RAMAKRISHNAN Vs. SAMIYAR MARAPPA GOUNDER

JUDGEMENT

(1.) THE Civil Revision Petition arises out of proceedings initiated by the petitioner in I.A.No.128 of 1980 in I.P.No. 29 of 1971, Sub Court, Coimbatore, under section 68 of the Provincial Insolvency Act (V of 1920) (hereinafter referred to as � the Act), praying that the sale of an one-fourth share in an extent of 12-99 acres in G.S.No.271, Pongalur Village, Avanashi Taluk, belonging to the insolvent/second respondent by the third respondent herein in favour of the first respondent herein on 18.7.1980 should be set aside. Claiming that the petitioner is a creditor furnished by the insolvent and that the insolvent is indebted to him in a sum of Rs.5,000/- on a promissory note executed on 10.2.1969, the petitioner complained that he had no notice of the sale held by the Official Receiver on 18.7.1980 and that the property which was worth more than Rs.20,000/-had been sold for a very low price as the first respondent had successfully kept away the real bidders. Stating that by a properly conducted sale, the estate of the insolvent will stand to benefit and the creditors also will be benefitted, the petitioner prayed for the setting aside of the sale held by the Official Receiver on 18.7.1980 in favour of the first respondent herein.

(2.) IN the counter statement filed by the first respondent, the locus standi of the petitioner to file the application under section 68 of the Act was questioned on the ground that the petitioner was not a creditor who had proved his debt. The application, according to the first respondent, had been filed at the instigation of the insolvent with a view to protract the proceedings. The first respondent questioned the claim of the petitioner that he is entitled to notice and stated that he had notice of the sale. The sale had been proclaimed more than once and at the prior sales, there were no bidders, according to the first respondent. The value of the property sold as given by the petitioner was disputed by the first respondent. The loan claimed to have been advanced by the petitioner to the second espondent had been brought into existence and the promissory note in support thereof had also been created, according to the first respondent. It was the further case of the first respondent that the petitioner was not possessed of sufficient means to advance any loan to the insolvent. With reference to the one-fourth share of the insolvent sold in favour of the first respondent, he stated that it had been sold to him for a proper price and if the petitioner claimed that it was worth Rs.24,000/-, than, he should be directed to deposit that amount into Court so that in the event of the Court holding that a fresh sale has to be ordered, the bid can star from that account upwards. The application to set aside the sale was characterised as one devoid of merits and the first respondent prayed for its dismissal. The respondents 2 and 3, though served with notice of the application, remained ex parte.

(3.) THE learned Counsel for the petitioner strenuously contended that the sale held by the Official Receiver on 18.7.1980 in respect of 3/16 share of the insolvent in an extent of 12.99 acres in G.S.No.271 of Pongalur Village was for a price much lower than that for which the property was purchased in 1968 and that by itself would justify the Court holding that the property should not have been sold at that price and setting aside the sale in favour of the first respondent. Reliance in this connection was placed upon the decision in Srinivasa Naicker v. Engammal, A.I.R. 1962 S.C. 1141 and Narayanan v. Kannabiran Mudaliar, (1974) 2 M.L.J. 303. On the other hand, the learned Counsel for the first respondent submitted that the petitioner had not placed any evidence before the Court to show the market value of the property in 1980, when the property was brought to sale and sold and in the absence of the materials in that regard, the Court cannot proceed to accept the case of the petitioner that the value of the property in 1980 was high and the sale of the property for Rs.8,010/- in favour of the first respondent was for a low or inadequate price. THE learned Counsel also challenged the finding recorded by the lower Appellate Court to the effect that the petitioner is a creditor and contended that the petitioner has not proved his debt in insolvency and cannot, therefore, maintain the application under section 68 of the Act as a creditor.