VEKACHERLA SUMITRA Vs. VAKACHERLA LAKSHMINARAYANA RAO

JUDGEMENT

(1.) Chinnappa Reddy, J. 1. Defendants 4, 5 and 8 to 11 in O.S. No. 69/1964 on the file of the Court Additional District Judge, Rajahmundry are the appellants in this appeal. They and respondents 4 and 5 are the legal representatives of the first defendant who died during the pendency of the suit in the lower Court. The plaintiff is the brother of the first defendant. The 2nd defendant is their sister. The suit was filed to recover one-third of the amount said to have been deposited by their mother Seetharathnam with the first defendant. Various defences were raised by the first defendant all of which were over-ruled by the learned Additional District Judge and the suit was decreed. The legal representatives of the first defendant have preferred this appeal.

(2.) The first submission of Sri N. Bapi Raju, learned counsel for the appellants was that the plaintiff was an undischarged insolvent on the date of the filing of the suit and, therefore, the suit itself was not maintainable. To appreciate the argument it is necessary to mention a few facts. The plaintiff was adjudged an insolvent in I.P.No. 9/1958 on the file of the District Court, Rajahmundry and his properties became vested in the Official Receiver. Seetharathnam, the mother of the plaintiff and defendants 1 and 2 died on 15-2-1961. The present suit was filed on 17-2-1964. The adjudication was annulled on 4- 3 -1964 But, simultaneously an order for the vesting of the properties in the Official Receiver was also made. The Official Receiver was impleaded as a party to the suit on 6-1-1965.

(3.) According to the allegation of the plaintiff he became entitled to a share of the amount said to have been deposited by Seetharathnam with the first defendant on the death of Seetharathnam on 15-2-1961. Under Section 28(4) of the Provincial Insolvency Act property acquired by or devolving on an insolvent after the date of adjudication before his discharge forthwith vests in the Court or the Receiver. Therefore, on the death of Seetharathnam the share of the plaintiff, if any, in the deposit made by Seetharathnam with the first defendant vested in the Official Receiver. The Official Reciver alone was competent to lay the suit and not the insolvent. This position is now well settled. In Satyanarayana Murty v. Papaiah (1) (1941 (2) M.L.J. 834) a Division Bench of the Madras High Court pointed out that the doctrine of Cohen V. Mitchell (2) (1860 (25) Q.B. 262) did not apply to cases arising under Section 28 (4) of the PROVINCIAL INSOLVENCY ACT, 1920 and held that under Section 28 (4) all property acquired by an insolvent subsequent to the date of adjudication and before discharge vested in the Official Receiver, the moment the acquisition was made. A transfer by the insolvent after the adjudication and before the discharge was not valid and where the transfer was of a decree for costs the transfer would not be recognised by the Court. The learned Judges relied upon the observations of the Privy Council in Kalachand Benerjee V. Jagannath Marwari (3) 52 M.L.J. 734 to the following effect.