PATHI GUNDEPPA Vs. THE OFFICIAL RECEIVER

JUDGEMENT

(1.) ON the 10th November, 1930, two partners in a cloth business, named Gaveppa and Rudrappa respectively, were adjudicated insolvents in the Court of the District Judge of Bellary. They had also carried on a motor bus business. On the 3rd April, 1930, Gaveppa sold four motor buses to the appellant for Rs. 10,000 and on the 29th April, 1930, he sold two others for Rs. 2,500. On the 28th April, 1930, he sold a motor shed to the appellant for Rs. 170. On the 5th April, 1935, the Official Receiver filed an application (I.A. No. 77 of 1935) for an order setting aside the sales of the motor buses on the ground that the transaction constituted fraudulent preferences. On the nth February, 1935, he filed an application (I.A. No. 86 of 1935) for an order setting aside the sale of the shed on the same ground. The District Judge dismissed the applications, but on appeal to this Court they were allowed and the transactions set aside by a judgment dated the 18th March, 1942.

(2.) ON the 17th August, 1943, the Official Receiver filed I.A. No. 77 of 1943, in which he asked for an order directing the appellant to pay mesne profits in respect of the shed at the rate of Rs. 12 per mensem from the date of the alienation. On the same date he filed another application (I.A. No. 178 of 1943) asking the Court to pass an order directing the appellant to pay into Court Rs. 2,500, the price of the two buses sold on the 29th April, 1930 (he had already paid Rs. 10,000, the price of the four buses first sold) and interest at 12 per cent, on Rs. 10,000 from the 3rd April, 1930, and at the same rate on Rs. 2,500 from the 29th April, 1930. The appellant opposed these applications on the ground that they did not lie, that they were barred by the doctrine of res judicata and that they were out of time. The plea of res judicata was based on the fact that in his application asking for declarations that the alienations were void on the ground that they constituted fraudulent preferences the Official Receiver had also asked for mesne profits and interest but no order was passed on these prayers either by the District Court or by this Court on appeal.

(3.) IN this Court the learned advocate for the appellant has conceded that the Court has power to order payment of mesne profits and of interest, but he says that the District Judge erred in giving mesne profits and interest from the dates of his application under Section 54. He contends that the law of limitation applies and that in respect of mesne profits he can only recover the amount of Rs. 12 per mensem for three years prior to the 17th August, 1943, and interest on Rs. 10,000 and Rs. 2,500 for six years prior to that date. In respect of the mesne profits he says that Article 109 of the Limitation Act applies and in respect of interest, Article 120. He further contends that the District Judge erred in rejecting the plea of res judicata.