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IN THE HIGH COURT OF MADRAS
Beasley, C.J.
Padilam Narayanamma and Anr.
Versus
Neti Venkatasomayajulu and Anr.
Decided On : 15.08.1934
Insolvency - Application for Declaration of Benami Transaction - Implied Consent for Leave of Insolvency Court - Summary: The court considered whether an application in insolvency made by a creditor to the District Munsif for a declaration that a certain transaction was benami was barred due to the lack of formal leave of the Insolvency Court as required by Section 28 of the Provincial Insolvency Act. The court inferred that the Insolvency Court must be deemed to have given consent, and therefore, the application under Section 4 was not barred. The order made by the District Judge was upheld, and the appeal was dismissed with costs.
Fact of the Case:
The question was whether an application in insolvency made by a creditor to the District Munsif for a declaration that a certain transaction was benami was barred due to the lack of formal leave of the Insolvency Court as required by Section 28 of the Provincial Insolvency Act.
Finding of the Court:
The court inferred that the Insolvency Court must be deemed to have given consent, and therefore, the application under Section 4 was not barred. The order made by the District Judge was upheld, and the appeal was dismissed with costs.
Issues: The main issue was whether the application in insolvency was barred due to the lack of formal leave of the Insolvency Court as required by Section 28 of the Provincial Insolvency Act.
Ratio Decidendi: The court inferred that the Insolvency Court must be deemed to have given consent, and therefore, the application under Section 4 was not barred.
Final Decision: The order made by the District Judge was upheld, and the appeal was dismissed with costs.
Beasley, C.J.
1. The question in this, appeal is whether an application in insolvency made by a creditor to the District Munsif under Section 4, Provincial Insolvency Act, asking for a declaration that a certain transaction was benami was barred by reason of the fact that leave of the Insolvency Court had not been obtained as provided by Section 28 of the same Act. In the sense that no formal application was ever made to the Insolvency Court under that section and formal leave granted, there was no sanctioning of the presentation of the application, but the District Munsif in the Insolvency Court entertained the application, heard it and proceeded to give a. decision upon it. It was contended before Jackson, J., in second appeal that the Insolvency Court must have impliedly granted its consent. Jackson, J., accepted that contention and thought that leave might be fairly inferred and at the same time observed that, even if it could not be inferred, the point was so technical as not to be worth raising. In my opinion, the fair inference from what took place is that leave of the Court must be deemed to be given and therefore the application under Section 4 was not barred. With regard to the order made by the District Judge, our attention has been called to the observations made by the Judicial Committee in Chockalingam Chetty v. Seethai Achi 1927 P.C. 252. We content ourselves with drawing the attention of the Insolvency Courts, the Official Receivers and the Official Assignee to those observations. The order made by the District Judge need not be set aside. Under these circumstances this appeal must be dismissed with costs (one set). No orders necessary on C. M.P. No. 5644 of 1932.
King, J.
2. I agree.
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