The main legal point established in the judgment is the competency of the court to adjudicate insolvency, the impact of false statements on jurisdiction, and the treatment of fraud in procuring an order of adjudication.

Krishnaswumi Ayyangar, J.

1. This appeal arises out of an interpleader suit instituted by one S. Ramaswami Aiyar who has since been discharged from the suit by the judgment under appeal. This Ramaswami Aiyar purchased the joint family properties belonging to the respondent Ganesa Aiyar and his father Swaminatha Aiyar under a sale deed, dated 17th April, 1920, for a consideration of Rs. 23,000. Ramaswami Aiyar agreed to discharge the debts of the family to the extent of Rs. 18,000. He was allowed to retain the balance of the consideration, namely, Rs. 5,000 in view of the fact that the respondent was at the time a minor. The arrangement was that the money should be paid to the father on his furnishing security in the sum of Rs. 7,500 within one year but if he failed to do so, the money could only be claimed after the minor attained majority and executed a release deed in favour of the purchaser. This sum of Rs. 5,000 remaining in the hands of the purchaser as the unpaid balance of the purchase money was the subject-matter of the interpleader suit in the Court below. The learned Subordinate Judge has held that the money in Court belonged to the respondent and his father in equal shares and while giving a decree in favour of the respondent for a moiety has directed the other moiety to remain in Court till the expiry of nine months from the date of the decree so that the decree-holder in O.S. No. 121 of 1923 on the file of the District Munsifs Court, Tiruvarur, might have sufficient time to put his decree into execution and obtain orders thereon.

2. Certain other facts have to be referred to in order to understand how the matter came into Court. In O.S. No. 121 of 1923 on the file of the District Munsifs Court, Tiruvarur, a creditor, of the first respondents father instituted a suit for the recovery of a certain sum of money from him. The suit was dismissed by the District Munsif but on appeal his judgment was reversed and a decree was passed in favour of the creditor for Rs. 1,389. Execution was taken out for the recovery of the money and the first respondents father was arrested. He was released on 3rd November, 1928, on furnishing security and undertaking to obtain an order from the High Court staying the execution of the decree. He made the application for stay but it was dismissed. On 22nd November, 1928, he came to Madras and filed his own petition for being adjudicated an insolvent in this Court. The next day, namely, 23rd November, 1928, he was adjudicated. Thereafter the Official Assignee took out an application for payment to him of the unpaid purchase money remaining in the hands of the purchaser, namely, Rs. 5,000, but the application was dismissed by the order of the Court, dated 27th March, 1930, as one not properly falling within the purview of Section 7. This order was confirmed by the appellate Court on 26th February, 1932. The obvious course for the Official Assignee was to take steps to realise the money but for reasons which are not known, he chose to sell the outstanding. At the sale held by the Official Assignee the decree-holder in O.S. No. 121 of 1923 purchased the outstanding in the name of his son Ramaswami Aiyar under Ex. XI. This sale was on 20th December, 1932. Ramaswami Aiyar in his turn assigned his right to recover the money to the appellant Nageswara Aiyar on 2nd February, 1939. There were thus conflicting claims to this sum of money both by the assignee and by the respondent. The purchaser was obliged to file the interpleader suit so that the title to the money may be decided in the presence of the two contesting parties. The money was deposited in the Court below pending the suit.

3. Several contentions were raised in the Court below and they are covered by Issues 16 in number which have been framed by the Subordinate Judge. On one point alone the learned Subordinate Judges finding is in favour of the respondent. That point is covered by Issue No. 5 and raised the question whether the order