KAMARAPU SIVAKUMAR Vs. SIRIMALLA ASHOK

JUDGEMENT

(1.) This Revision Petition is filed by a third party creditor against the order of the Principal Subordinate Judge, Warangal in Memo S.R.No. 2243/2000 in E.P.No. 44/98 dated 4.8.2000.

(2.) The E.P was filed by the first respondent for realization of amount by way of sale of certain property attached in the suit before the judgment. During the pendency of the E.P, the second respondent filed IP No. 4 of 1992 and he was adjudged as an insolvent. The revision petitioner is also one of the creditors of the insolvency proceedings. Subsequent to the adjudication, the properties were entrusted to the Official Receiver and the Official Receiver after sale of the properties of the judgment debtor deposited the sale proceeds in the insolvency court. When the decree holder made an application, covered by I.A.No. 702 of 2000, to send for the amount and to issue a cheque for the amount covered by the E.P, the Official Receiver filed a memo stating that since the decree holder is one of the creditors in the IP and as the amount realized by way of sale of properties of the JDR, has to be distributed among the creditors on proof of debts, the first respondent cannot be treated as a secured creditor. The lower court dismissed the memo through the impugned order. Hence, the third party creditor filed this revision petition questioning its validity and legality.

(3.) The lower court relied on a judgment of a Single Bench of this High Court in VASAVI COMPANY VS. NAMPALLY PADMA AND OTHERS, wherein, the High Court held that the decree holder who obtained attachment is a secured creditor. The lower Court also referred to a Full Bench Judgment of the Madras High Court in MANICKAM CHETTAIR VS. INCOME TAX OFFICER, MADRAS AND OTHERS, wherein, a Full Bench of Madras High Court held that simply because the decree holder in execution of his decree, has attached judgment debtor's property cannot claim that he is a secured creditor. The Full Bench noted on the judgment of an earlier Full Bench of the Madras High Court in KRISTNASWAMY MUDALIAR VS. OFFICIAL ASSIGNEE OF MADRAS wherein the Full Bench while considering the scope of Sections 268 and 483 of CPC, 1882 held as follows: