Court auction purchaser held as bonafide purchaser.

M. KARPAGAVINAYAGAM, J.

(1) TMT. Janaki Ammal and others, the appellants herein, are the defendants 4 to 11 in the suit. Having lost before both the Courts below, they have filed the second appeal.

(2) S. S. Subramanian, the first respondent herein filed the suit in the year 1981 for redemption of Othi and for mesne profits against one Kandasamy and the appellants. It is the case of the plaintiff that the suit properties originally belonged to one Ramasamy who usufructuarily mortgaged the properties in favour of one Chellappa Mavali in 1962 and the said mortgagee assigned the said mortgage in favour of Kandasamy Chettiar, the first defendant. These properties were brought for sale in a suit filed ogainst Ramasamy through the execution proceedings in the year 1966 and the same was purchased by one Thirumalai chettiar in Court auction. After the death of thirumalai Chettiar, the defendants 2 and 3, the heirs of Thirumalai Chettiar sold the suit properties in favour of the plaintiff. The plaintiff, the vendee filed the above suit claiming redemption of the mortgage.

(3) IT is the case of the defendants that the court auction sale in favour of Thirumalai chettiar was not valid, since the same was made during the pendency of the insolvency proceedings. As the properties vested with the official Receiver pursuant to the insolvency proceedings, the sale in favour of Thirumalai chettiar is not valid and binding pursuant to the provisions of the Provincial Insolvency Act. It is further contended by the defendants that the Court auction purchaser was aware of the insolvency proceedings, and as such, the Court auction purchaser is not a bona fide purchaser. The vendee is not entitled for redemption of mortgage and hence, the suit is liable to be dismissed.

(4) ON the basis of the above pleadings, the Trial Court framed necessary issues and passed a decree in favour of the first respondent/plaintiff. Aggrieved by the same, the first defendant and the appellants have filed two separate appeals and the same were dismissed by the Appellate Court by a common judgment. Hence, the first defendant and the appellants filed second appeals in S. A. No. 813 of 1986 and the present appeal respectively.

(5) IT is noticed that the appeal filed by the first defendant/kandasamy Chettia? in S. A. No. 813 of 1986 was dismissed as abated on 7-10-1998, since he was reported to be dead. Therefore, S. A. No. 1930 of 1986 filed by the defendants 4 to 11 alone are taken up for final disposal.

(6) HEARD learned counsel for the parties and also gone through the records including the judgments impugned.

(7) WHEN the second appeal was admitted on 28-11-1986, this Court framed the following substantial question of law :-"whether, on the facts and circumstances of the case, the Court auction sale in favour of Thirumalai Chettiar is not valid?"

(8) IN elaboration of the above substantial question of law, Mr. Srinivasan, learned counsel appearing for the appellants/defendants would contend that both the Courts below missed an important point with reference to the interpretation of Sections 28 (2) and 51 (3)of the Provincial Insolvency Act (hereinafter referred to as "the Act"). According to him, when the insolvency petition was pending and when the properties belonging to the insolvent vested with the Official Receiver, the sale of the properties in Court auction cannot be a valid one, since the same was effected without the leave of the Court. When admittedly the insolvency proceedings were pending when the court auction sale was effected, the subsequent order of adjudication, by which the said ramasamy was adjudged as an insolvent, as per Section 28 (7) of the Act, would relate back and date effect from the date of presentation of the insolvency petition on which it was made, and as such, the Court auction sale is invalid. Even though the said adjudication was subsequently annulled under Section 43 of the Act, the Court by the very same order, directed