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B. Belli Gowder Vs. B. Govindan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai High Court
Decided On
Reported in(1970)2MLJ303
AppellantB. Belli Gowder
RespondentB. Govindan and anr.
Cases ReferredVeerappa Chettiar v. Mohammad Mytheen Nana Pillai
Excerpt:
- - it is well established that only creditors who had proved their debts before the official receiver could object to the proceedings taken by the official receiver on the ground that they are not in the interest of the creditors in general......the above i.a. no. 49 of 1966 on the file of the sub-court, ootacamund, on the ground that the sale conducted by the official receiver was vitiated for two reasons (1) that the sale was conducted without notice to him as lessee in possession of the property sold and (2) that there was no sufficient publication so as to attract the highest bid. the ?courts below have taken the view that the petitioner herein is not an aggrieved person so as to entitle him to file an application under section 68 of the provincial insolvency act for setting aside the sale conducted by the official receiver of the insolvent's property that as a lessee he is not entitled to any notice of sale and that as such the petition filed by the petitioner for setting aside the sale was not maintainable. in that.....
Judgment:
ORDER

G. Ramanujam, J.

1. This revision is directed against the appellate order of the Additional District Judge of Coimbatore in C.M.A. No. 389 of 1968 dismissing an appeal filed by the petitioner against the order passed by the Sub-Court of Ootacamund in. I.A. No. 49 of 1966 refusing to set aside a sale conducted by the Official Receiver of the insolvent's property. The petitioner herein was a lessee of the property which was sold by the Official Receiver. The petitioner filed the above I.A. No. 49 of 1966 on the file of the Sub-Court, Ootacamund, on the ground that the sale conducted by the Official Receiver was vitiated for two reasons (1) that the sale was conducted without notice to him as lessee in possession of the property sold and (2) that there was no sufficient publication so as to attract the highest bid. The ?Courts below have taken the view that the petitioner herein is not an aggrieved person so as to entitle him to file an application under Section 68 of the Provincial Insolvency Act for setting aside the sale conducted by the Official Receiver of the insolvent's property that as a lessee he is not entitled to any notice of sale and that as such the petition filed by the petitioner for setting aside the sale was not maintainable. In that view, both the Courts have not gone into the merits of the petitioner's other contentions.

2. In this revision, the learned Counsel for the petitioner vehemently contends that his client's application under Section 68 is maintainable, that an application under Section 68 of the Provincial Insolvency Act can be filed either by the insolvent or by any of the creditors or by any other person and that the petitioner herein will come under the expression 'any other person.', The learned Counsel for the petitioner states that the petitioner was a lessee of the property and was in possession of the same on the date of sale and that he being the person who is likely to be affected by the sale of the property he should be treated as an aggrieved person for the purpose of Section 68 of the Act.

3. I am not in a position to agree with the contention of the learned Counsel. As lessee, the petitioner is entitled to be in possession of the property till the expiry of the lease in his favour. If after the sale of the insolvent's property his possession is sought to be disturbed by the auction-purchaser before the expiry of the lease, he can always move the insolvency Court for suitable directions to protect his possession till the lease in his favour is determined. I am told that the lease in this case was for year to year. If this is so, he could always approach the insolvency Court to defer delivery of possession till the end of the year of the lease. Except that he is interested in retaining possession till the expiry of the lease in his favour, the petitioner has no interest in the insolvent's property or the administration thereof as such. In this case, no creditor has come forward to challenge the sale conducted by the Official Receiver. It is not possible to say that any lessee of the property of the insolvent will be a person aggrieved within the meaning of Section 68 of the Provincial Insolvency Act. On a close reading of Section 68 of the Provincial Insolvency Act, it is seen that ' any other person ' cannot be construed to include any person unconnected with the insolvent's property or its administration. The words ' any other person ' has to be understood in the light of the words following them, that is, ' is aggrieved.' Even if the learned Counsel's contention is accepted that a lessee will come within the scope of' any other person ' in Section 68, it should be further shown that he is aggrieved by the order sought to be challenged by him. As already stated except to protect his position, he is not intrested in the insolvent's property or its administration thereof. It is well established that only creditors who had proved their debts before the Official Receiver could object to the proceedings taken by the Official Receiver on the ground that they are not in the interest of the creditors in general. The petitioner who was not a creditor had no locus standi to file an application under Section 68 of the Provincial Insolvency Act for setting aside the sale conducted by the Official Receiver merely on the ground that he is a lessee likely to be affected by the sale. One other ground that was urged by the petitioner in his petition and by the learned Counsel before me was that the petitioner is ready to purchase the property at a substantially higher price than that for which the property was sold. If this higher offer by the petitioner is taken note of, and the sale is set aside, it will mean that the Court is bound to set aside a sale at the instance of any party who comes forward with a higher bid. Acceptance of any such higher offer and setting aside the auction sale conducted by the Official Receiver on that basis will take away the sanctity of the public auction conducted by the Courts including the Official Receiver and no finality will result. As has been held in Veerappa Chettiar v. Mohammad Mytheen Nana Pillai (1961) 75 L.W. 533, the sale by the Official Receiver should not be lightly set aside because some one offers a higher price. Here the petitioner is not even a creditor but a third party, though a lessee in possession. On the basis of his higher offer made subsequent to the auction sale, it is not possible to set aside the sale conducted by the Official Receiver unless there are other circumstances vitiating the sale itself. In this case, no creditor has come forward complaining that such vitiating circumstance existed in the conduct of the sale by the Official Receiver. In the view I have taken that the petitioner as lessee of the property is not a person aggrieved against the sale of the insolvent's property by the Official Receiver, the petition filed by him under Section 68 of the Provincial Insolvency Act cannot be maintained. The decisions of the Court below are correct and the Civil Revision Petition is dismissed.


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