KALAMALLAH BABAKKA Vs. OFFICIAL RECEIVER CUDDAPAH

JUDGEMENT

(1.) In this Letters Patent Appeal preferred by the plaintiffs the question raised by Mr. R. Subba Rao, the learned counsel appearing for them, is that while an order of adjudication relates back to, under sub-section (7) of S. 28 of the Provincial Insolvency Act, and takes effect from, the date of the presentation of the petition on which the adjudication is made, there is no provision in the Act which makes the vesting of the properties of the insolvent also either in the Court or in the Official Receiver to date back to the date of the presentation of the application.

(2.) To determine the question raised by the learned counsel, it is necessary to set out the relevant facts. The first and the 2nd plaintiffs are the wife and son respectively of the insolvent Hussainappa. As Hussainappa had taken a second wife, the plaintiff ( appellants ) demanded maintenance from him and at the suggestion of some elders, Hussainappa executed an agreement dated 25-6-1962 in favour of the plaintiffs by and under which he agreed to convey his rights, interest and title to the suit lands. As he did not deliver possession of the property in terms of the agreement, the plaintiff filed a suit, O. S. No. 48/62 in the Sub-Court, Cuddapah, for specific performance in terms of the agreement and obtained a decree against Hussainappa on 7-2-1964. Meanwhile three days prior to the date of the decree, Hussainappa himself had filed an application on 4-2-1964 under Sections 6 and 10 of the Provincial Insolvency Act for adjudicating him as an insolvent. The plaintiffs ( appellants ) got themselves impleaded as parties to the insolvency proceedings. The adjudication of Hussainappa as insolvent was on 14-8-1964. The Official Receiver, in whom the properties were vested on the date of the adjudication itself, brought the properties of the insolvent, Hussainappa, to sale and were sold to the 2nd defendant ( 2nd respondent herein ) under Ex. B-5 dated 4-1-65. Possession also was delivered to the purchaser on 27-9-65. It is after that sale and delivery of possession of the properties to the 2nd defendant that the present suit O. S. No. 52/68 was filed by the plaintiffs for declaration of their title to the properties sold to the 2nd defendant and for the permanent injunction against the 2nd defendant on the footing that they are in possession of the suit property. The defence of the 2nd defendant was that the insolvency proceedings are binding upon the plaintiffs and that he is a bona fide purchaser for value and therefore the plaintiffs are not entitled to the reliefs prayed for.

(3.) The Court of first instance dismissed the suit as all the issues were found against the plaintiffs and that decree was confirmed in the appeal preferred by the plaintiffs by the Additional District Judge, Cuddapah. A second appeal 694/70 was preferred against that decree and our learned brother Madhava Reddy, J. Dismissed the Second Appeal but however granted leave and that is how the Letters Patent Appeal is before us.