S.K.RAJALINGAM CHETTY Vs. OFFICIAL ASSIGNEE

JUDGEMENT

(1.) THE heirs of a deceased insolvent, who was adjudicated in I. P. No. 23 of 1892, apply for payment out of Rs. 1400/ - standing to the credit of the estate with the Official Assignee.

(2.) THE insolvent in this case died without obtaining final discharge as provided for under the Act, i.e., Insolvent Debtors Act, Ch. XXI of 1848. It was found long after his death that he was entitled to l/3rd share in premises No. 6, Vaikunta Vadhyar Street, G. T., Madras. That property was sold in execution of the mortgage decree in O. S. No. 177 of 1943 on the file of the City Civil Court. The insolvent's share was vested in the Official Assignee and the present sura represents the net sale proceeds of the insolvent's share in the said property.

(3.) THE position in this estate is that the insolvent obtained only an order of personal discharge on the opposition of some of the creditors; but there was no final discharge or certificate granted to him as provided in the Act of 1848. It was therefore contended by the Deputy Official Assignee that the one -third share continued to vest in the Official Assignee and the claim to the saJe proceeds representing one -third share could not therefore be sustained. The right of an insolvent or his heirs to be entitled to any surplus in the hands of the Official Assignee arises only when there is a surplus after payment in full with interest the claims of the creditors either under the Indian Insolvency Act of 1848, or under Section 76 of the present Act (Act III of 1909). In this case, the proceedings in insolvency are still pending. The creditors have not been paid. In such circumstances, under the Act of 1848, the assignee -should seek the directions of Court under Sec -tion 44 and act according to the directions of the Court as to the disposal of the money due to such creditors. Under the present Act, in1 respect of unclaimed dividends the rule framed under the Insolvency rules is Order 11, Rule 13. If the creditors have not applied for dividends within six months after the declaration thereof, the Court may issue directions to the Official Assignee to transfer such dividends to the Provincial Government or make such order as it thinks fit.