K SUBRAMANIAM Vs. A KANDASWAMY

JUDGEMENT

(1.) THE 3rd defendant is the- appellant herein. THE plaintiff filed a suit for-partition and separate possession of his share in the suit property. THE suit was resisted by the defendants, who are three in number. THE suit was decreed in favour of the plaintiff, granting the plaintiff a preliminary decree for partition and separate possession. THE 3rd defendant aggrieved by the said judgment and decree, preferred an appeal to the sub-Court. Tirupur, in A.S. No, 34 of 1986, and the judgment and decree of the trial court were confirmed by the sub-Judge, who dismissed the appeal. Hence, this second appeal by the 3rd defendant.

(2.) AT the time when the second appeal was admitted the following substantial questions of law were framed for consideration:-

(3.) IF the transaction is held to be not nominal or fictitious, but voidable then it would be fall within section 53 of the Act and if not challenged by the Receiver, it would hold good and valid. For when a person is adjudged insolvent and his entire estate vest with Official Receiver, the Receiver alone will be competent to take proceedings either under sections 4, 53 or 54 of the Act as the case may be. Section 54 of the Act provides that every transfer of property, every payment made, every obligation incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor, with a view of giving that creditor a preference over the other creditors, shall, if such person is adjudged insolvent on a petition presented within three months after the date thereof, be deemed fraudulent and void as against the receiver, and shall be annulled by the court. The object of Section 54 of the Act is to protect the interest of the whole body of creditors. Hence, on facts, Section 54 is not applicable as the 3rd defendant is not a creditor. I have already referred to the fact that the transaction is dated 17.9.1969. The application for adjudication has filed on 19.1.1970. It would follow that the petition has been filed only after four months of the transaction. Here, again it has to be pointed out that no application has been filed by the Receiver either for annulment of the transfer under Section 53 or for declaration under Section 4 of the Provincial Insolvency Act.