M KANNIYALAL Vs. S NATESWARAN

JUDGEMENT

(1.) THE appellant is one of the creditors in the insolvency proceedings in respect of the first respondent. In I.P.No.5 of 1990 an interim receiver was appointed on 1.2.1990. At this stage an application was filed under Section 4 and 5 of the Provincial Insolvency Act for directions to the interim receiver to inspect the movables in the premises at No.29, Muthuranga Mudali Street, Erode, which was occupied by the insolvent, namely, the first respondent as a tenant and to take an inventory of the same. This application was ordered by the Additional Sub-Judge, Erode, who also gave a direction that after the inventory is taken the movables shall be sold and the proceeds should be deposited to the credit of the said I.P. and to handover vacant possession to the owners. This order was passed in view of the fact that the petition premises was a rented premises and the owner had filed R.C.O.P.No.62 of 1990 for willful default and the monthly rent was Rs. 1,250. THErefore, the continuance of the premises under lock and key without delivering possession to the owner would result in diminishment of the insolvent's property that is available for distribution. Against this an appeal was filed by the insolvent to the District Judge. THE District Judge while confirming the order relating to taking an inventory of the movables, selling them and crediting the sale proceeds to the account of the I.P., set aside Clause 1 of the order of the learned Additional Sub-ordinate Judge with regard to delivery of possession of the property. Against this the creditor has filed the present C.M.S.A.

(2.) MR. D. Rajagopal, the learned counsel for the appellant submitted that there was no error in the order of the Additional Subordinate Judge, since the interim receiver is bound in law to protect the property of the insolvent and to save it from deterioration or loss. He therefore questioned the correctness of the Appellate Judge reversing the Trial Court's order without assigning any reasons especially when Insolvency Court has power and jurisdiction to protect and preserve the property of the insolvent. He relied on The Official Receiver of Vizagapatnam Mandavilli Mohana Rao v. Villapati Peda Suryanarayana and others, 1945 (2) MLJ 1 which is an order of a Division Bench of our Court where the learned Judges have held,