aside the claim order and to confirm the attachment at least so far as one half of the properties was concerned as the late Nabob's (the brother of Madhar) half share was inherited by his judgment-debtor, Nabob'3 father, defendant 1 herein Allapichai, and he got a decree. Now the trouble is caused by the fact that Allapichai who as stated has succeeded to the share of his son Nabob' in the properties of Sikkandar Bi Bi filed in 1912 his petition in insolvency in Ramnad. The plaintiff on a sale by the Official Receiver purchased defendant 1's half-share in the suit properties on 12th January 1920, and got delivery on 17th August 1920. This is the plaintiff's title.

2. As regards defendant 3's title, defendant 3 obtained a decree against defendant 2 Madhar on a promissory-note executed by his guardian Bathummal in discharge of a prior pro-note executed by Sikkandar Bi Bi for the benefit of her grandsons. Madhar and the deceased Nabob. He brought the property to sale and par-chased it in execution. He is the maternal uncle's son of defendant 1. The decree was in O.S. No. 21 of 1916 and. the sale to him in execution was on 7th July 1917. Allapichai was not adjudicated an insolvent till 23rd March 1917. The Official Receiver conveyed half the property to the plaintiff, under the impression that as it formed part of the assets of Allapichai he was justified in so doing. The Subordinate Judge held that the rights of defendant 3 were postponed to those of the plaintiff. When defendant 3 bought at the execution sale, the Official Receiver was not brought on to the record.

3. Now the question is, does the Official Receiver's title take precedence over defendant 3's? A passing reference must be made to what happened in the lower Courts. The first Court found that, as Allapichai's wife Ponnammal had been divorced, she ceased to be the mother of Nabob on that account. This was not attempted to be supported in the lower appellate Court or before us. Ponnammal would not of course cease to be the heir of Nabob even though she were divorced, and the heirs to Nabob's half when he died in 1914 would be his father as to two-thirds and his mother Ponnammal as to one-third.

4. As to the other question, the learned Subordinate Judge held apparently two inconsistent views following Lakshma Narasimham v. Jagannadha Rao [1915] 18 M.L.T. 147. The learned Subordinate Judge thought that the creditor i.e., defendant 3, must prove his debt like the other unsecured creditors. But paras. 3 or 4 later on he says that all that is open to defendant 3 to ask is that in the distribution of assets by the Official Receiver his claim should be met in the first instance. I take it we have nothing to do with the last point which is a matter of the ranking of claims of various creditors inter se before the Official Receiver But Mr. K.V. Krishnaswami Iyer's first point before us is that he is not one of the general body of creditors as Allapichai, the insolvent, is indebted to him only through Nabob. But the Subordinate Judge has ruled to the effect that defendant 3 is a personal creditor of the insolvent Allapichai, but that what he ought to have said was that he was a creditor of the share of the estate which fell to Allapichai by inheritance. That, to my mind, opens a somewhat peculiar question, that is to say, that a man's property under circumstances of this sort is held by him in at least two different ways, so that what came to Allapichai by inheritance came to him charged with the duty of paying this debt and that it is to be kept apart and car-marked for that payment even after he becomes insolvent so that in the first instance it does not, at all events, fall into the hands of the Official Receiver so as to be available for the payment of his other debts. The first general observation that arises is that there is no such distinction made in Section 28, Provl. Insol. Act. The whole of the property of the insolvent is to vest in the Court or in the Official Receiver and thereupon becomes divisible among the creditors. The difficulty is caused at least in part by the fact that as I believe is usual in Mahomedan testaments no executor is appointed and this is apparent for instance from Abdul Khader v. Chidambara Chettiyar [1909] 32 Mad. 276, where it was held that each Mahomedan heir takes his share in severalty subject inter se to the liability to discharge his share of the ancestor's debt; whereas of course in the procedure with an executor the legatees take their not shares after the debts etc., have been discharged and the Privy Council in Jafri Begum v. Amir Muhammad Khan [1885] 7 All. 822, held that the devolution on a Mahomedan heir is not contingent upon or suspended till the payment of the debts of a Mahomedan intestate.

5. The debts seem to form no charge on the property inherited by the heir in Mahomedan law but the Privy Council held again in Bazayet Hossein v. Dooli Chund [1879] 4 Cal. 402, that a Mahomedan heir could pass a good title on the sale notwithstanding the debts due by his father and in Abdul Majeeth v. Krishnamachariar [1917] 40 Mad. 243, the learned Judges held that a sale by one heir for the debts of the deceased was not binding on the others and in the case relied on in appeal Lakshma Narasimham v. Jagannadha Rao [1915] 18 M.L.T. 147, the Court held there was no lien or charge on the property in the hands of the Official Receiver where Mahomedan heirs had become insolvents subsequent to the decree against the estate of their ancestors in their hands and the creditors must prove as ordinary creditors. Much reliance was placed on a judgment to which I was a party Nagasubramania Mudali v. Narasimhachariar A.I.R. 1927 Mad. 922 where the legal representatives against whom there was no personal decree could not be adjudicated for a decree debt against the estate of the deceased in their hands. That case does not seem to me to have any bearing on the present and the short point seems to me to be that the estate which Allapichai inherited as well as any other property he possessed vested in the Official Receiver on his insolvency and as the Official Receiver had no notice of the sale to defendant 3 the question arises, does the sale bind him, the Official Receiver? Many cases of mortgages were quoted by Mr. B. Sitarama Rao to the effect that on a mortgage the Official Receiver must come in Devaraja Ayyangar v. Thirumalasami Naidu 32 Ind.Cas. 489; Raghunath Das v. Sundar Das Khetri A.I.R. 1914 P.C. 129, where a sale behind the back of the Official Receiver took place and the respondents acquired no title from the judgment-debtors as the latter's property had vested in the Official Receiver. So Section 16 (4) of the Act, now Section 28 (4), does not enable the mortgagee to bring or continue a suit for foreclosure without the Official Receiver. of., Kala Chand Banerjee v. Jagannadha Marwari .

6. During the pendency of insolvency proceedings no creditors have any remedy against the property of the insolvent Subramania Aiyar v. S.V. Ramakrishna Aiyar A.I.R. 1922 Mad. 335, (a question of vendor's lien); and Rajagopala Ayyar v. Ramanuja Chariar A.I.R. 1924 Mad. 431, is authority for the proposition that if notice is not given of the sale in pursuance of the execution of the decree to a party to whom notice ought to be given the sale is void. Mr. K.V. Krishnaswami Ayyar further argues that as Madhar and Ponnammal, his guardian, had notice there is no necessity to give notice to the Official: Receiver who after all is only one of the legal representatives of the insolvent. No authority has been shown to us for saying that the Official Receiver stands exactly in the same position as an ordinary legal representative. It is obvious that he has powers and duties very different and very much more extensive than the ordinary legal representative. But it is. said that in all the cases quoted where it has been held that the Official Receiver was a necessary party there was no other legal representative brought on as in this case. It is perfectly obvious why notice is necessary to the Official Receiver in a special sense because as the whole right, title and interest of the insolvent's property has after adjudication become vested in the Official Receiver no title by sale or otherwise can be acquired without his concurrence. That is different from the case for instance in Gnanambal v. Veerasami Chetty [1915] 29 M.L.J. 698 where there were several rival claimants to an estate and the decree-holder bona fide selected the one that he believed to have the best' prima facie title.

7. Under those circumstances the Court held the representation was sufficient to validate a sale in execution. But this case is very different and in the absence of direct authority I am not prepared to hold that the presence of the ordinary legal representatives or some of them of the judgment-debtor on the record can excuse the decree-holder from bringing on the Official Receiver after adjudication of the judgment-debtor in insolvency. I think, therefore, with gut expressing any opinion as to whether defendant 3 is entitled to priority over the other creditors of Allapichai that the latter did not take the inheritance of the deceased Nabob in any manner charged with the payment of defendant 3's debt, so that defendant 3 is not entitled on that account to be classed as a secured creditor in the estate of Allapichai himself. I also hold that the Official Receiver having had no notice of the sale to defendant 3, the sale is invalid relying on Rajagopala Ayyar v. Ramanujachariar A.I.R. 1924 Mad. 431. Defendant 3 is, therefore, not entitled to succeed in this second appeal which is dismissed with costs. Memorandum of objections not pressed. Dismissed.

Madhavan Nair, J.

8. I agree and have nothing to add.

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