Appln. (I.P.) No.146 of 2015

in

I.P.No.14 of 2012

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Reserved on : 10.08.2023

Pronounced on : 18.08.2023

CORAM

THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE

Appln. (I.P.) No.146 of 2015

in

I.P.No.14 of 2012

The Official Assignee,

High Court, Madras - 600 104.

... Applicant

Vs.

1. Vasavi Communications,

Rep. by its Sole Proprietrix,

K.Narmadha

2. K.Rajeshwara Rao

3.KarthikaKarunakaran

4.K.Karunakaran

... Respondents

PRAYER: Application has been filed under Section 55 of the Presidency

Town Insolvency Act, 1908 read with Order II Rule 1 of Insolvency Rules

to set aside the sale in favour of the respondent Nos.3 and 4 under the sale

deed dated 18.08.2011 registered as Document No.1752 of 2011, SRO

Thyagaraya Nagar and declare the said sale null and void.

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Appln. (I.P.) No.146 of 2015

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I.P.No.14 of 2012

For Petitioner

: Mr.K.Harishankar

For Respondents

: Mr.C.P.G. Yoganand

for R3 and R4

R1 and R2 - Set Ex-parte

ORDER

The issue that arises for consideration in this application filed by the

Official Assignee under Section 55 of the Presidency Town Insolvency Act,

1909 (Hereinafter referred to as "1909 Act") is whether the sale deed dated

18.08.2011 executed by the respondent Nos.1 and 2 (Insolvents) in favour

of the respondent Nos.3 and 4 (purchasers) has been executed in "good

faith" and "for valuable sale consideration".

2. The debtor petition in I.P.No.14 of 2012 was filed by the

respondent Nos.1 and 2 on 14.02.2012 to declare themselves as insolvents.

They were adjudicated as insolvents by this Court on their petition vide

order dated 16.02.2012 and thereafter, they had filed their statements on

12.06.2012.

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Appln. (I.P.) No.146 of 2015

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I.P.No.14 of 2012

3. According to the Official Assignee, the respondent Nos.1 and 2

(Insolvents) had disclosed in their statements to the Official Assignee that a

residential property situated at No.4, Srinivas Apartments, Ground Floor,

Sathulla Street, T.Nagar, Chennai (Hereinafter referred to as "Property")

was sold by them in the year 2011 for a sum of Rs.40,00,000/- to the fourth

respondent.

4. According to the Official Assignee, it was discovered, based on a

valuation report, that the market value of the property as on 18.08.2011 was

Rs.43,90,000/-. However, according to the Official Assignee, in the sale

deed dated 18.08.2011, the property has been conveyed by the respondent

Nos.1 and 2 (Insolvents) to the respondent Nos.3 and 4 (Purchasers) for a

sum of Rs.15,83,200/-.

5. According to the Official Assignee, the sale which is less than two

years prior to the date of adjudication is void and the transfer of property by

the respondent Nos.1 and 2 (Insolvents) was not a transfer made in favour

of the purchasers viz., the respondent Nos.3 and 4 in good faith and for

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Appln. (I.P.) No.146 of 2015

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I.P.No.14 of 2012

valuable consideration.

6. The respondent Nos.1 and 2 (Insolvents) have remained ex-parte in

this application. The respondent Nos.3 and 4, who are the purchasers, have

filed a counter to this application, denying the contentions of the applicant.

They have contended that they are bonafide purchasers, having paid the

valuable sale consideration for the purchase of the property from the

insolvents. According to them, on the basis of the value of the building, the

undivided share of the land, furniture, accessories, modular kitchen, AC,

Television, 15 row cots made of teak wood, the valuable sale consideration

payable to the insolvents was firmed up at Rs.50,50,000/-, which was the

prevailing market rate and the sale agreement dated 18.02.2011 was entered

into for the said price with the insolvents.

7. According to the respondent Nos.3 and 4 (Purchasers), the total

sale consideration of Rs.50,50,000/- comprises of the following:

a) Rs.8,52,200/- was pai