KISHAN SINGH Vs. THAKUR LAL

JUDGEMENT

(1.) This is an application in revision Under Sec. 75 of the Provincial Insolvency Act questioning the validity of an order passed by the learned District Judge of Mathura in appeal and reversing the order of the Insolvency Judge setting aside an auction sale held by the official receiver.

(2.) The Applicant Kishan Singh was declared insolvent by an order of the Insolvency Judge on 19 -9 -1962 on the ground that he was unable to pay his debts. In due course out of the Property of the insolvent two bhumidhari plots were auctioned by the official receiver on 10 -11 -1963, the bid of the opposite party, Thakur Lal, being the highest was accepted. No sale deed was got executed and registered. One Genda Lal who had filed objection to the sale of the bhumidhari plots claiming that they belonged to him, had obtained certain injunction orders from civil court in a suit filed by him which prevented the sale deed from being executed and registered. Ultimately the suit of Genda Lal was dismissed but before the official receiver could execute the sale deed and get it registered in favour of Thakur Lal on an application filed by the insolvent Kishan Singh Under Sec. 35 of the Insolvency Act adjudication was annulled on the ground that the debts owed to the creditor were paid off. This order was passed on 23 -5 -1966. By the same order the learned Insolvency Judge holding that mere auction sale held by the official receiver did not pass any title to Thakur Lal, the auction purchaser and out of the money deposited nothing was paid by the official receiver to the creditors, the auction sale be set aside. Thakur Lal, the auction purchaser, filed an appeal. The learned District Judge while upholding that part of the order of the Insolvency Judge by which the adjudication was annulled, however, allowed the appeal in part and set aside the order of the Insolvency Judge cancelling the auction sale. Kishan Singh, the insolvent, has now come up in revision before this Court.

(3.) Sri R.P. Goel, learned Counsel for the Applicant, contended that the learned District Judge fell into a legal error in taking the view that by the auction sale held on 10 -11 -1963 the title passed and the Insolvency Judge had no jurisdiction to set aside that sale. Learned Counsel submitted that an auction sale held by the official receiver in enforcement of the adjudication order for realisation of the assets of the insolvent is not like an auction sale held in execution of the decree under the Code of Civil Procedure that is to say, an auction sale held by the official receiver is not an act of court unlike an auction sale held under Code of Civil Procedure in execution of a decree which is always an act of court. I think there is substance in this contention. There is no provision in the Provincial Insolvency Act providing for any order, from the court to the official receiver to hold any auction. There is no provision either requiring confirmation of any sale held by the official receiver by the Insolvency Judge. There is ample authority for the proposition that mere acceptance of the highest bid by the official receiver at an auction sale held by him does not amount to a complete sale in the sense that the title in the property does not pass to the auction purchaser. The this would not piss unless the official receiver duly executes a document and gets it registered. The transaction so evidenced is nothing but the act of parties. On the other hand no registered sale deed or document is required to be executed when a property is sold in execution of a decree under the provisions of the Code of Civil Procedure. The confirmation of the sale by the Court is sufficient to pass the title. Thus when a property is sold in execution of a decree under the Code of Civil Procedure the title passes to the auction purchaser by operation of law while in an auction held by the official receiver under the Provincial Insolvency Act the title passes to the official receiver by act of parties. This view is supported by a division bench decision of this Court in the case of Raghubir Saran Das v/s. Kunj Behari Lal, 1941 AWR 362 (HC). Learned Counsel for Thakur Lal opposite party, contended that the ratio of the decision in the case of Raghubir Saran Das v/s. Kunj Beharl Lal (supra) will not be applicable inasmuch as that decision turned on the peculiar facts of that case which arose out of and suit brought by the auction purchaser himself for recovery of the money deposited by him with the official receiver. I do not find any good ground for distinguishing that case in so far as the legal question which arises is concerned. The question directly arose in Raghubir Saran Das's case. There the official receiver who was the Defendant took up the stand that the sale was completed and no question of returning of any money arose. The auction purchaser contended that the sale was not completed and in equity and under contract lie was entitled to the return of the consideration if transaction had failed. The learned District Judge strangely enough has not noticed the decision of the division Bench of the High Court in Raghubir Saran Das's case though the learned Insolvency Judge had followed that decision and referred to it in his order. The learned Judge seems to have been much influenced by a learned Single Judge's decision of the Oudh Chief Court in the case of Wazirey v/s. Mathura Prasad, AIR 1939 Ori 55. Much reliance was placed on this decision by the learned Counsel for the opposite parties also before me. With great respect to the learned Single Judge who decided that case, I find it difficult to agree with him as the whole approach adopted by the learned Single Judge in Wazirey v/s. Mathura Prasad's case was that an auction sale held by the official receiver under the Provincial Insolvency Act is of tae same nature and of the same character as the auction sale held in execution of the decree Under the Code of Civil Procedure. Moreover, the learned Single Judge of Oudh Chief Court distinguished the full Bench case of Pinna mamavi Basava Sankaram v/s. Ganapati Narasimbulu, AIR 192 Mad 81 which case was also noticed by the division bench of this Court in Raghubir Saran Das's case and relied upon.