Skip to content


Kandasami Chettiar Vs. Jayapandia Athither Nadar and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in101Ind.Cas.78
AppellantKandasami Chettiar
RespondentJayapandia Athither Nadar and ors.
Excerpt:
.....section 28(6) - mortgage suit--mortgagor becoming insolvent pending suit--omission to implead official receiver as party--decree, validity of. - 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 securitisation act is read along with..........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 parry to the mortgage suit and, therefore, the decree passed in 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 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.....
Judgment:

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 parry to the mortgage suit and, therefore, the decree passed in 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 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.' 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.

2. 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. The appellant will have his costs against the 1st respondent.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //