(1.) The two questions referred to the Full Bench are : "1. Whether a debtor who was an insolvent on 1-10-1937 and 22-31938, but whose adjudication was subsequently annulled has saleable interest in the property on the two crucial dates?
(2.) Would it make any difference if, though the adjudication was annulled, the properties of the insolvent, either in whole or in part, were vested in an appointee of the Court under Section 37, Provincial Insolvency Act and continued to be so vested at the time when the application for scaling down was filed," 2. These are the circumstances underwhich the two questions have arisen: In 1927 one Palani Goundan and his son executed a mortgage over some of their immovable properties in favour of one of their creditors named Somasundaram Chettiar. Another creditor named Arunachalam Ghettiar applied to have the mortgagors adjudicated insolvents on the ground that the mortgage in favour of Somasundara amounted to a fraudulent preference. The mortgagors did not enter appearance and in September 1928 an order of adjudication was passed without opposition. Thereafter in October 1929 Arunachala applied to the Court for an order under Section 54, Provincial Insolvency Act for setting aside the mortgage in favour of Somasundara. The Subordinate Judge allowed the application and set aside the transaction. In appeal to the District Court the order of the Subordinate Judge was set aside. Arunachala then came up to this Court in second appeal but this Court agreed with the District Court in holding that there was no fraudulent preference and dismissed the appeal. It thus having been established that there had been no fraudulent preference the mortgagors applied in March 1935 to the Sub-Court for annulment of their adjudication. The petition was allowed and the adjudication set aside under Section 35, Provincial Insolvency Act. On appeal the District Judge reversed that decision whereupon there was a second appeal to this Court which was disposed of in 1940 (the case has been reported in Periakaruppan v. Arunackalam Chettiar, I.L.R. (1940) Mad. 441: (A.I.R. (27) 1940 Mad. 375 F.B.). This Court discharged the order of the District Judge and restored the order of the Subordinate Judge. In respect of the properties of the insolvent this Court made the following order :
(3.) So far as the second of these two questions is concerned, it may be stated at once that in view of the fuller exposition of the facts that was made before us it does not really arise. The direction which this Court gave in 1940 was that except in respect of the sum of Rs. 3600 the Official Receiver should deliver the hroperties back to the debtors "two months hence." That period of two months expired long before Narayanaswami Goundan made his application out of which the present proceedings have arisen. The properties did not continue to remain vested in an appointee of the Court under Section 37, Provincial Insolvency Act, at the time when the application for scaling down the debt was filed. It is therefore sufficient to answer the first question.