DEVAYANI Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) The matter arises under the Insolvency Act. First revision petitioner is one Devyani and she is no more. Revision Petitioners 2 to 7 are her children. The first revision petitioner is the transferee of the insolvent's property as per sale deed No. 1920/54 of S.R.O., Ernakulam and mortgage deed No. 326/55 of S.R.O., Tripunithura and she is one of the two mortgagees of properties comprised in the said two deeds in favour of one Raphel. All the said three deeds had been executed before the adjudication of the insolvent. After adjudication official receiver filed three petitions, i.e., I.A. No. 189 of 1954 to set aside deed No. 326/55, I.A. No. 190/54 to set aside deed No. 1920/54 and I.A. No. 192/59 to set aside deed No. 1214/54. The three petitions were decided by a common order, setting aside the said documents on the ground of insufficiency of consideration as against the official receiver for the benefit of creditors.

(2.) Some of the properties comprised in the above documents were sold by the official receiver colluding with the son of insolvent second respondent and the purchasees respondents 3 to 5 playing fraud upon court and causing substantial injury to the estate of the insolvent and the said properties were sold as per four sale deeds in favour of respondents 3 to 5. Late Devayani filed I.A. No. 3239 of 1990 to set aside the said four documents on the ground of fraud, collusion, etc. and I.A. No. 7367 of 1990 to render accounts. In order to convince the court as to various illegalities, fraud and collusion in the above four sale deeds, late Devayani had applied for a commission by filing I.A. No. 2349 of 1991 on 9-4-1991 to appoint an Advocate Commissioner to measure the properties with the help of the Taluk Surveyor and to ascertain the deficiency of property and the loss caused to it along with other relevant matters to decide the said two petitions filed in 1990. That application was dismissed holding that the application can be filed in the appropriate stage. Hence, subsequently I.A. No. 2993 of 2003 was filed to issue for a commission to ascertain the loss caused to the estate. That application was dismissed by the Insolvency Court. Against that an appeal was filed. The learned District Judge dismissed the appeal on the ground that the appeal does not lie under Section 79 of the Insolvency Act.

(3.) Question that arises for consideration is whether the appellate court was correct in holding that the Appeal does not lie. Section 79 of the Insolvency Act states as follows : The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a court subordinate to a District Court, may appeal to the District Court, and the order of the District Court upon such appeal shall be final. The decision in The Central Bank of India Ltd. v. Gokal Chand, 1967 AIR(SC) 799 says that an appeal does not lie from an interlocutory order, which is merely procedural and to does not affect rights or liabilities of parties. If, however, any error, defect or irregularity is found in any interlocutory order, it can be taken as ground of objection in appeal from final order in main proceeding. It is specifically held in the said ruling that order refusing to issue commission for inspection and preparation of plan of a particular premises of landlord in proceedings for eviction, was not appealable as the same was mere procedural order not affecting any right or liability of party. In the decision reported in P.M. Thankappan v. Muharnmed Kulty and others,1969 KerLT 104, it is stated that an interlocutory order may not perhaps be properly described as a decision of the court.