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C.A.V. Baluswami Naidu Vs. Official Receiver and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1936Mad915; 165Ind.Cas.207
AppellantC.A.V. Baluswami Naidu
RespondentOfficial Receiver and anr.
Excerpt:
.....fact that this point concludes the entire controversy it is not necessary in my opinion to say anything about the other points urged in the lower courts and dealt with in their judgments, and it must not be taken that the opinions expressed thereon by the lower courts are either right or wrong. the petitioners' prayer therefore for a declaration that the official receiver had no power to sell the properties and for an order directing him to refrain from proceeding with the sale of such properties is justified by this single circumstance that the official receiver ceased to have any power to deal with the properties after november 1927; on this ground alone the order of the court below as well as the order of the trial court must be set aside and the appeals allowed......were applications by two decree-holder-purchasers in court auction for a declaration that the official receiver is not entitled to sell the properties purchased by them in court auction and for an injunction restraining him from proceeding with the sale of such properties. the properties were originally the properties of one kandaswami pillai who was adjudged insolvent in i. p. no. 42 of 1922. the order of adjudication was passed on 26th november 1923. the petitions were supported by a variety of allegations and sought to be supported by a variety of arguments, but the most important and vital point was not stated either in the petitions or during the course of arguments in either of the courts below. that vital point is that this order of adjudication had been annulled under.....
Judgment:

Pandrang Row, J.

1. These are appeals from the decrees of the District Judge of Madura, dated 22nd March 1933, in two connected appeals, C. M. A. Nos. 107 and 110 of 1932, which confirmed the orders of the Subordinate Judge of Dindigul dated 9th November 1932, in M. P. Nos. 143 and 196 of 1932, which were applications by two decree-holder-purchasers in Court auction for a declaration that the Official Receiver is not entitled to sell the properties purchased by them in Court auction and for an injunction restraining him from proceeding with the sale of such properties. The properties were originally the properties of one Kandaswami Pillai who was adjudged insolvent in I. P. No. 42 of 1922. The order of adjudication was passed on 26th November 1923. The petitions were supported by a variety of allegations and sought to be supported by a variety of arguments, but the most important and vital point was not stated either in the petitions or during the course of arguments in either of the Courts below. That vital point is that this order of adjudication had been annulled under Section 43, Provincial Insolvency Act, on 11th November 1927, on account of the failure of the insolvents to apply for discharge within time, the time allowed to them having expired on 23rd September 1927. In view of the fact that this point concludes the entire controversy it is not necessary in my opinion to say anything about the other points urged in the lower Courts and dealt with in their judgments, and it must not be taken that the opinions expressed thereon by the lower Courts are either right or wrong. The effect of the annulment of adjudication under Section 43, Provincial Insolvency Act, is that the provisions of Section 37 apply immediately an order of adjudication is annulled. Section 37 of the Act runs as follows:

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.

2. It is now very nearly three years since the present appeals were presented and in the grounds of appeal the point is taken that there was an annulment of adjudication in this case, that there was no order vesting the properties in the Official Receiver, and that, therefore the Official Receiver had ceased to have any right or authority to deal with the properties of the insolvent. Even now the advocate appearing for the Official Receiver is not in a position to state that there was an order vesting the properties in the receiver along with or after the annulment of the adjudication or any order imposing any conditions on the reversion of the estate to the debtor. It must, therefore, be taken that there was no such order and that the Official Receiver had no power or authority to deal with the properties in question after 11th November 1927. It would follow, therefore, that at the time when the petitions were presented, that is to say in 1932, the Official Receiver could have had no authority or right to sell the properties of the insolvent or to take steps for their sale. The petitioners' prayer therefore for a declaration that the Official Receiver had no power to sell the properties and for an order directing him to refrain from proceeding with the sale of such properties is justified by this single circumstance that the Official Receiver ceased to have any power to deal with the properties after November 1927; on this ground alone the order of the Court below as well as the order of the trial Court must be set aside and the appeals allowed. There will be a declaration to the effect that the Official Receiver is not entitled to sell the properties in question, and an order restraining him from proceeding with the sale of such properties. As regards costs the petitioners who are the appellants in these appeals are themselves to blame for not relying on this all-important point either in their petitions or in the arguments advanced on their behalf in either of the Courts below, and they must suffer for this laxity on their part to put before the Court all necessary grounds on which a decision in their favour could be based. The costs therefore in these proceedings in all the Courts will be borne by the parties themselves.


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