A PARANJOTHI Vs. OFFICIAL ASSIGNEE HIGH COURT

JUDGEMENT

(1.) THIS appeal challenges the common order of the learned Single Judge made in Application Nos.67 and 68 of 2002 in I.P.NO.9 of 1983 at the instance of the appellant/petitioner whereby the applications were dismissed.

(2.) THE short facts which led the appellant/petitioner to file this appeal, as could be seen from the affidavit, can be stated as follows:

(3.) ADVANCING his arguments on behalf of the appellant, learned Senior Counsel Mr.Venkatachalapathy, would submit that the appellant originally made an application in Application No.364 of 1983 that he should be treated as secured creditor and charge should be created under the mortgage and the learned single Judge while passing the order has though denied, has categorically found that the consideration was actually passed and therefore it has got to be allowed to that extent. Though it was subsequently dismissed on appeal, the finding recorded was not disturbed. In the instant case, it is an admitted fact that the property transferred by way of equitable mortgage belonged to Srinivasan and the firm was only a partnership firm. Thus it is quite clear from the available materials that it was a personal debt. Under such circumstances, so long as it is not the property of the firm, it is an admitted position that it is the property of the individual partner and hence it was a personal debt. As could be seen from the materials, by operation of law, under Section 49(4) of the Act, first of all, out of the amount, the appellant has got to be paid first, and the amount which was borrowed, along with interest thereon would come to Rs.25,45,065/-. Learned counsel drawing the attention of the Court to Section 49(4) of the Act, submitted that in the case of partnership, in the first instance, the partnership property shall be subjected for payment of the partnership debts, and the separate property of each partners shall be subjected for payment of the separate debts. Learned counsel would also further took the Court to Section 49 of the Indian Partnership Act, 1932 which speaks about the payment of firm's debts and of separate debts and the said Section 49 of the Partnership Act is applicable for payment of the separate debts due from any partner, and the property of the firm shall be applied in the first instance in payment of the debts of the firm and if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him. Section 49 of the Partnership Act can be taken into service in the case ordinarily. In the instant case, it is the personal properties of the Insolvent Srinivasan and the property actually belonged to him separately and he has also borrowed personal loan and hence the property is applicable and by applying the provision, his separate debts has got to be paid, in the first instance and the matured amount has got to be paid from the total amount of Rs.25,65,045/- as calculated. In support of his contention, learned senior counsel would rely on the decision which are as follows: 1945 (2) MLJ 113 (Penumatsa Rangaraju Vs. Sait Devichabnd Bhootaji Firm partner Sait Seshmull Kasturji and another) 1969 MLJ (2) 115(N.S.M.Adaikappa Chettiar Vs. The Official Assignee, High Court, Madras)