KOTTAYAM ORIENT BANK LTD Vs. OFFICIAL RECEIVER KOTTAYAM

JUDGEMENT

(1.) This is an appealed by the 2nd counter petitioner in Insolvency No. 6 of 1117 of the Kottayam District Court. One Kymal was adjudicated as insolvent on 29-12-1118 on a petition filed by a creditor on 13-7-1117. Thereafter the official receiver filed an application under S.4, 53 and 54 of the Travancore Insolvency Act 8 of 1108 to set aside Ext. A sale deed dated 13-4-1117 executed by the insolvent in favour of the 1st counter petitioner and also a court sale held on 6-12-1119 in execution of the decree in O.S. No. 552 of 1109 of Kottayam Munsiffs Court. This decree was passed on the basis of a hypothecation bond executed by the insolvent on 24-1-1105 and it is dated

(2.) The lower court came to the conclusion that Ext. A sale deed was executed by the insolvent without any bona fides and without any intention to transfer the title to the property to the vendee and therefore set aside Ext. A; and as regards the court auction sale the lower court found that the receiver was a necessary party to the execution proceedings; and as there was no representation of the equity of redemption at the time when the property was sold in court auction, the court sale was invalid. Therefore, the lower court allowed the petition filed by the receiver.

(3.) In this appeal the main contentions raised are: (1) that Ext. A sale deed is not void, (2) that the court auction purchase by the appellant should not have been declared invalid, and (3) that the Official Receiver should not have been allowed to recover the property as the appellant was a bona fide purchaser in court auction. With respect to the first contention, the counsel submitted that the only conclusion possible on the finding of the lower court is that Receiver was not a necessary party to proceedings in execution, as the title to the property passed under Ext. A to the vendee; and therefore, there was no vesting of the property in the Receiver on the date of the order of adjudication. We are afraid that the appellant has mis-conceived the scope of the finding by the lower court. The finding by the lower court is that Ext. A sale deed was a fictitious document, that the considerations recited therein were non existent, that there was no intention to transfer title to the property and that possession did not pass to the vendee but remained with the insolvent. The actual finding recorded by the lower court is: