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2020 Supreme(Mad) 1630
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SURESH KUMAR, J.
C. Dayalan – Appellant
Versus
K. Radhakrishnan & Others – Respondents
A. Nos. 127 & 142 of 2008 in I.P. No. 69 of 1998
Decided on : 22-12-2020
Advocate Appeared:
For the Appellant :V. Ayyadurai, Senior Counsel, J. Manoharan, Advocate
For the Respondents: C. Ramesh, K.V. Ananthakrushnan, adv
The revenue records, including patta passbooks, create a statutory presumption of title, which can be rebutted by evidence to the contrary. In the absence of evidence to rebut the presumption of title created by the revenue records, the court will uphold the title of the person in whose name the patta passbook is issued.
Headnote:
PRESIDENCY TOWNS INSOLVENCY ACT - STAY OF AUCTION PROCEEDINGS - THIRD PARTY CLAIM - SURVEY NUMBERS - PROPERTY TITLE - BOUNDARIES - REVENUE RECORDS - RECTIFICATION OF MISTAKES - AUCTION SALE - VALIDITY - JURISDICTION.
Fact of the Case:
The applicant, a third party in an insolvency petition, filed applications under Section 7 of the Presidency Towns Insolvency Act 1909, seeking a stay of auction proceedings initiated by the Official Assignee in respect of certain properties, including survey numbers 396/4B and 396/4A. The applicant claimed ownership of these properties and asserted that they were not part of the insolvent's estate. The insolvent and the Official Assignee contested the applicant's claim, arguing that the properties belonged to the insolvent and were liable to be sold to satisfy the claims of creditors.
Finding of the Court:
The court examined the evidence and documents presented by both parties, including sale deeds, patta passbooks, and revenue records. It noted that there was a discrepancy in the survey numbers and extents of the properties mentioned in various documents, and that this discrepancy had been rectified by the revenue authorities through the issuance of corrected pattas. The court found that the applicant had a valid title to the properties in question and that they were not part of the insolvent's estate. The court also held that the Official Assignee had no jurisdiction to sell the properties as they did not belong to the insolvent.
Issues: 1. Whether the properties in question belonged to the insolvent or to the applicant? 2. Whether the Official Assignee had the jurisdiction to sell the properties?
Ratio Decidendi: The court held that the properties in question belonged to the applicant and not to the insolvent. It relied on the following principles: * The revenue records, including patta passbooks, create a statutory presumption of title, which can be rebutted by evidence to the contrary. * In the absence of evidence to rebut the presumption of title created by the revenue records, the court will uphold the title of the person in whose name the patta passbook is issued. * The Official Assignee has no jurisdiction to sell properties that do not belong to the insolvent.
Final Decision: The court allowed the applicant's applications and stayed the auction proceedings in respect of the properties in question. It also held that the auction sale, if any, conducted in respect of these properties would have no legal effect.
JUDGMENT :
(Prayer in A.No.127 of 2008: Application filed under Section 7 of Presidency Towns Insolvency Act 1909, seeking an order to grant stay of all further proceedings pursuant to auction notice issued by the Official Assignee, High Court, Madras as published in Tamil Daily “Thinathanthi” issue dated 28.03.2008 insofar as it relates to the land comprised in Survey No.396/4B situate in Thirunindravur village, Poonamallee Taluk, Thiruvallur District.
A.No.142 of 2008: Application filed under Section 7 of Presidency Towns Insolvency Act 1909, seeking an order to grant stay of all further proceedings pursuant to the auction notice issued by the Official Assignee in regard to the properties covered in I.P.No.69/1998 as published in Tamil Daily “Thinathanthi” issue dated 27.04.2008 insofar as it relates to the land comprised in Survey No.396/4A of Thirunindravur village, Poonamallee Taluk, Thiruvallur District.)
1. A.No.127 of 2008 has been filed under Section 7 of the Presidency Towns Insolvency Act 1909, seeking an order to grant stay of all further proceedings pursuant to auction notice issued by the Official Assignee, High Court, Madras as published in Tamil Daily “Thinathanthi” issue dated 28.03.2008 insofar as it relates to the land comprised in Survey No.396/4B situate in Thirunindravur village, Poonamallee Taluk, Thiruvallur District.
2. A.No.142 of 2008 has been filed under Section 7 of the Presidency Towns Insolvency Act 1909, seeking an order to grant stay of all further proceedings pursuant to the auction notice issued by the Official Assignee in regard to the properties covered in I.P.No.69/1998 as published in Tamil Daily “Thinathanthi” issue dated 27.04.2008 insofar as it relates to the land comprised in Survey No.396/4A of Thirunindravur village, Poonamallee Taluk, Thiruvallur District.
3. These two applications were filed by the applicant who is the third party in I.P.No.69 of 1998 seeking the aforesaid prayer of stay of all further proceedings pursuant to the auction notice issued by the Official Assignee in regard to the properties covered in I.P.No.69 of 1998 as published in Tamil Daily, Thinathanthi dated 28.03.2008, insofar as it relates to the land comprised in S.No.396/4B of Thiruninravur village, Poonamallee Taluk, Thiruvallur District and with the similar prayer in respect of the auction notice issued by the Official Assignee in regard to the property covered in I.P.No.69 of 1998 as published in Tamil Daily, Thinathanthi, issue dated 27.04.2008 insofar as it relates to the land comprised in S.No.396/4A of Thiruninravur village, Poonamallee Taluk, Thiruvallur District, pending disposal of I.P.No.69 of 1998.
4. The main Insolvency Petition, I.P.No.69 of 1998 was filed by the first respondent Insolvent, who filed the said I.P. as a Debtor Petition under Section 9(1) (f) of the Presidency Towns Insolvency Act (herein after referred to as “the Act”). In the said I.P, this Court, by order, dated 30.07.1998 declared him as Insolvent.
5. Thereafter he filed Schedule Of Affairs, in short “SOA”, where he had disclosed 115 unsecured creditors for a sum of Rs.66,29,098/- and his total liability according to him is Rs.69,87,685.80/- and the assets to the value of Rs.22,16,358.80/-.
6. In this context, it seems that, in the SOA filed on 12.11.1998, the insolvent had disclosed the properties bearing S.Nos.396/3, 396/1, 405/4 and 200/5 to the extent of 1.37 acres.
7. Only pursuant to the said disclosure made by the insolvent in the SOA, the respondent Official Assignee proceeded to bring the property, i.e., S.No.394/4B, which, according to the OA, is 396/3, for auction sale. Accordingly auction notice was issued in the Thinathanthi Tamil Newspaper as stated supra and in that context, the third party applicant, one C.Dayalan has filed the application in A.No.127 of 2008.
8. As per the averments made in the affidavit filed in
