An insolvent judgment-debtor has the right to file an appeal against an order in execution of a decree, even after being adjudicated insolvent, if the assets have been realized before the admission of the insolvency petition.

Madhavan Nair, J.

1. The questions referred to the Full Bench are:

(1) Has the judgment-debtor who has been adjudicated an insolvent right to prefer an appeal against an order dismissing an application put in by him under Order 21, Rule 90, Civil Procedure Code, in the course of the execution of the decree passed against him? and

(2) If such an appeal is incompetent in its inception can it be continued if the Official Receiver consents to continue it?

2. This reference has been occasioned on account of the conflict between the decisions in Kondapalli Tatireddi v. Ramachandra Rao (1921) 13 L.W. 616 and Palaniandi Chettiar v. Kalyanarama Aiyar (1926) 97 I.C. 486. In Kondapalli Tatireddi v. Ramachandra Rao (1921) 13 L.W. 616 it was held that the insolvency of a judgment-debtor does not render it incompetent for him to continue the proceedings under Order 21, Rule 72 by way of an appeal. In Palaniandi Chettiar v. Kalyanarama Aiyar (1926) 97 I.C. 486 it was held that a party to a suit after adjudication as an insolvent cannot be deemed to be a person aggrieved by it and has therefore no right to institute an appeal against the decree in the suit.

3. The facts of the case under reference are as follows: - In execution of the decree in O.S. No. 246 of 1926 on the file of the Subordinate Judge of Coimbatore properties belonging to the judgment-debtor were sold on 6th March, 1929 and purchased by the decree-holders. On 4th April, 1929, the judgment-debtor filed an application under Order 21, Rule 90, Civil Procedure Code, to set aside the sale. On 15th October, 1929, he was adjudicated an insolvent on an application filed by a creditor on 26th April, 1929. On 18th October, 1929, the judgment-debtors application to set aside the sale was dismissed by the Court of first instance, but on appeal filed by him on 16th December, 1929, the High Court set aside the sale on 7th October, 1931. The decree-holders then filed a review petition on the ground that when the judgment-debtor filed the appeal to the High Court he had been adjudicated an insolvent and was therefore not competent to prefer the appeal. Notice was then issued to the Official Receiver and he has consented to continue the proceedings.

4. The first question for decision is whether the appeal by the insolvent to the High Court was competent or not. On the facts of the case there is no difficulty in answering this question. The insolvency petition was filed after the properties were sold in Court auction and until the sale is set aside the properties will not vest in the Official Receiver. The Official Receiver has not taken any steps to set aside the sale; and the assets having been realised before the date of the admission of the insolvency petition he cannot even claim the benefit of the execution (vide Section 51 of the Provincial Insolvency Act). It follows therefore that the judgment-debtor whose interests are affected by the sale can not only file an application under Order 21, Rule 90, but also prefer an appeal against the Subordinate Judges order. The respondent relies on Order 22, Rule 8, Civil Procedure Code, in support of his contention that" even when the proceedings had been properly instituted by the insolvent he cannot himself continue them, for if the Official Receiver refuses or neglects to continue those proceedings the Court may make an order dismissing the suit on the defendants application". No doubt this is the view expressed by the learned Judges in Palaniandi Chettiar v. Kalyanarama Aiyar (1926) 97 I.C. 486 ; but it is not noticed in that judgment that Order 22, Rule 12, Civil Procedure Code, makes Rule 8 inapplicable to proceedings in execution of a decree or order. As pointed out in Kondapalli Tatireddi v. Ramachandra Rao (1921) 13 L.W. 616 Order 22, Rule 8 applies to an insolvent-plaintiff and is confined to suits when the events mentioned therein happen. This decision has not been referred to in Palaniandi Chettiar v. Kalyanarama Aiyar (1926) 97 I.C.