RAJA VATSAVAYA VENKATA SURYANARAYANA JAGAPATHI RAJU BAHADUR Vs. OFFICIAL RECEIVER EAST GODAVARI DISTRICT

JUDGEMENT

(1.) This civil miscellaneous appeal came up for hearing before our learned brother, Venkatesam, J., who, by his order, dates 13-8-64, directed the case to be posted before a Bench for disposal, as he felt that an authoritative decision on the points arising in this appeal is necessary.

(2.) The appeal is filed against the order of the Subordinate Judge, Kakinada, in E. A. No. 1130/62, filed by the Official Receiver, East Godavari, in O. S. No. 85/57 under Ss. 38. 47, 151 and O. 21, R. 58, C. P. C. and S. 52 of the Provincial Insolvency Act praying in E. P. No. 268/62 to the Official Receiver for administration on the insolvency side. The Subordinate Judge ordered that the execution so far as the judgment-debtors 1, 2 and 5 to 8 are concerned, who were not insolvents, should be stopped and that the property belonging to the judgment-debtors 1 and 2 and should be delivered to the Official Receiver. In I. P. No. 16/64, one Kancherla Achiraju alias Bulli Jaggayya, Kancherla Mallikharjuna Rao and Devata China Yerakayya were adjudged insolvents on 12-7-58 on a creditors petition. During the pendency of the I. P., the appellant in this appeal filed O. S. No. 85/57 on 14-11-57 to recover a sum of Rs. 112,691-10-8 from defendants 1, 3 and 5 therein personally and from the joint family properties of all the defendants being the balance of principal and interest due on a promissory note, dated 26-11-51 executed by defendants 1, 3 and 5 in plaintiffs favour for Rs. 10,000. Defendants 1, 3 and 5 were the persons adjudged as insolvents in I. P. No. 16/64. The 2nd defendant is the son of the 1st defendant. China Yerakayya. The 6 and 7 are the sons of the 5th defendant. The 8th defendant is the son of the 6th defendant. Thus, it is clear that the suit was filed not only against their sons praying for a decree against their joint family properties. The Official Receiver, East Godavari, was added as the 9th defendant as per the order, dated 15-12-58 in I. A. No. 1660/58. The Subordinate Judges Court, Kakinada passed a decree on 27-1-59 in plaintiffs favour, the operative portion of which is as follows:-

(3.) After obtaining the decree, the decree-holder filed E. P. No. 268/61 for executing the decree against the attached property. Then, the Official Receiver filed E. A. No. 1130/62, out of which this appeal arises. In the E. A., it was alleged that the decree-holders right is only to claim a dividend along with the other creditors in the insolvency proceeding, but not to proceed in execution for his own benefit to the exclusion of the other creditors. It was further alleged that leave of the insolvency Court was not obtained for presenting the execution proceedings and that, therefore, the execution petition liable to be dismissed. It was also alleged that the properties sought to be sold in execution are the self-acquired properties of the judgment-debtors 1 and 5 and that their sons have no share therein and that even if they are found to be their joint family properties, the execution of the decree cannot be taken against the insolvents share or even against the sons shares in view of Ss. 28 and 28-A of the Provincial Insolvency Act. on these allegations, the Official Receiver prayed that the execution proceedings may be stopped in accordance with the provisions of S. 52 of the Provincial Insolvency Act and that the attached property may be ordered to be delivered to the Official Receiver for administration in insolvency. This application was opposed on behalf of the decree-holder. On his behalf, it was contended that the property attached and sought to be proceeded against is the joint family property of the insolvent and their sons and not the self-acquired property of the insolvents and that the decree-holder is entitled to proceed against their sons shares by bringing them to sale to realise the decree amount. He also invited the executing Court to decide the question whether the property is the self-acquired property of the insolvents as alleged by the Official Receiver or the joint family property of the insolvents and their sons.