PARAMATMUNI HANUMANTHA RAO Vs. OFFICIAL RECEIVER GUNTUR

JUDGEMENT

(1.) These appeals arise out of proceedings under Section 4 of the Provincial Insolvency Act.

(2.) One Parametmuni Seshachalam settled his lands and house in favour of his sisters son, Nimmaraju Seetaramachandrarao, by a registered deed dated 12-6-58. janakiramarao, the brother of the settle and another creditor of Seshachalam moved the Subordinate Judge, Ongole, in I. P. 21/58 for the adjudication of Seshachalam as an insolvent treating the settlement made by him in favour of Setaramachandrarao as an act of insolvency. Seshachalam was adjudged insolvent on 29-9-59. On 17-3-60. Paramatmuni Hanumantharao purchased from Seetharamachandrasrao the lands which the insolvent settled on him, for Rs. 600.00 under a registered sale deed, Ex. A-1. On the same day, Seetharamachandrarao sold the house, which is the only other item of property that was settled on him by the insolvent, to Appala Parameswarudu under Ex. A-2. On 17-12-62, the Official Receiver, in whom the estate of Seshachalam vested consequent on his adjudication as insolvent, filed I. A. 351/62 for annulment of the settlement made by the insolvent in favour of Seetharamachandrarao, under Section 53 of the Provincial Insolvency Act. He did not however impaled the vendees under Exs. A-1 and A-2 as parties to his application though they purchased the properties from Seetharamchandrarao more than two years before then. This application was allowed and the settlement effected by Seshachalam in favour of his nephew was anulled on 17-12-63. When the Official Receiver thereafter commenced to take steps for bringing to sale, the properties which were the subject matter of the settlement in favour of Seetharamachandrarao, the vendees under Exts. A-1 and A-2 moved the Subordinate Judge, Ongole, under S. 4 of the Provincial Insolvency Act, in I. A. Nos. 1597 and 1599 of 1964 for declaration of their title to the properties and also for in injunction restraining the Official Receiver from interfering with their peaceful possession and enjoyment of the same. These petitions were opposed by the Official Receiver who contended inter alia that the petitioners were bound by the order of annulment passed in I. A. 351/62 and that the transfers which they obtained under Exs. A-1 and A-2 from Seetaramachandrarao, being only voidablem will continue to be valid till they are set aside and accordingly allowed I. A. Nos. 1957 and 1599 of 64 observing at the same time that "The Official Receiver is at liberty to file a petition under Section 53 or Section 4 of the Provincial Insolvency Act challenging these alilenations in favour of the petitioners." On appeal by the Official Receiver, the learned Additional District Judge, Guntur, held that the settlement effected by the insolvent in favour of Seetharamchandrarao was void and that the petitioners are therefore bound by the order which the Official Receiver obtained in I. A. 351/62 though they were not eo nomine parties to that application. He accordingly allowed the appeals and dismissed I. A. Nos. 1597 and 1599 of 64. Aggrieved by this decision, the petitioners in I. S. Nos. 1597 and 1599 of 64 have preferred these Civil Miscellaneous Second Appeals as, according to them, the finding arrived at by the lower appellate Court that the settlement effected by Seshachalam in favour of their transferor was void and that they are consequently bound by the order made in I. A. 351/62 notwithstanding their not having been impleaded as parties thereto, is contrary to law.

(3.) The points that therefore arise for consideration in these appeals are (1) whether the annulment of the transfer in favour of Seetahramachandrarao, in I. A. 351/62, is binding on the appellants and (2) if not, whether they are entitled to the relief of declaration and injunction sought by them.