SELLAMMAL Vs. THIRU VENGADA UDAYAR

JUDGEMENT

(1.) THE appellants are aggrieved by the order of the Courts below, by which adjudication of the respondents 1 and 2 as insolvents, was set aside invoking Section 35 of the Provincial Insolvency Act. It is not in dispute that the respondents 1 and 2 were adjudicated as insolvents by an order made on 18. 2. 1977. THE courts below have ordered annulment of that order on the ground that the debts owed by the insolvents on the date of adjudicate on to the petitioning creditors were wiped out by reason of the enactment of Tamil Nadu Debt Relief Act (Act 13 of 1980) which came into force with effect from 8.2.1980.

(2.) The argument advanced for the appellants is that once the order of adjudication is made, the state of the insolvent is vested with the Official Receiver and thereafter the insolvent cannot claim any right in respect of the estate and the insolvent is therefore, prevented from invoking the provision of subsequent enactment though it would have been applicable to such insolvent had he not been declared as insolvent. Learned Counsel for the appellants relied upon a decision of Allahabad High Court, in the case of Kripa Nath v. Ganga Prasad , A.I.R.1962 All. 256 in support of his submission. It was held in that case that, "vesting of a property in the court or the receiver not only gives the courts or the receiver the right to take possession of the property and deal with it in a certain manner, but amounts to a legal transfer of the right, title and interest of the insolvent to the court or to the receiver as the case may be".

(3.) SECTION 35 of the Provincial Insolvency Act reads as follows:-