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1966 Supreme(Mad) 313

Madras High Court
VENKATARAMAN
A.Ramalinga Reddy, Insolvent - Appellant
Versus
Official Assignee, Madras - Respondent
Decided On : 10/10/1966

Advocates:
S. Amudachari, for Applicant; Official Assignee and N. Kotyswara Rao, for Respondent.

The court emphasized the principle of doing substantial justice and extended the jurisdiction to grant further allowance to a discharged insolvent based on the continued proceedings under Section 53 and the active assistance of the insolvent in realizing further assets.

Headnote:

Insolvency - Maintenance Allowance - Court grants further allowance to discharged insolvent for medical treatment and support of family

Fact of the Case:

The insolvent, previously a zamindar, was adjudicated insolvent and granted an order of discharge. He actively assisted in successful proceedings under Section 53 of the Presidency Towns Insolvency Act, resulting in increased funds available with the Official Assignee. The insolvent and his wife were in poor health, requiring medical treatment and support.

Finding of the Court:

The court found that despite the discharge of the insolvent, the proceedings under Section 53 allowed for the realization of further sums, justifying the grant of further allowance under Section 76(2) of the Act. The court emphasized the need for substantial justice to the insolvent and his family, considering their circumstances.

Issues: The main issue was the jurisdiction of the court to grant further allowance to a discharged insolvent under Section 76(2) of the Act.

Ratio Decidendi: The court held that the proceedings under Section 53, which continued after the discharge of the insolvent, justified the extension of jurisdiction to grant further sums for the support of the insolvent and his family. The principle of doing substantial justice and the application of Section 151 C.P.C. were also considered.

Final Decision: The court directed the Official Assignee to pay a sum of Rs. 2500 to the insolvent for the purposes of medical treatment and support for his family.

ORDER :- This is a very unfortunate case where Sri A. Ramalinga Reddy previously a zamindar had to be adjudicated insolvent. He was also granted an order of discharge but allowing some proceedings pending under Section 53 of the Presidency Towns Insolvency Act to continue. Those proceedings were successful, and as a result the sales which were the subject matter of the proceedings were set aside and against the initial amount of Rs. 6736 mentioned in the sale deeds the official Assignee was able to realise a sum of Rupees 24,330. Further sums were also realised from one of the court auction-purchasers by way of mesne profits. The Official Assignee concedes that in all those proceedings the insolvent was diligently assisting him and was mainly responsible for the success of the proceedings. As a result of the enlarged collections, besides the initial dividend of 42 paise in the rupee there are funds now available with the Official Assignee enough to pay the creditors a sum of at least 38 paise in the rupee according to the report of the Official Assignee, though the insolvent would say that 50 paise more could be paid.

2. Unfortunately the insolvent has been a victim of tuberculosis and his wife, Maragathammal, has also had a paralytic stroke. Before the order of discharge this court granted him a sum of Rs. 2750 towards his maintenance and medical expenses. After his discharge a further sum of Rs. 1000 was paid on 28-11-1962 for the medical expenses of the insolvent and his wife. In this application he prays a further allowance of Rs. 2500 for treatment of his tuberculosis which has relapsed and the treatment of his wife. There can be no doubt that the case requires absolutely sympathetic consideration, and the only question which has to some extent troubled me is the question of jurisdiction of this court, which is the translation in other terms of the objection raised by the Official Assignee that this application is not maintainable.

3. Section 76 (2) of the Act says that the court may, from time to time, make such allowance as it thinks just to the insolvent out of his property for the support of the insolvent and his family, or in consideration of his services, if he is engaged in winding up his estate, but any such allowance may at any time be varied or determined by the Court. The objection about the maintainability of the petition seems to be based on the ground that since the insolvent had been discharged, he can no longer be called an insolvent, and, therefore Section 75 (2) will not strictly apply. But that is only a technical view of the matter. The substantial view is that though the insolvent was discharged, the proceedings under Section 53 of the Act were allowed to continue, and it was because of that circumstance the Official Assignee has been enabled to realise further sums. Once we arrive at that position, the principle of Section 75 (2) could well be extended so as to vest jurisdiction in this Court to grant further sums to the insolvent and his family for their support or in consideration of the insolvent's services, particularly when it is conceded that the insolvent actively assisted in the realisation of these further assets after the order of discharge. Section 151 C. P. C. made applicable by Section 90 will also come into play. It is a question of doing substantial justice to the insolvent and his wife. There is also the precedent of this court dated 28th November 1962 though there was no detailed discussion.

4. Accordingly I direct the Official Assignee to pay a sum of Rs. 2500 to the insolvent for the purposes mentioned above.

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