T S SAILAPPAN Vs. SUBBIAH PILLAI

JUDGEMENT

(1.) THIS reference involves the determination of the question

(2.) THE third respondent in this civil revision petition obtained in O. S. No. 53 of 1955 on the file of the Sub Court, Tirunelveli, a decree against the fourth respondent for the payment of a sum of money. In execution of the decree ha attached and brought to sale certain immoveabla properties of the debtor. In the sale that was held on 4th November 1960 the first respondent who was the highest bidder became the purchaser. Subsequent to the sale and before it was confirmed, i. e. , on the 23rd November 1960 another creditor of the fourth respondent applied to the Sub-Court of Tirunelveli in I. P. No. 18 of 1960 to adjudge the latter an insolvent. The petition was duly admitted and on 23rd november 1960 the Official Receiver of Tirunelveli was appointed as interim receiver pending disposal of the insolvency petition. The order appointing the interim Receiver stated inter alia "he is directed to take charge of the properties of the respondent-debtor pending disposal of the insolvency petition. " The Official receiver entered into possession of the properties. Alleging that the execution sale in favour of the first respondent was vitiated by a material irregularity which resulted in the property being sold for less than its proper value, he applied to the executing Court under Order 21, Rule 90 C. P. C. to set aside the sale. Though it is not very material for the decision of this reference it may for the sake of completion of the narrative be stated that the debtor was adjudged insolvent on 13th December 1960.

(3.) THE maintainability of the petition to set aside the sale, filed by the Official receiver was challenged by the auction purchaser. He contended that an interim receiver appointed under Section 20 of the Provincial Insolvency Act has no interest in the property sold and would therefore have no locus standi to sustain the petition. The learned Subordinate Judge who disposed of the petition in a perfunctory manner did not consider that objection. He assumed, an assumption which was wholly unjustified, that the parties before him were only interested in the decree-holder recovering the monies and if that could be secured, there was no objection to set aside the sale. He accordingly passed a conditional order setting aside the sale directing that if the interim Receiver were to deposit the decree amount with commission and poundage within a month from the date of the order, the sale would stand set aside; failing compliance, the petition to stand dismissed. The auction purchaser whose existence and rights were completely ignored by the executing Court filed an appeal to the District Court. The learned district Judge found that there was no justification for disposing of the application on any consent of the parties. He accepted the contentions of the auction purchaser that the interim Receiver had no locus standi to file the application for setting aside the sale and dismissed that application in limine.