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High Court of Judicature at Madras
R. KARUPPIAH, J.
R. Balamurugan
Versus
Ponnusamy & Others
C.R.P(NPD)No. 2391 of 2009 & M.P.No.1 of 2009
Decided on: 25-07-2014
Provincial Insolvency Act, 1920 - Section 55 - Purchaser of property – Claim of compensation - On a perusal of records reveal that respondents 2 to 4/debtors along with other co-owners executed a sale deed in favour of revision Petitioner/purchaser through a sale deed - First respondent herein had filed a petition against respondents 2 to 4/debtors and also revision Petitioner/purchaser - In above said Insolvency Petition all three debtors did not appear and they remained ex-parte and only revision Petitioner as a purchaser of property contested case - Subordinate Judge passed an order in above said Insolvency - Petition in which declared respondents 2 to 4/debtors as Insolvents but above said court rejected claim in respect of vesting property to official receiver which was purchased by revision Petitioner/purchaser under sale deed prior to filing of the Insolvency Petition - Aggrieved by above said order passed all three debtors/respondents 2 to 4 not preferred any appeal - Only first respondent/creditor preferred an appeal against order in respect of dismissing claim of vesting revision Petitioners property to official receiver - Appellate Court passed decree and judgment and ordered to vest property which was purchased by revision Petitioner to official receiver - Aggrieved by above said decree and judgment passed by appellant Court revision Petitioner/purchaser from debtors and others preferred this Civil Revision Petition – Held, Court may add that Sections 28 and 55 must be read together harmoniously - As already noticed above these Sections are designed and intended to serve different purposes - In Proviso to Section 55 itself there is reference to order of adjudication and presentation of Insolvency Petition are two different events essentially referring to two different dates - When in same proviso legislature consciously made a clear statement as to two different dates they should be given effect to - If intention of Proviso to Section 55 of Act was not to protect even a bona fide transferee for valuable consideration without notice of presentation of Insolvency Petition before an order of adjudication was made legislature could have simply said-any transaction taking place after date of presentation of any Insolvency Petition by or against debtor instead of qualifying transaction that takes place before date of order of adjudication - In this situation said Proviso which is intended to service a definite purpose should be given full meaning and effect - It is not possible to ignore a part of provision namely any such transaction takes place before date of order of adjudication - It stands to reason as well that a bona fide transfer for valuable consideration without knowledge of presentation of Insolvency Petition on date of transfer of property is to be protected - On a careful reading of above said decisions relied on by revision Petitioner reveal that revision Petitioner is a bona-fide purchaser for valuable consideration even prior to filing of Insolvency petition and therefore first respondent is not entitled to above said relief and trial Court has correctly rejected prayer of first respondent that to pass an order to vest petition mentioned property with official receiver - But first appellate court has wrongly set aside above said order and directed to entrust property to official receiver and above said finding is illegal and perverse as rightly pointed out by counsel for revision Petitioner - Therefore above said order passed by first appellate Court is to be set aside and revision Petition is to be allowed - Civil Revision Petition is allowed
This Civil Revision Petition is filed against the decree and judgment made in C.M.A.No.44 of 2007, dated 09.01.2009, on the file of the Additional District Court-cum-Fast Track Court No.II, Salem reversing the order passed in I.P.No.5 of 2004, dated 24.07.2006 on the file of the Subordinate Court, Sankari.
2. For the sake of convenience, the Petitioner/Creditor in I.P.No.5 of 2004 is referred as first respondent. The respondents 2 to 4/debtors in the Petition are referred as respondents 2 to 4. The fourth respondent/purchaser of the property in the petition is referred as revision petitioner hereafter.
3. On a perusal of the records reveal that respondents 2 to 4/debtors along with other co-owners executed a sale deed in favour of the revision Petitioner/purchaser through a sale deed, dated 23.02.2004. On 18.05.2004, the first respondent herein had filed a petition in I.P.No.5 of 2004 against the respondents 2 to 4/debtors and also the revision Petitioner/purchaser. In the above said Insolvency Petition, all the three debtors did not appear and they remained ex-parte and only the revision Petitioner as a purchaser of the property contested the case.
4. The Subordinate Judge, Sankari passed an order on 24.07.2003 in the above said Insolvency
Petition in I.P.No.5 of 2004 in which declared the respondents 2 to 4/debtors as Insolvents but the above said court rejected the claim in respect of vesting the property to the official receiver which was purchased by the revision Petitioner/purchaser under sale deed, dated 23.02.2004 prior to the filing of the Insolvency Petition. Aggrieved by the above said order passed in I.P.No.5 of 2004, all the three debtors/respondents 2 to 4 not preferred any appeal. Only the first respondent/creditor preferred an appeal in C.M.A.No.44 of 2007 against the order in respect of dismissing the claim of vesting the revision Petitioner's property to the official receiver. The appellate Court passed decree and judgment in C.M.A.No.44 of 2007 on 09.01.2009 and ordered to vest the property which was purchased by the revision Petitioner to the official receiver. Aggrieved by the above said decree and judgment, passed by the appellant Court in C.M.A.No.44 of 2007, the revision Petitioner/purchaser from debtors and others preferred this Civil Revision Petition.
5. Heard the learned counsel appearing for the revision Petitioner and respondents and perused the materials available on record.
6. The learned counsel appearing for the revision Petitioner mainly contended that even prior to the filing of the Insolvency Petition in I.P.No.5 of 2004, the revision Petitioner purchased the property in question on 23.02.2004 itself for valuable sale consideration and the trial Court has correctly considered the above said fact and declared the respondents 2 to 4 as solvents but rejected the prayer of the first respondent that to order the petition mentioned property to vest with the official receiver. But the appellate Court has not properly considered the fact that even prior to the filing of the Insolvency Petition, the revision Petitioner had purchased the property for valuable sale consideration and also the appellate Court has not properly considered the legal provisions and wrongly allowed the above said appeal and directed the Petition mentioned property to vest with the official receiver and therefore prayed for to set aside the above said order passed by the appellate Court.
7. Per contra, the learned counsel for the first respondent submitted that the respondents 2 to 4/debtors have not filed any appeal and only the revision Petitioner who is the purchaser from the respondents 2 to 4 alone challenged the findings of the first appellate court and therefore the Civil Revision Petition is not at all maintainable. The learned counsel has further submitted that the revision Petitioner had purchased the property worth about Rs.75 lakhs for minimal value of Rs.39,100/- and also the revision Petitioner has not p
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