Ratio(s) Decidendi-Executing Court need not stay sale.

The Official Receiver, Chingleput, who failed to have a sale in favour of the second respondent in a Court auction sale held on 4th September, 1967 in E.P.No 594 of 1966 in O.S.No. 92 of 1966 on the file of the District Munsif’s Court, Kanchipuram set aside, is the petitioner herein. One Kumaraswami Mudaliar, the first respondent herein filed a suit against the third respondent and obtained a decree in O.S.No 92 of 1966. In execution of that decree, the decree-holder brought the judgment-debtor’s property to sale. The sale was fixed for 4th September, 1967 On 1st September, 1967 the third respondent judgment-debtor, filed I.P.No. 9 of 1967 and the petition was directed to be published on 4th September, 1967 and actually the petitioner herein was appointed as interim Receiver on 6th September 1967 There was an order adjudicating the judgment-debtor as insolvent on 26th February, 1968. Before the sale fixed for 4th September, 1967 by the executing Court could take place, the judgment-debtor filed an application under section 52 of the Provincial Insolvency Act bringing it to the notice of executing Court that I.P. No. 9 of 1967 has been admitted and asking for the postponement of the sale awaiting disposal of I.P. No. 9 of 1967 The executing Court proceeded to sell the properties on 4th September, 1967 holding that mere filing of an insolvency petition does not take away its jurisdiction to sell the properties in execution of the decree The second respondent herein became the purchaser of the properties in the Court auction.

2. After the sale was held by the executing Court, the petitioner herein filed an application under Order 21, rule 90 to set aside the sale on the ground that the properties have fetched a low price, that the second respondent, the purchaser is the son of the decree-holder and that in any event, the sale held by the, executing Court after the admission of the insolvency petition, I.P.No. 9 of 1967, was invalid. This application was resisted by the decree-holder as well as the auction-purchaser contending that the price fetched was quite fair, that the properties sold were subject to a mortgage for a sum of Rs. 5,000 that the mere filing and admission of an insolvency petition does not take away the jurisdiction of the Court in proceeding with the sale in execution of, the decree against the judgment-debtor and that there are no vitiating circumstances for setting aside the sale. On these rival contentions of the parties, the executing Court considered the following point;

“Whether the sale is liable to be set aside.”

On this point the executing Court held that since the petitioner had been appointed as interim Receiver on 4th September, 1967, the sale held on that date after the property has vested in the interim Receiver is bad in law, and set aside the sale in favour of the second respondent. On appeal, however, the appellate Court found from the records in the insolvency proceedings that the petitioner was appointed as interim Receiver only on 6th September, 1967, that on 4th September, 1967 there was no bar for the executing Court from proceeding with the sale of the properties that the petitioner having been appointed only on 6th September, 1967 he cannot challenge the Court sale held on 4th September, 1967 on the ground that the property sold had vested in him, and that the mere filing and admission of an insolvency petition will not take away the jurisdiction of the executing Court to proceed with the execution against the insolvent’s properties. It is the correctness of the view taken by the lower appellate Court that is being challenged in this revision.

3. In this revision the learned Counsel for the petitioner puts forward a contention that if the admission of an insolvency petition is brought to the notice of the executing Court that is sufficient to oust the jurisdiction of the executing Court to deal with the property of the insolvents According to the learned Counsel section 28(7) read wit