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High Court of Judicature at Madras
RATNVEL PANDIAN & SINGARAVELU
S. Arumugham & Others
Versus
C.K. Venugopal Chettiar & Others
Original Side Appeal No. 29 of 1977 & Memorandum of Cross-Objections
Decided On :Decided on: 25-08-1986
PRESIDENCY TOWNS INSOLVENCY ACT, 1909 - SECTION 17, 23(1), 23(3), 30, 52(2)(B) - TRANSFER OF PROPERTY ACT, 1882 - SECTION 2(D), 54 - HINDU SUCCESSION ACT, 1956 - EFFECT OF ADJUDICATION - VESTING OF PROPERTY - REVESTING - TRANSFER BY ORDER OF COURT - REGISTRATION - RIGHT TO SUE FOR PARTITION - PARTNERSHIP BUSINESS - SHARE OF INSOLVENT - FAMILY BUSINESS - DIVISION OF STATUS - SUIT FOR PARTITION - ACCOUNTING.
Fact of the Case:
The plaintiffs and the 2nd defendant are the appellants while defendants 3 to 5 are the Cross-Objectors. The plaintiffs, who are brothers, filed the suit C.S. No. 107 of 1970 for partition and separate possession of their 2/15th share in the suit propertis and for accounting of the family business from defendants 3 and 4.
Finding of the Court:
The plaintiffs and defendants 6 and 7, though not entitled to a share in their fathers share, will be entitled to a fractional share in the property of their grand-father Kothandarama Chetty. Learned counsel for the contesting defendants fairly conceded even before the trial court that the plaintiffs can get a fractional share in the share of Kothandarama Chetty on his death in 1970, under the Hindu Succession Act. It is also conceded that with reference to immovables the properties described as items 1 and 2 in plaint A Schedule, each of the two plaintiffs will be entitled to 23/900th share. It is further conceded that with reference to the jewels belonging to the 1st defendant and described as items 1, 2, 3 and 7 of the B Schedule, each of the plaintiffs will be entitled to 1/15th share. It is made clear that so far as the business is concerned, the plaintiffs and defendants 6 and 7 are not entitled to any share or accounting.
Issues: 1. Whether the order of annulment passed by Clark, J., on 2.9.1947 in I.P. No. 30 of 1946 (Ex. D-7) resulted in the revesting of the properties with the insolvent? 2. Whether the conveyance of the 2nd defendants 1/4th share to the guarantor under Ex. D-8 required registration? 3. Whether the partnership deed entered into between the father and defendants 3 and 4 in 1964 affected the share of the 2nd defendant insolvent?
Ratio Decidendi: 1. On adjudication, the insolvents property vests with the Official Assignee and became divisible among his creditors. The property of an insolvent includes the capacity to sell sons share. If the Court approves the scheme of composition, an order annulling the adjudication shall be made whereupon the property of the debtor shall vest in such person as the Court may appoint and in default revert to the debtor. 2. The transfer of the 2nd defendants 1/4th share to the guarantor under Ex. D-8 was made by order of Court and therefore did not require registration under S. 54 of the Transfer of Property Act since S. 2(d) of the Transfer of Property Act says that nothing in the Transfer of Property Act (except S. 57 and Chapter IV) applies to transfers by orders of Court. 3. The partnership deed entered into between the father and defendants 3 and 4 in 1964 did not affect the share of the 2nd defendant insolvent since it was a family business and there was no division of status.
Final Decision: The appeal preferred by the plaintiffs and the 2nd defendant is dismissed and the Memorandum of Cross-Objections preferred by defendants 3 to 5 it allowed in part modifying the shares of the plaintiffs and defendants 6 and 7 as indicated above. Each party to bear his own costs in the appeal and in the Memorandum of Cross-Objection.
SINGARAVELU, J.
1. The plaintiffs and the 2nd defendant are the appellants while defendants 3 to 5 are the Cross-Objectors. The plaintiffs, who are brothers, filed the suit C.S. No. 107 of 1970 for partition and separate possession of their 2/15th share in the suit propertis and for accounting of the family business from defendants 3 and 4.
2. The averments in the plaint are briefly as follows:— The plaintiffs and defendants 6 and 7 are the sons of the 2nd defendant C. Shanmugham Chettiar. Defendants 3 and
4 are the brothers of the 2nd defendant and they are the sons of one Kothandarama Chettiar, who died in 1970 leaving his widow the 1st defendant Valliammal. The 5th defendant is the son of the 3rd defendant. The plaintiffs and the defendants belonged to a trading family at Madras started by the great grand-father late Egappa Chettiar, who died in about 1920 leaving two sons Kannimuthu Chettiar and Kothandarama Chettiar the plaintiffs and the defendants belonging to Kothandarama Chettiar branch.
3. The plaintiffs and the defendants were members of a Hindu joint family and there was no division of the assets of the family business. The plaintiffs grandfather, Kothandaraman Chettiar died in 1970 whereupon his two younger sons, defendants 3 and 4, assumed charge of the family business excluding their another brother viz., the 2nd defendant and his sons. The business was very prosperous and the family properties are described in the plaint schedules. Defendants 3 and 4, who are in management of the family business, have developed hostile attitude and are acting contrary to the interest of the 2nd defendant and his sons. Hence the suit for partition. The plaintiffs and defendants 6 and 7 are each entitled to 1/5th share. Since the 1st defendant, widow of Kothandarama Chettiar, died during the pendency of the suit, the plaintiffs and defendants 2, 6 and 7 are each entitled to 1/5th share in the suit properties. Defendants 3 and 4, who are in management, are liable to render an account of the assets of the family business as also the rental income from the properties.
4. The 2nd defendant, who is the father of the plaintiffs, and his other sons defendants 6 and 7, sailed with the plaintiffs. Defendants 3 to 5 are the contesting defendants and they have filed a written statement as follows:—
The geneology set up in the plaint is not complete and certain material facts like the prior proceedings in Court have been deliberately suppressed. Subramania Chetty, son of Kannimuthu Chetty (who is one of the sons of late Egappa Chettiar) filed a suit in C.S. No. 236 of 1934 on t he file of this Court for partition of his 1/4th share in the family properties. Final decree was passed in that suit on 3.1.1939. Subsequently, by a deed of partition dated 17.5.1939, Kannimuthu Chettiar (brother of Kothandarama Chettiar and grand-father of the plaintiffs) got himself separated from Kothandarama Chettiar and his sons, defendants 2 to 4.
5. In about 1932, the 2nd defendants viz., the father of the plaintiffs, started a business of his own under the name of C. Shanmugham and Co., and it was his sole and exclusive business. In about 1944, the 2nd defendant started another business of his own in metal scraps in partnership with a third party one A. Appadurai Mudaliar, but huge loss was incurred in that business and a creditor of the firm filed I.P. No. 30 of 1946 on the file of this Court for adjudicating the 2nd defendant herein and A. Appadurai Mudaliar as insolvents. An order of adjudication was passed on 4.11.1946 and the estate of the 2nd defendent vested with the Official Assignees. On account of the said adjudication and the vesting, a division in status was effected and the 2nd defendant and his four sons including the plaintiffs ceased to be coparceners of joint family and they lost all their rights in the family properties. Therefore, the present suit by the plaintiffs for partition is not maintainable.
6. After the said adjudication, Ko
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