1999 Supreme(AP) 1048

Andhra Pradesh High Court
Judges : C.V.N.SASTRY
Polisetty Gurumurthy - Appellant
Versus
Meda Venkatachalamaiah Setty - Respondent
Decided On : 11-16-99

Headnote:

Civil Procedure Code , 1908 - Section 100 - Provincial Insolvency Act - Section 28 - Section 3 - Agriculturists Relief Act 4 of 38 - Second appeal involves an interesting question of law regarding application of provisions - Second appeal arises out of a suit for foreclosure of a mortgage deed executed by first defendant in favour of plaintiff-appellant for a principal amount of Rs. 5,000/ -. Suit was instituted - Long before institution of suit first defendant-mortgagor filed on file of Sub-Court, Madanapalle for adjudging him as an insolvent - On Official Receiver was appointed as interim Receiver to take possession of properties of first defendant and ultimately an order adjudging first defendant as insolvent was passed - In course of administration of estate of insolvent, Official Receiver sold mortgaged property which is a residential house belonging to insolvent - In said sale, 5th defendant purchased said property subject to mortgage in favour of plaintiff - Sale was duly confirmed by insolvency court - 6th defendant is said to be a subsequent mortgagee - Present suit was instituted in for foreclosure and for sale of mortgaged property impleading mortgagor as first defendant and his undivided sons as defendants 2 to 4, purchaser from official Receiver as 5th defendant and subsequent mortgagee as 6th defendant - First defendant alone filed a written statement which was adopted by defendants 2 to 4 contending inter alia that suit mortgage deed was not fully supported by consideration, that interest was liable to be scaled down in accordance with provisions that he was a small farmer entitled to benefits and as such suit debt shall be deemed to have been discharged - 5th defendant remained ex parte - Sixth defendant also did not file a written statement - Trial Court, while upholding truth and validity of suit mortgage bond and holding all other issues in favour of plaintiff, dismissed suit on sole ground that first defendant is a small farmer within meaning and as such suit debt shall be deemed to have been abated - Same was confirmed on appeal by lower appellate Court - Hence this second appeal by plaintiff – Held , Debtor was adjudged as an insolvent and Official Receiver in whom his lands were vested was getting same cultivated under orders of Court on behalf of debtor - It was held that irrespective of fact that his property was vested in Court or Official Receiver, if his holding is below limit prescribed debtor should be deemed to be cultivating land personally and accordingly he was a small farmer within meaning of act and he is entitled to benefits of act - This case is easily distinguishable from case on hand since in that case property of insolvent was not yet sold by Official Receiver as in our case - Moment property of insolvent is sold by Official Receiver, property ceased to be that of insolvent and he has no subsisting interest whatsoever in same and question of insolvent claiming that he is a small farmer within meaning of Act does not arise - Other case relied on by learned Counsel for first defendant, also is a case where insolvency proceedings were pending and no sale was held by Official receiver - It was held therein that a debtor against whom an insolvency proceeding is pending can still invoke provisions and claim benefits thereunder - This decision also is, therefore, not applicable to case on hand - For foregoing reasons Court have no hesitation in holding that first defendant, who ceased to have any subsisting interest in suit land and whose right of redemption stood extinguished has no right or locus standi to invoke benefit - 5th defendant to whom equity of redemption passed on account of sale in his favour has not chosen to claim benefit of said Act - As such there was no occasion for Courts below to go into this question at all since no personal decree was claimed in suit as against 1st defendant and only a decree for sale of mortgaged property was prayed for - AS regards finding that first defendant was a small farmer within meaning of said Act, though learned counsel for appellant sought to assail said finding on merits, Court do not find any valid grounds to interfere with concurrent finding recorded by two courts below on said question having regard to limitations of a second appeal - This, however, does not make any difference so far as result is concerned in view of my finding that first defendant has no locus standi to invoke benefit of said Act - Appeal is allowed