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Akella Ramasomayyagulu and ors. Vs. the Official Receiver, Godavari Rajahmundry - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in92Ind.Cas.249
AppellantAkella Ramasomayyagulu and ors.
RespondentThe Official Receiver, Godavari Rajahmundry
Excerpt:
.....act (v of 1920), section 11 - hindu father adjudicated insolvent--objection of sons to sale, by receiver--order for sale without deciding rights of parties, whether proper. - securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of..........they applied to the lower court for stay of sale advertised to be held on 29th august 1924 by the official receiver of godavari on the ground that they were divided from the insolvent and that their shares should not be sold. the learned judge has not considered the question whether the shares of the appellants are liable to satisfy the debts of the insolvent. he has allowed the official receiver to sell the insolvent's interest in the property leaving it to future litigation to determine the rights of the parties. we consider in a case like this it is not proper that the insolvent's property should be sold when there is a cloud on the title which could be removed by a proper proceeding under section 4 of the provincial insolvency act. we, therefore, set aside the order and direct the.....
Judgment:

1. The appellants are the sons of the insolvent. They applied to the lower Court for stay of sale advertised to be held on 29th August 1924 by the Official Receiver of Godavari on the ground that they were divided from the insolvent and that their shares should not be sold. The learned Judge has not considered the question whether the shares of the appellants are liable to satisfy the debts of the insolvent. He has allowed the Official Receiver to sell the insolvent's interest in the property leaving it to future litigation to determine the rights of the parties. We consider in a case like this it is not proper that the insolvent's property should be sold when there is a cloud on the title which could be removed by a proper proceeding under Section 4 of the Provincial Insolvency Act. We, therefore, set aside the order and direct the District Judge to restore the application to file and treat it as an application under Section 4 of the Act and dispose of it according to law. The Official Receiver has the power under the Act to sell the shares of the sons of the insolvent and it would be for the son's to make out that their shares are not bound to liquidate the debt contracted by their father.

2. Costs of this appeal will abide the result.


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