D J RAJENDRAN Vs. K KATHIRVEL

JUDGEMENT

(1.) The second respondent in I.P. No. 63 of 2009 on the file of the Sub Court, Salem is the revision petitioner. The first respondent-creditor filed I.P. No. 63 of 2009 against the second respondent-debtor and the revision petitioner to adjudicate the second respondent herein as insolvent In that petition, the first respondent filed I.A. No. 103 of 2009 for the appointment of interim receiver under and that application was allowed and the Official Receiver, Salem is appointed as Interim Receiver to take immediate possession of the petition mentioned property belonging to the insolvent and that order is challenged in this revision by the second respondent.

(2.) Learned Senior Counsel Mr. S.V. Jayaramar appearing for the revision petitioner submitted that even according to the petitioner, the second respondent-debtor had sold the property to the revision petitioner, who is the second respondent in the Insolvency Petition filed by the first respondent herein, on 9.10.2009 and the Insolvency Petition was filed by the first respondent herein on 8.12.2009. He, therefore, submitted that even before filing of the petition to adjudicate the second respondent herein as insolvent, the debtor-second respondent sold the property to the revision petitioner and the revision petitioner also purchased the property for a valuable consideration and therefore, he is a bona fide purchaser for value and he should be heard before passing of order of adjudication and the court has no power to appoint interim receiver to take possession of the property and the court below also failed to consider the provisions under sections 53 to 55 of the Provincial Insolvency Act and erred in appointing the interim receiver and therefore, the order of the court below is liable to be set aside.

(3.) On the other hand, learned counsel for the first respondent submitted that admittedly the property was sold on 9.10.2009 two months prior to the filing of the Insolvency Petition by the first respondent herein to adjudicate the second respondent herein as insolvent and the second respondent herein owes a sum of Rs. 75,00,000/= to the first respondent herein and with an intention to defeat the rights of the first respondent, the second respondent herein sold the property to the revision petitioner two months prior to the date of filing the Insolvency Petition and therefore, the second respondent has committed act of insolvency as per the provisions of section 6 of the Provincial Insolvency Act and as per section 28(7), the order of adjudication shall relate back to the date of filing the petition and therefore, when the debtor-second respondent fraudulently sold the property to defeat the rights of the creditor-first respondent herein, he has committed the act of insolvency and therefore, the sale is liable to be set aside and to protect the property, the application was filed for appointment of interim receiver which is permissible under section 56 and under section 20 also receiver can be appointed and considering all these aspects, the court below has rightly appointed Official Receiver, Salem as interim receiver and therefore, there is no need to interfere with the order passed by the court below.