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The Official Receiver Vs. Kadir Meera HussaIn and ors. - Court Judgment

LegalCrystal Citation
CourtChennai High Court
Decided On
Reported in(1975)2MLJ1
AppellantThe Official Receiver
RespondentKadir Meera HussaIn and ors.
Cases ReferredIn Mahanlal Goenka v. Benoy Krishna Mukherjee and Ors.
- t.n. district police act, 1859 [act no. 24/1859]. section 10 & tamil nadu special police subordinate service rules, rule 14(b), clause (iv) explanation (1); [a.p. shah,c.j., f.m. ibrajhim kalifulla & v. ramasubramanian, jj] rule 14(b),ci.(iv) explanation (1) providing that a person acquitted or discharged on benefit of doubt shall be treated as person involved in criminal case - validity being questioned - held, the impugned rule 14(b) ci.(iv) explanation (1) has been issued in exercise of the power conferred upon the government under the tamil nadu district police act, the criminal city police act and the proviso to article 309 of the constitution., the rule is not assailed on the ground of lack of competence. it is challenged only on the ground that it is violative of articles 14 and..........coimbatore, on 27th september, 1949. on that date, the properties of the insolvent vested in the official receiver. subsequently, lakshminarayana chettiar, the undivided father of insolvent nagamanickam, instituted a suit against the insolvent and the official receiver in o.s. no. 221 of 1951 on the file of the sub-court, coimbatore, for partition and separate possession of his 1/2 share in the joint family properties. it appears that the insolvent son had been carrying on a joint family business in the name and style of 'sri krishna medical house' at dharapuram, till 22nd may, 1947. in the partition suit, a decree was granted by the sub-court and on appeal, the high court modified the decree, the effect of which was that lakshminarayana chettiar was declared entitled to a half share.....

S. Maharajan, J.

1. The Official Receiver, Coimbatore, has preferred this Civil Miscellaneous Second Appeal under the following circumstances.

2. One Nagamanickam Chettiar was adjudged an insolvent in I.P. No. 24, of 1949 on the file of the Sub-Court, Coimbatore, on 27th September, 1949. On that date, the properties of the insolvent vested in the Official Receiver. Subsequently, Lakshminarayana Chettiar, the undivided father of insolvent Nagamanickam, instituted a suit against the insolvent and the Official Receiver in O.S. No. 221 of 1951 on the file of the Sub-Court, Coimbatore, for partition and separate possession of his 1/2 share in the joint family properties. It appears that the insolvent son had been carrying on a joint family business in the name and style of 'Sri Krishna Medical House' at Dharapuram, till 22nd May, 1947. In the partition suit, a decree was granted by the Sub-Court and on appeal, the High Court modified the decree, the effect of which was that Lakshminarayana Chettiar was declared entitled to a half share in the joint family properties; but the debts of the insolvent upto 22nd May, 1947 were held to be binding on the joint family properties including the share of the father. The decree of the High Court in appeal was granted on 6th August, 1958. On 3rd January, 1959. one Janardhana Naidu instituted a suit against Lakshminarayana Chettiar, the father for the recovery of Rs. 6,739 odd on the foot of a promissory note executed by the latter on 1st February, 1956, that is to say, after the severance in status which was effected between the father and the son. Summons was served upon Lakshminarayana Chettiar and on his failing to appear in Court, to contest the suit, an ex parte decree was granted against him on 2nd February, 1959. About a month and ' a half later, that is to say, on 24th March, 1959, the judgment-debtor Lakshminarayana Chettiar died and the decree-holder Janardhana Naidu filed E.A. No. 519 of 1959 in the Sub-Court, Coimbatore, on 12th April, 1959 impleading as respondent Lakshminarayana Chettiar who was already dead and without impleading his legal representative and obtained transmission of the decree to the Erode Sub-Court. On 8th August, 1959. the decree holder filed E.P. No. 113 of 1959 in the transferee Court for the attachment and sale of the properties of Lakshminarayana Chettiar and obtained attachment on 13th August, 1959. At the time when the execution petition was filed Lakshminarayana Chettiar, who was already dead, was shown on record as a living respondent. That continued to be the position even on the date of attachment, i.e., 13th August, 1959- After the attachment was effected, the decree-holder discovered that Lakshminarayana Chettiar was dead. Thereupon, he filed two applications whereby the insolvent was added as the legal representative of the judgment-debtor on 28th September, 1959 and the Official Receiver was also impleaded as a party on 17th December, 1959. Notice was ordered to both of them and was served on both of them. The insolvent remained ex parte. But the Official Receiver entered appearance and filed a counter contending that the execution petition was not sustainable at law, that the debt in respect of which the decree had been obtained was provable only in insolvency, and that as the Official Receiver had not been a party to the suit, the decree was not binding upon him and could not be executed against the estate of the insolvent. Be it noted that at that time the Official Receiver did not raise any objection on the ground that the attachment of the property was itself effected after the death of the judgment-debtor and before his legal representatives were impleaded in the execution petition. Ail the objections of the Official Receiver were overruled by the Erode Sub-Court as per the order dated 9th March, 1960 (Vide Exhibit A-19). Against this order, the Official Receiver preferred an appeal to the District Court of Coimbatore, and the appeal was dismissed with costs as per Exhibit A-2O. Against that order, a Civil Miscellaneous Second Appeal was filed in the High Court and this Court dismissed it with costs (Vide Exhibit A-22). Subsequently, execution was proceeded with in the presence of the Official Receiver and with the insolvent on record as respondents and the properties were sold under the hammer of Court on 16th June, 1960 and purchased by Khadir Meera Hussain, the first respondent in this appeal. It may be noted that he is a third-party-auction-purchaser. Strangely enough, the Official Receiver started another round of proceedings in impeachment of the sale. He filed an application under Order 21, Rule 90, Civil Procedure Code, for setting aside the judicial sale in E.A. No. 404 of 1950 on the file of the Sub-Court, Erode. The objections taken were that the Court-auction was vitiated by material irregularity and fraud in the publication and conduct of the sale, that there was in fact, no proclamation of sale at or near the place of the property, that no sale notice had been issued and that in consequence the property had been sold at an under-value. This was opposed by the decree-holder and the auction-purchaser and after an elaborate inquiry, this petition was dismissed on 31st March, 1965 as per Exhibit B-1. Against this order again, the Official Receiver, Coimbatore, preferred an appeal to the District Judge of Coimbatore, who by his judgment dated 11th July, 1966, dismissed the appeal with costs (Exhibit B-2). Thereafter, the Official Receiver started a third round of litigation by filing a petition under Section 4 of the Provincial Insolvency Act in the Insolvency Court praying for a declaration of his title to the properties that had been sold away in Court-auction after declaring that the decree in O.S. No. 1 of 1959 on the file of the Sub-Court, Coimbatore, was vitiated by fraud and therefore void and that the execution sale in favour of the said void decree was null and void. Curiously enough, this petition was allowed by the Subordinate Judge, Erode. Against the order of the Subordinate Judge C.M.A. No. 158 of 1970 was filed before the District Judge, Coimbatore East, who allowed the appeal but without costs. It is against this judgment that the present Civil Miscellaneous Second Appeal has been preferred.

3. The first question that arises for determination in this appeal is whether the contentions of the Official Receiver are not barred by the principle of res judicata. Be it noted that in E.P. No. 113 of 1959, the Official Receiver appeared in Court and raised all conceivable objections to the executability of the decree and the saleability of the property and all these objections were overruled by three Courts. After the sale was effected he applied for setting aside the sale on the ground that there was fraud and material irregularity in the publication and conduct of the sale. These objections have also been overruled by two Courts (Vide Exhibits B-1 and B-2). Thereupon, the Official Receiver changed the venue of his proceedings from the ordinary civil Court to the Insolvency Court by filing LA. No. 50 of 1964 under Section 4 of the Provincial Insolvency Act just for the purpose of reiterating the very objections which he had raised before the ordinary civil Court and which had been overruled by as many as five Courts. His excuse for resorting to the petition under Section 4 of the Insolvency Act is that he could not either in the execution proceedings while the execution petition was pending, or in the proceedings to set aside the judicial sale raise the objections which he has raised for the first time in this petition. The objection is that at the time when the Execution Petition was filed it was filed against a dead person without his legal representative (insolvent ) or the Official Receiver being impleaded as party to the execution petition and that at the time when the properties were attached there was only a dead judgment-debtor on record without anybody representing his estate. This is a contention which the Official Receiver says he could not raise in the prior two proceedings because he was unaware of the fact that even before the transmission of the decree from the Coimbatore Sub-Court to the Erode Sub-Court the judgment-debtor Lakshminarayana Chettiar had died. Now that the Official Receiver has become wise about the date of death and about the alleged invalidity of the execution petition filed as well as about the invalidity of the attachment effected he has come forward with a petition under Section 4 of the Insolvency Act. Before dealing with the question whether it is open to him to raise this contention, I may say that the failure of the decree-holder in E.P. No. 113 of 1959 to take out notice under Order 21, Rule 22, Civil Procedure Code, does not vitiate the subsequent execution proceedings especially in view of the admitted fact that notice was issued to him under Order 21, Rule 66' Civil Procedure Code, and he appeared in Court and raised contentions which in my view, were unsubstantial and even vexatious. In Chandra Nath Bagchi v. Nabadwip Chandra Dutt and Ors. : AIR1931Cal476 a Division Bench has held that:

Where a notice under Rule 22 has not been issued and the party who is entitled to notice does not in substance get notice and is not given or does not take an opportunity to object to the execution of the decree, the sale which follows will be without jurisdiction in the sense that, even if the sale is to a stranger, the sale will not be binding or valid. But where the parties have been litigating actively with each other upon the question whether an execution should proceed and how it should proceed for a period of more than two years on a notice under Order 21, Rule 66, it would be merely piling unreason upon technicality to hold that it is open to the judgment-debtors to object to the jurisdiction of the Court because they have not got a formal notice to do something, namely to dispute the execution of the decree which in point of fact they were busy disputing in all the Courts for the best part of two years.

In fact, in this case, the Official Receiver has been disputing the decree and the execution proceedings for over a decade. The above authority has been acted upon by a Division Bench of this Court in Shiyali Vengu Chetti v. Valjee Kanjee & Company, Madras : (1935)69MLJ862 . Further, even assuming the sale has been held without any attachment, the -sale could not be void as has been held in S.R. Subramania Aiyar v. L.A. Krishna Aiyar : (1926)51MLJ172 . The sale is not null and void on the ground of want of attachment. Attachment is merely a measure of protection of the decree-holder and the purchasers of the property and the judgment-debtor is not entitled to question a sale on the mere ground that it has not been preceded by attachment. It would thus be found that the ground newly discovered by the Official Receiver is untenable. Even if it were tenable, he would be clearly barred by constructive res judicata from raising those objections. Those are objections which he might and ought to have raised both in E.P. No. 113 of 1959 and in E.A. No. 404 of 1950 which he filed for setting aside the judicial sale. If he failed to raise these pleas he must be deemed to have raised them and the pleas must be deemed to have been negatived by the Courts.

4. In Mahanlal Goenka v. Benoy Krishna Mukherjee and Ors. : [1953]4SCR377 , it has been held as follows:

As the judgment debtor did not raise the present objection either when the decree-holder made a second application for execution in November, 1932 or when the decree-holder applied to the High Court in March, 1933 or in the proceedings for setting aside the sales in 1936, or in the appeals therefrom though several other objections were raised, he was precluded from raising the plea at a later stage on the principle of constructive res judicata. Their Lordships further held that even though the question related to the jurisdiction of the Court, it would not prevent the operation of the rule of res judicata.

5. I have, therefore, little hesitation in holding that the new found plea of the Official Receiver is doubly barred by res judicata and the first appellate Court has rightly held against him. There is little substance in this appeal which will, therefore, stand dismissed with costs throughout.

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