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1944 Supreme(Mad) 98

IN THE HIGH COURT OF MADRAS FULL BENCH
Leach, C.J.
S.A. RM. A. Vandarguzhal Achi and Ors.
Versus
South India Corporation Madras Ltd. and Ors.
Decided On : 13.03.1944

The main legal point established in the judgment is the authority of the District Court to order the delivery of possession of property in insolvency proceedings, as per the relevant provisions of the insolvency acts.

Headnote:

Insolvency - Property Possession - Presidency Towns Insolvency Act, Section 126, and Provincial Insolvency Act, Section 77 - Sections 4, 5, and 56, Provincial Insolvency Act

Fact of the Case:

The appellants, family members of an insolvent, contested the delivery of possession of a property sold in insolvency proceedings. The District Court ordered the respondents to deliver possession to the purchaser, leading to the appeal.

Finding of the Court:

The Court held that the District Court had the power to order the delivery of possession of the property to the respondent, as per the provisions of the Presidency Towns Insolvency Act and the Provincial Insolvency Act.

Issues: The key issue was whether the District Court had the authority to entertain the purchaser's application, despite the separation of Burma from India.

Ratio Decidendi: The Court relied on the provisions of the Presidency Towns Insolvency Act, Section 126, and the Provincial Insolvency Act, Section 77, along with Sections 4, 5, and 56 of the Provincial Insolvency Act to determine the authority of the District Court.

Final Decision: The appeal failed and was dismissed with costs of respondent 1. The appellants were entitled to a certificate under Section 205, Government of India Act, 1935.

JUDGMENT

Leach, C.J.

1. Appellant 1 is the wife of one Annamalai Chettiar. Appellants 2, 3 and 4 are their sons. Annamalai was joint with his brothers Muthia alias Ramasami and Chandramouli. They are Nattukottai Chettiars and as a joint family carried on a money lending business in Burma. On 1st April 1933 the adult members of the family were adjudicated insolvents by the Rangoon High Court. On 31st August 1938 that Court, acting under the provisions of Section 126, Presidency Towns Insolvency Act, and Section 77, Provincial Insolvency Act, sent a letter to the District Court of Ramnad requesting it to direct the Official Receiver of that place to render aid to the Official Assignee of Rangoon. Burma was then a part of British India and remained a part of British India until 1st April 1937 when the Government of India Act, 1935, came into force. On receipt of the letter of request the District Judge directed the Official Receiver to render assistance to the Official Assignee of Rangoon as required by Section 77, Provincial Insolvency Act. Acting under this order the Official Receiver took possession of the property which is the subject-matter of this appeal. The property consisted of a house at Kanadukathan. Admittedly it belonged to the family. On 16th December 1988 the Official Assignee of Rangoon sold the house to respondent 1 for the sum of Rs. 42,500. The sale was free of a mortgage which had been created by the insolvents before their adjudication. On 19th September 1933 the Official Assignee had let the house to the wives of the insolvents on a monthly tenancy subject to an undertaking given by them to deliver up the property whenever called upon to do so. The wives of two of the insolvents had issues and the children also lived in this house. Annamalai had four sons, three of whom were minors and Chandramouli one son, who was also a minor. On 5th November 1941 respondent 1 as the purchaser applied to the District Court of Ramnad for an order requiring the wives, the four sons of Annamalai and the son of Chan-dramouli, to deliver up possession of the property. When the purchaser came to take possession the tenants obstructed him and alleged that the sale was not binding on the minors. The application for an order for possession was made under Sections 4, 5 and 56, Provincial Insolvency Act. Belying on the decision of this Court in Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147, the District Judge held that the Court had power to make the order. He rejected a suggestion that the application did not lie by reason of the separation of Burma from British India. The question whether the sale was binding on the minors was left to be decided in separate proceedings should this claim be persisted in. Consequently, the District Judge ordered the respondents to the application to deliver possession to the purchaser. The appeal is from that order. In the first instance the appeal came before Mockett and Bell JJ. who referred it to a Full Bench as Ramaswami Chettiar v. Ramaswami Ayyangar A.I.R. 1922 Mad. 147 was decided by a Division Bench and is in conflict with Venkatram v. Chettier A.I.R. 1928 Mad. 531 which was also decided by a Division Bench. As the Presidency Towns Insolvency Act was in force in Rangoon when the order of adjudication was passed, the insolvents power to sell their sons interests for the satisfaction of their debts devolved on the Official Assignee : Sat Narain v. Beharilal and Sat Narain v. Sri Kishandas Therefore the Official Assignee had the power of conveying a full title to the purchaser of the property, subject to any contention on behalf of the minors that the debts of the fathers had been contracted for immoral or illegal purposes, which has never been suggested. The Official Assignee of Rangoon conveyed to respondent 1 "all estate, right, title, interest, claim and demand of the said S. A. R. M. Chettiar Firm and the mortgagees." The family traded under the vilasam of S. A. R. M. The Offi




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