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1939 Supreme(Mad) 259

IN THE HIGH COURT OF MADRAS
Wadsworth, J.
P.N.M.M. Muthupalaniappa Chettiar
Versus
N.A.R.R.M. Raman Chettiar and Anr.
Decided On : 24.08.1939

The insolvency Court does not have jurisdiction to order re-delivery of possession from the official receiver once possession has been taken, except on an adjudication as to title under Section 4 of the Provincial Insolvency Act.

Headnote:

Insolvency Court - Right to Redelivery - Provincial Insolvency Act, Section 77, Section 56, Section 4

Fact of the Case:

The case involved a dispute over the right of the insolvency Court to entertain an application for redelivery of property sold as the property of the insolvent, after it had been delivered to the purchaser. The petitioner claimed to have been dispossessed and sought re-delivery of the property.

Finding of the Court:

The Court held that the insolvency Court did not have jurisdiction to order re-delivery of possession from the official receiver once possession had been taken, except on an adjudication as to title under Section 4 of the Provincial Insolvency Act.

Issues: The main issue was the jurisdiction of the insolvency Court to entertain an application for re-delivery of property sold as the property of the insolvent, after it had been delivered to the purchaser.

Ratio Decidendi: The Court determined that the insolvency Court's power to assist the official receiver to get possession of the insolvent's property was derived from Section 56 of the Provincial Insolvency Act, and that the proper provision of law governing any adjudication by the insolvency Court of the rights to the property would be Section 4 of the Act.

Final Decision: The appeal was allowed, the order for re-delivery to the petitioner was set aside, and the petitioner was directed to re-deliver the property to the purchaser from the official receiver, who would be entitled to costs throughout.

JUDGMENT

Wadsworth, J.

1. This appeal raises the question of the right of the insolvency Court, after property sold as the property of the insolvent has been delivered to the purchaser, to entertain an application for redelivery by a person alleged to have been dispossessed when holding adversely to the insolvent. The insolvency was one of 1931 in the Court of the District Judge of Amherst, Burma. The insolvency Court sent letters of request to the District Judge of Ramnad under Section 77, Provincial Insolvency Act, seeking the aid of the official receiver of Ramnad in realizing the property of the insolvent. On 28th August 1934, the official receiver, Ramnad, held a sale. A claim was preferred by the present petitioner in the Amherst Court to the property advertised for sale. The claim was based on a sale from his sister-in-law in March 1934, the petitioner having married a daughter of the insolvent. The District Judge, Amherst, asked the District Judge, Ramnad, to investigate this claim. The claim was not pressed by the petitioner and was dismissed. The sale was subsequently confirmed and on 12th February 1936, the official receiver exeouted a sale deed in favour of the appellant. In September 1936, the District Judge of Ramnad, asked the District Judge of Amherst td authorize him to deliver possession of the property to the purchaser. On 25th November 1936, delivery was effected, apparently under the orders of the District Judge of Ramnad to break open a lock. No one appears to have been in physical possession of the property at the time, though the present petitioner contends that he was in notional possession through his tenant who was absent. On 7th December 1936 after delivery had been made to the purchaser the present petition was filed under Order 21, Rules 100 and 101, Civil P.C., and Section 5, Provincial Insolvency Act, praying for re-delivery of the house. A preliminary objection was taken to the jurisdiction of the District Judge of Ramnad to order re-delivery when the insolvency Court was the Amherst Court. That was overruled and the learned District Judge held that the petitioner was in possession at the time of the sale and that delivery having been ordered to the purchaser from a person who was not in possession under the insolvent, the Court must necessarily have power to rectify its own error and he directed re-delivery to the petitioner. Against this order the purchaser appeals.

2. The question of jurisdiction is not without difficulty. All that the letter of request from the District Judge of Amherst authorises the official receiver of Ramnad to do is to take possession and sell the property and send the net proceeds to the insolvency Court. Under Section 77 a letter of request shall be deemed sufficient to enable the auxiliary Court to exercise in regard to the matters directed by the order such jurisdiction as either of such Courts could exercise, in regard to similar matters within their respective jurisdictions. The official receiver has been directed to take possession of the property, sell it, and transmit the net sale proceeds. His jurisdiction is subject to the control, as laid down in the Provincial Insolvency Act, of the District Judge, Ramnad. It may therefore be taken that in so far as the taking possession, selling and transmission of the sale proceeds to Burma are concerned, the District Judge has the same powers of control over the official receiver as he would have exercised, had the insolvency been a local insolvency. But to my mind this does not involve the exercise by the District Judge of Ramnad of a power to conduct the enquiries subsequent to the sale and subsequent to the delivery of possession into claims by third parties who allege that possession was wrongfully delivered.

3. The further contention relates to the power of the insolvency Court to entertain an application for re-delivery when once the sale has been held and possession has been given. I think it is well established that

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