IN THE HIGH COURT OF MARAS
V.G. Anantharama Iyer
Versus
Vettath Kuttimalu Kovilamma …
Decided On : 27 February, 1916
Insolvency - Sale of Property - Code of Civil Procedure, Order 21 Rule 90 - Section 47 - Provincial Insolvency Act, Section 34, 35
Fact of the Case:
Abdul Kadir was adjudged an insolvent. The Receiver applied to stay the sale of certain properties, but the sale proceeded. The Receiver then applied to set aside the sale under Order 21 Rule 90 of the Code of Civil Procedure.
Finding of the Court:
The court found that the sale was irregular and should have been set aside as the property had vested in the Receiver after the adjudication order.
Issues: The issues included the applicability of Order 21 Rule 90, the rights of the Receiver after adjudication, and the validity of the sale.
Ratio Decidendi: The court held that the sale should have been set aside as it was irregular and the property had vested in the Receiver after the adjudication order.
Final Decision: The court set aside the sale and allowed the appeal with costs.
1. One Abdul Kadir was adjudged an insolvent on the 17th August 1911. In execution of a decree obtained against Abdul Kadir on the 21st January 1911, certain properties were attached. The Receiver of the Insolvents estate applied to the Subordinate Judge of Calicut on the 2nd March 1912 to stay the sale on the ground that Abdul Kadir had been declared an insolvent. A fresh sale proclamation was issued and the sale was adjourned to the 15th April 1912 on which date the property was sold subject to a mortgage of Rs. 6,119-3-0 in favour of one Ummar Sahib and purchased by the 2nd respondent. On the 19th April 1912 the Receiver applied to the Court under Order 21 Rule 90 of the Code of Civil Procedure to set aside the sale. The Subordinate Judge dismissed the application on the ground, inter alia, that the insolvency proceedings in the District Court related to the insolvency of a firm of which the judgment-debtor was a member and that the property sold was not the property of the firm but the exclusive property of Abdul Kadir, that the auction purchaser was a purchaser in good faith, and that neither Section 47, nor Order 21 Rule 90 of the Code of Civil Procedure had any application. An appeal to the district Court was dismissed, the District Judge holding that Order 21 Rule 90 of the Code of Civil Procedure did not apply as there was no irregularity in publishing or conducting the sale. The District Judge further observed that no application such as is contemplated by Section 35 of the Provincial Insolvency Act had been made by the Receiver.
2. Mr. Narasimha Rao takes the preliminary objection that no appeal lies even if Order 21 Rule 90 of the Code of Civil Procedure under which the application to set aside the sale was made, is applicable : We think that the petition may be taken as having been presented under Section 47 of the Code of Civil Procedure also, though that section was not quoted.
3. Proceedings to set aside sales on the ground of material irregularity or fraud in publishing or conducting the sale involve questions relating to the execution, discharge or satisfaction of a decree and hence fall under both Section 47 and Order 21 Rule 90 of the Code of Civil Procedure. Proceedings to set aside auction sales on any other tenable ground also involve questions relating to execution etc. and hence fall under Section 47 of the Code of Civil Procedure though they may not also fall under Order 21 Rule 90 of the Code of Civil Procedure. We agree with the opinion of Oldfield, J. In Muthiah Chettiar v. Bava Sahib (1914) 27 M.L.J. 605 that an executing court is entitled to set aside a sale on an application under Section 47 of the Code of Civil Procedure and that no separate suit will lie. See also Manasarm v. Nagendra Nath (1912) 16 C.L.J. 557 and Amirchand v. Bakshi Harihar Prosad Singh (1915) 30 M.L.J. 238. It is only where Order 21 Rule 90 applies also (besides Section 47) to the petition to set aside the auction sale that no second appeal lies under Section 100, Civil Procedure Code. But when Section 47 of the Code of Civil Procedure alone is applicable to the petition, the order passed thereon is a decree and a second appeal lies.
4. Moreover, the appellant has also filed a civil revision petition and there can be no doubt that; we have the power to interfere in revision, if it is shown that the Lower Courts have acted with material irregularity in the exercise of their jurisdiction.
5. Mr. Rosario contends (1) that after adjudication no creditor is entitled to proceed against the person or property of the insolvent, and that when it was brought to the notice of the court by the Receiver that the judgment-debtor had been adjudged an insolvent court ought not to have proceeded with the sale; (2) that as a matter of procedure the Receiver in whom the insolvents estate vested on the making of the adjudication order ought to have been made a party to the execution proceedings, and that the sale is bad. Mr. Rosario has ref
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