Madras High Court
VEERASWAMI,NATRAJAN
Tehmina Dinshaw Tehrani - Appellant
Versus
Official Assignee - Respondent
Decided On : 12/12/1974
PRESIDENCY TOWNS INSOLVENCY ACT, 1909 - SECTION 7 - PROVISO - APPLICATION OF - OFFICIAL ASSIGNEE - SUMMONS - APPEARANCE OF RESPONDENT - MATERIAL OBTAINED - NO NEED TO RESORT TO SECTION 36 - TRANSFER OF PROPERTY ACT, 1882 - SECTION 45(2) - PURCHASE OF PROPERTY IN JOINT NAMES - PRESUMPTION OF JOINT OWNERSHIP - BUILDING CONSTRUCTED ON MORTGAGED PROPERTY - RECITALS IN MORTGAGE DEED - EVIDENCE OF JOINT OWNERSHIP - DIVISION OF PROPERTY ACCORDING TO PROPORTION OF CONTRIBUTION.
Fact of the Case:
The appellant-wife and the insolvent-husband purchased a site in their joint names in 1948. In 1952, they constructed a building on the site by raising a mortgage of Rs. 25,000. The Official Assignee claimed the entirety of the property as exclusively belonging to the insolvent, but the trial court held that the property belonged to the appellant and the insolvent in equal halves.
Finding of the Court:
The court held that the appellant and the insolvent were equally entitled to the site and the building. The court found that there was no evidence to establish that one or the other contributed any particular sum either for the purchase of the site or for the construction of the building. The court also found that the recitals in the mortgage deed showed that the executants treated themselves as joint owners of the property and of the building and borrowed Rs. 25,000.
Issues: 1. Whether the Official Assignee had jurisdiction to proceed with the application under Section 7 of the Presidency Towns Insolvency Act, 1909, in the absence of an agreement between the parties. 2. Whether the property belonged to the appellant and the insolvent in equal halves.
Ratio Decidendi: 1. The proviso to Section 7 of the Presidency Towns Insolvency Act, 1909, contemplates the court and not the Official Assignee. The object of Section 36 mentioned by the proviso to Section 7 is to enable the Official Assignee to gather materials in support of his claim. In the instant case, the Official Assignee had already obtained such material as he could from the appellant by summoning her. Therefore, there was no need for the Official Assignee to resort to Section 36. 2. In the absence of evidence to establish that one or the other contributed any particular sum either for the purchase of the site or for the construction of the building, the second paragraph of Section 45 of the Transfer of Property Act, 1882, is applicable. Therefore, the property purchased belonged in common to both the appellant and the insolvent. 3. The recitals in the mortgage deed showed that the executants treated themselves as joint owners of the property and of the building and borrowed Rs. 25,000. Therefore, one half of this sum of Rs. 25,000 should be taken to have come from the appellant and the other half from her husband.
Final Decision: The appeal was partly allowed. The court held that one half of the site belonged to the appellant and one half of the mortgage money, namely, Rs. 12,500 also belonged to the appellant, with which part the cost of the building was met. This will work out a proportion of 5/7 as belonging to the appellant and 2/7 as belonging to the insolvent. This proportion will be applied to one half of the entirety of the property which is the subject-matter of the appeal.
VEERASWAMI, C.J.:- This is an appeal by the first respondent from a judgment of Planiswamy, J., who held on an application by the Official Assignee that, having regard to the state of evidence as finally recorded, the only finding possible was that the first respondent wife and the second respondent husband who was adjudicated as insolvent by an order dated December 2, 1964, were equally entitled to the site and the building bearing No. 3/2A. College Road, Nugambakkam, Madras. The site was purchased on July 5, 1948, admittedly in the names of both those respondents. The consideration therefor was a sum of Rs. 21,595-11-8. In 1952 a building was constructed at a cost of about Rs. 65,000. Rs. 25,000 out of Rs. 65,000 was raised by a mortgage executed by both of them. Evidence was adduced on both sides to support the exclusive claim to the property made by each of them the 1st respondent and the Official Assignee. Ultimately, on an analysis of the entire evidence, it turned out that neither the appellant, who was the first respondent, nor the second respondent who was the insolvent
represented by the Official Assignee, could establish that one or the other contributed any particular sum either for the purchase of the site or for the construction of the building. It was, in those circumstances, and particularly having regard to the recitals in the mortgage deed, Palaniswamy J. recorded a finding that the property belonged to the appellant and the insolvent in equal halves.
2. Mr. Sivaramakrishnaiah, who appears for the appellant-wife contends that in the absence of an agreement between the parties, the learned Judge had no jurisdiction to proceed with the application under Section 7 of the Presidency Towns Insolvency Act. He relies on the proviso and argues that the mere fact that the appellant had obeyed the summons of the Official Assignee, appeared before him and placed materials before him, would not take the application of the Official Assignee out of the scope of the proviso to Section 7. We are unable to appreciate this contention. It was quite open to the appellant to have refused to appear before the Official Assignee and place any material to his advantage. The proviso contemplates the court and not the Official Assignee. The object of Section 36 mentioned by the proviso to Section 7, is to enable the Official Assignee to gather materials in support of his claim. In such a case the procedure under Section will have to be followed. But, in the instant case, without following that procedure, the Official Assignee had already obtained such material as he could from the appellant. In such circumstances, there was no need for the Official Assignee to resort to Section 36 at all. That being the case, we are of opinion that there was
hardly any occasion for applying the proviso to Section 7 so that the Official Assignee was free to use the material which he had already obtained by sunmmoning the appellant.
2-A. Our attention was invited to Laskshmi v. Official Assignee Madras, ILR (1950) Mad 895 = (AIR 1950 Mad 410) (FB), but in view of what we have said just now, the citation makes no difference to our view.
3. We have been taken through parts of the evidence on record. At the stage of the appeal, it cannot be disposed merely on the basis of burden of proof. In fact, it will have no importance when the entire evidence is before us. We agree with Palaniswamy, J., that the evidence as a whole does not pin-point the source of purchase money for the site. On the one hand, at the time the site was purchased, the insolvent was affluent and was earning. At the same time, his wife, the appellant, was also not impecunious and she too appears to have had some money with her as evident from her issuing cheques and purchasing property in 0otcamund. In such an event, as there is no evidence of a common fund out of which the site could have been purchased and in the absence of evidence also that one or the other exclusively contributed
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