POONGAVANAMMAL Vs. CHINNATHAMBI KOUNDER

JUDGEMENT

(1.) THIS is an appeal against the judgment and decree of Varadarajan, J., dated 14th August, 1975, rendered in Second Appeal No. 942 of 1972.

(2.) ONE Dhandapani Reddy was adjudged insolvent in I.P. No. 4 of 1961 on the file of the District Court of South Arcot, Cuddalore, on 30th August, 1961. The suit property was sold by the Official Receiver under Exhibit A-1 dated 16th May, 1964, to the respondent herein and the said sale deed was registered on 11th September, 1964. In O.S. No. 446 of 1960 on the file of the Court of the District Munsif of Villupuram, a decree was passed against the said Dhandapani Reddy. In execution of of that decree, the suit property was brought to sale and the appellant purchased the same on 9th March, 1964, and the said sale was confirmed on 10th April, 1964, and she obtained delivery of possession of the property on 20th July, 1964. It will be seen that the Court-auction-sale in the particular case took place after the adjudication of Dhandapani Reddy as insolvent on 30th August, 1961. It is in that situation, the respondent herein instituted O.S. No. 459 of 1966 on the file of the Court of the District Munsif, Villupuram for declaration of his title to the suit property and for recovery of possession with past and future profits. The claim was based on his purchase under Exhibit A-1 sale deed executed by the Official Receiver, in the insolvency proceedings. According to him, the Court auction-sale having taken place subsequent to the adjudication of Dhandapani Reddy, the Court-auction-purchaser, namely the appellant herein, did not acquire any title to the property as against the Official Receiver. The point that had to be considered by the Courts below was whether section 52 (3) of the Provincial Insolvency Act, 1920, hereinafter referred to as the Act, applied to such a sale or not. Relying on the decisions of this Court, the Courts below held that the Court-auction-sale did not prevail against the Official Receiver and therefore the sale by the Official Receiver in favour of the respondent herein would prevail. It is that matter which came up to this Court in Second Appeal No. 942 of 1972. Even before this Court, the question that came to be considered was whether the Court-auction-sale that took place subsequent to the adjudication of Dhandapani Reddy would prevail over the sale of the suit property by the Official Receiver in the insolvency proceedings in favour of the respondent herein. Relying upon the two decisions of this Court in Bachu Mallikarjuna Rao v. The Official Receiver, Kistna1 and Karamsetti Guruvaiah v. V. Rangiah2, as against the decision of the other Courts, Varadarajan, J., held that section 51 (3) of Act will have no application to the sale in question, namely, the sale that took place subsequent to the adjudication, and therefore, the sale by the Official Receiver in favour of the respondent herein would prevail, with the result, the second appeal preferred by the appellant herein was dismissed. However, the learned Judge granted leave and hence the present Letters Patent Appeal.

(3.) THE next relevant decision of this Court is Muthan Chettiar v. Venkitaswami Naicker5. Venkatasubba Rao, J., observed: "THE question has really to be decided with reference to section 51, which has not been referred to in that judgment. (Subra-mania Aiyar v. THE Official Receiver, Tanjore1. That section, alter saying that an execution " credit or is not entitled to the benefit of the execution unless the assets are realised by sale or otherwise, before the admission of the petition, goes on to say in sub-section (3): A person who in good faith purchases the property of a debtor under a sale in execution shall in all cases acquire a good title to it against the receiver."