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Kandaswami Chetti Vs. Jayapandia Athitha Nadar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1927Mad609
AppellantKandaswami Chetti
RespondentJayapandia Athitha Nadar and ors.
Excerpt:
- - this is clearly laid down in section 28, clause 6 of the provincial insolvency act. 2. i fail to see how a secured creditor can be prevented from obtaining a final decree by reason of the mortgagor becoming an insolvent in the course of the proceedings......judge of tinnevelly affirming the order of the subordinate judge of tuticorin refusing to pass a final decree in favour of the appellant. the main ground upon which the learned district judge proceeded is that the official receiver was not made a party to the mortgage suit and therefore the decree passed in the appellant's favour is not a valid decree. the preliminary decree was passed in appellant's favour on 20th september 1915. the mortgagor was adjudicated an insolvent on 2nd august 1915. even if the appellant was aware of the adjudication he is not bound under the law to make the official receiver a party to his suit. it was open to the official receiver to come on record if he wished to contest the suit. what the appellant did was to make the official receiver a party at a later.....
Judgment:

Devadoss, J.

1. This appeal is against the order of the District Judge of Tinnevelly affirming the order of the Subordinate Judge of Tuticorin refusing to pass a final decree in favour of the appellant. The main ground upon which the learned District Judge proceeded is that the Official Receiver was not made a party to the mortgage suit and therefore the decree passed in the appellant's favour is not a valid decree. The preliminary decree was passed in appellant's favour on 20th September 1915. The mortgagor was adjudicated an insolvent on 2nd August 1915. Even if the appellant was aware of the adjudication he is not bound under the law to make the Official Receiver a party to his suit. It was open to the Official Receiver to come on record if he wished to contest the suit. What the appellant did was to make the Official Receiver a party at a later stage and the Official Receiver does not seem to have taken any action in the matter, In the case of a mortgagee who has filed a suit against his mortgagor the mere fact that the mortgagor becomes an insolvent, during the pendency of the mortgage suit would not in any way prevent the mortgagee from obtaining his remedy under the law. This is clearly laid down in Section 28, Clause 6 of the Provincial Insolvency Act.

Nothing in this section shall affect the power of any secured creditor to realise or otherwise deal with his security, in the same manner as he would have been entitled to realise or deal with it if this section had not been passed.

2. I fail to see how a secured creditor can be prevented from obtaining a final decree by reason of the mortgagor becoming an insolvent in the course of the proceedings. As I said it is open to the Official Receiver to oppose the passing of a final decree. In this case, though he has been made a party to the application for final decree he has not chosen to object to the passing of it and the learned District Judge was wrong in law in holding that the decree itself was an invalid decree by reason of the Official Receiver not having been made a party to the suit before the decree was passed.

3. In the result, the decree of the District Judge is set aside. The appellant is entitled to have a final decree passed in his favour which I direct to be done.

4. The appellants will have his costs against the 1st respondent.


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