SUBBA RAO Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) The petitioner is the decree-holder in the partition suit, O.S. No. 502/1954 on the file of the District Munsif's Court, Vijayawada. He obtai ned a final decree. He filed E. P. No. 250/1979 on 3rd May, 1979 to recover the mesne profits of about Rs. 32,211/. The properties were attached and the executing Court passed an order on 22nd March, 1980 that the petition schedule properties should be sold after due proclamation and adjourned the matter to 28th April, 1980. While so, the judgment-debtor filed I.P. No. 14/1980 in the Sub Court, Vijayawada. The Insolvency Court appointed the Official Receiver, Krishna, as interim Receiver on 15th April, 1980 under Section 20 of the Provincial insolvency Act. On 19th April, 1980, the interim Receiver filed a petition under Section 52 of the PROVINCIAL INSOLVENCY ACT, 1920 in the Court of the District Munsif, Vijayawada, stating that he bad taken possession of the petition schedule properties on l7th April, 1980, in addition to the other properties of the judgment-debtor and that the sale might be stopped. That petition was opposed by the decree-holder. On 6th May, 1980 the learned District Munsif, Vijayawada allowed the petition of the interim Receiver, Questioning his order the decree-holder has filed this revision under Section 115 C. P. C,

(2.) The learned counsel for the petitioner has raised the following contentions : First, Section 52 of the PROVINCIAL INSOLVENCY ACT, 1920 applies to a case only when a person is adjudged insolvent and the property has vested in the Official Receiver and also when the property is in possession of the Court. The interim Receiver appointed under Section 20 of the Provincial Insolvency Act cannot file a petition under Section 52. In this case, since the property was only attached it was not in possession of the Court within the meaning of Section 32. Therefore, the learned District Munsif erred in entertaining the petition of the interim Receiver under Section 52 and staying the sale. Secondly, when the Insolvency Court appointed an interim Receiver it did not give any direction that he should take possession of the property of the insolvent. therefore, the interim Receiver cannot take possession of the property by himself and ask the Court under Section 52 to stay the sale. Thirdly, there was a collusion between the judgment-debtor and the interim Receiver, for the same advocate appeared for both of them. Fourthly, on the facts of this case, the executing Court should be directed to sell the properties and make over the proceeds to the Insolvency Act. I do not find ment in any of these contentions.

(3.) First Contention: Section 20 of the Provincial Insolvency Act provides for the appointment of an interim Receiver. According to that Section, the Insolvency Court when making an order admitting the petition where the debtor is the petitioner shall appoint an interim Receiver of the property of the debtor or any part thereof, and may direct him to take immediate possession of the property thereof, and the interim Receiver shall thereupon have such of the powers conlerrable on a Receiver appointed under the Code of Civil Procedure, 1908. In the present case, the judgment debtor filed taat insolvency Petition. it was admitted. Therefore, it has to appoint an interim Receiver of the property of the debtor. Accordingly, the Insolvency Court has appointed an interim Receiver. Thus, the appointment of the interim Receiver by the Insolvency Court is valid. Section 52 of the PROVINCIAL INSOLVENCY ACT, 1920 reads as follows:- "Wbere execution of a decree is issued against any property of a debtor which is saleable in execution and before the sale thereof notice is given to the Court executing the decree that an Insolvency Petition by or against the debtor has been admitted, the Court shall, on application, direct the property, if in possession of the Court to be delivered to the Receiver, but the costs of the suit in which the decree was made under the execution, shall be the first charge on the property so delivered, and the Receiver may sell the property or an adequate part thereof for the purpose of satisfying the charge." In the case on hand, execution of the decree has issued against the property of a debtor. Before the sale of the property, notice has been given to the Court by the interim Receiver by an application that an Insolvency Petition by the debtor had been admitted. Therefore, the Court has to direct the property, if it is in its possession, to be delivered to the Receiver.