Assignee of equity of redemption adjudicated insolvent.

This second appeal filed by the appellant-plaintiff arises cut of a suit for redemption of a usufructuary mortgage Exhibit A-1 dated 29th June, 1915. One Kuppuswami Iyengar usufructuarily mortgaged the suit property under Exhibit A-1 to one Varadachariar, the defendant’s father. In pursuance of the mortgage the said Varadachariar and after his death the defendant was in possession of the property. Kuppuswami Iyengar, the mortgagor sold the equity of redemption to the plantiff’s husband under a sale deed Exhibit A-2 dated 20th March, 1919. The plaintiff’s husband however was adjudicated insolvent in I.P. No. 454 of 1929. The said adjudication was annulled under Exhibit B-1 dated 17th August, 1953 but the Court directed the continuance of the vesting of the property in the Official Assignee. Subsequently the insolvent died and his wife has filed the suit for redemption of the mortgage. The plaitiff claimed that she and her predecessors-in-interest are agriculturists entitled to the benefit of Madras Act IV of 1938 and that the mortgage debt has therefore been wiped out under section 9 (A) of the said Act.

2. The suit was resisted by the defendant contending that the equity of redemption continued to vest in the Official Assignee as per the order Exhibit B-1in I.P. No. 454 of 1929 on the file of the High Court, that, therefore, the plaintiff has no right to redeem the mortgage and recover possession. The defendant also pleaded that he has acquired title by adverse possession. He also denied that the plaintiff is entitled to the benefit of section 9 (A) of Madras Act of IV 1938.

3. The trial Court decreed the suit holding that the plaintiff had certainly a right to sue for redemption and possession, that it was always open to the Official Receiver to get back possession from the plaintiff, if she succeeds in this case, that the mortgage debt has not been wiped out under section 9 (A) of Madras Act IV of 1938 as, the plaintiff is not shown to be entitled to the benefits of that Act, and that the defendant has not perfected title to the suit property by adverse possession.

4. On appeal, however, the lower Appellate Court took the view that the plaintiff is not entitled to redeem the mortgage in view of the order of the High Court in Exhibit B-1 in I.P. No. 454 of 1929 vesting the insolvent’s property in the Official Assignee. In this appeal the plaintiff challenges the correctness of the view taken by the lower Appellate Court. Therefore, the only point that arises for consideration is as to whether the plaintiff is entitled, to redeem the usufructuary mortgage, Exhibit A-1 ?

5. The reasoning of the trial Court on this point is this:

"As the Official Receiver did not take any action in the matter and has not intervened so far, the plaintiff certainly has got the right to sue for redemption and possession. It is always open to the Official Receiver to get back possession from the plaintiff, if she succeeds in this case. It is difficult to accept the contention that when the property is vested in the Official Assignee, the insolvent loses all his interest therein".

The lower Appellate Court, however, expressed:

"In this case there is no evidence before us to show that the Official Assignee abandoned the administration of the estate. Had it been shown that the Official Assignee had abandoned the administration it would have been a reason for the right to revert to the estate.

..................................

..................................

.....................

.....................

For, when once a debtor’s estate vests with the Official Assignee, the debtor has no interest in that estate".

Under section 17 of the Presidency Towns Insolvency Act the effect of an order of adjudication is that the property of the insolvent wherever situate shall vest in the Official Assignee and shall become divisible among his creditors. Section 21 of the Act enables the Court to annul the adjudication either on its own motion or on application mad