The main legal point established in the judgment is that the reverter of property to the insolvent, following the annulment of adjudication, validates Court sales and proceedings filed without the Insolvency Court's leave, as per the provisions of the Provincial Insolvency Act.

Somayya, J.

1. Defendants 3 and 4 are the appellants The suit properties were originally owned by one Murugappa Chetti. The first defendant purchased them from third defendants guardian on the footing that the third defendant is Murugappas son and the fourth defendant is an alience from the first defendant. The plaintiff claims under a Court sale held in execution of a money decree obtained against the second defendant. His case is that the second defendant was the adopted son of Mrugappa Chetti, the original owner of the property and that the third defendant was not the son of Murugappa. Defendants 1, 3 and 4 danied the second defendants adoption.

2. The lower appellate Court found that the second defendants adoption by Murugappa is true and that the third defendant is the legitimate son of Murugappa. On this finding the plaintiff would be entitled to a half share and defendants 1, 3 and 4 to another half share.

3. But the validity of the Court auction at which the plaintiff became the purchaser is attacked on another ground which has been upheld by the lower appellate Court. It is necessary to state a few facts in order to understand that contention.

4. The second defendant was adjudged an insolvent in I.P. No. 6 of 1928 on the file of the Sub-Court. The first Court did not adjudge him so; but on appeal, C.M.A. No. 72 of 1930, the District Judge adjudicated him an insolvent on 16th February, 1931. The adjudication was annulled on 10th February, 1937.

5. Plaintiff filed a small cause suit S.C. No. 755 of 1933, against the second defendant without obtaining the leave of the Insolvency Court, got a decree, attached the suit properties and brought them to sale. He purchased the suit properties and Ex, A dated 23rd March, 1936, is the sale certificate. To this suit, and the execution proceedings the Official Receiver was not a party.

6. Under Section 28 of the Provincial Insolvency Act no creditor can commence any suit against the insolvent without the leave of the Insolvency Court, and the Court sale would not be binding against the Official Receiver.

7. The adjudication was annulled on 10th February, 1937, under Section 43 of the Act unconditionally without a vesting order under Section 37. So the property reverted unconditionally to the insolvent. The effect of such a reverter is the question in this second appeal. Does the reverter have the effect of wiping out all proceedings from the presentation of the insolvency petition subject only to the exception expressly provided in Section 37 that the intermediate acts of the Court and the Official Receiver and the payments made are valid? Has the reverter the effect of validating the proceedings in the samll cause suit which was filed without the leave of the Insolvency Court?

8. The appellants say that on the date when the suit was filed, it was incompetent. They rely on the decisions of the Court that a suit filed without the leave of the Insolvency Court cannot be validated by the subsequent leave of the Court. It is therefore urged that the subsequent annulment of the adjudication cannot have the effect of validating that which was void in its inception. On the other hand it is urged that once the adjudication is annulled unconditionally under Section 37 of the Act, we have to take it that there never was an adjudication subject only to the exception laid down in Section 37. Stress is laid on the word "reverts" and it is urged that the expression means that the prior state of things is restored and" that consequently the Court sale is valid. This is the view accepted by the lower appellate Court. On a consideration of the authorities cited and on principle, I think this view is correct. The appellants first rely upon the decisions in Cuddappah Ghoiise Khan v. Balasubba Rowther AIR1927Mad925 and other cases which lay down that a suit commenced without the leave of the Insolvency Court is not rendered valid by the subsequent leave of the Court. These decisions, however, do not