K SAMBASIVA AIYAR Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) These are appeals by five persons who were in 1933 some of the creditors of one Kasinatha Aiyar. One of the appellants in C. M. S. A. No. 136 (respondent 6 in the Courts below) was pursuing execution against Kasinatha Aiyar and on 30th June, 1933, three lots of Kasinatha Aiyar's property were sold in Court auction. Two lots in Annakudi village were sold for Rs. 7,500, which amount was paid in full there and then. The third lot in Manikandi village was sold for Rs. 4,520. One quarter of this amount was deposited on 30 June as required by Order 21, Rule 84, and the remaining three-quarters on 4 July. The sum of Rs. 12,020 was treated as assets realised and rateably distributed amongst the appellants and another creditor who has not appealed. On 3 July, an insolvency petition was presented against Kasinatha Aiyar which resulted in his adjudication. The Official Receiver in administering his estate applied to the Court for an order directing the appellants to pay to him the sums which had thus been distributed to them, with interest: and such an order has been passed in appeal by the learned District Judge of West Tanjore under the provisions of Section 51 of the Provincial Insolvency Act. Whether that order is right or wrong is the issue in these appeals.

(2.) Section 51 (1) of the Provincial Insolvency Act runs as follows: Where execution of a decree has issued against the property of a debtor no person shall be entitled to the benefit of the execution against the Receiver except in respect of assets realised in the course of the execution by sale or otherwise before the date of the admission of the petition. There are four points for determination in these appeals: (i) What is the date of the admission of the insolvency petition? (ii) What is the date (or, are the dates) of the realisation of the assets? (iii) If the Receiver is found entitled to all or any of these assets what is the precise meaning of benefit of the execution? and (iv) Is the Receiver entitled to interest on any sum awarded to him?

(3.) On the first point the District Judge has held that the insolvency petition was admitted on 3 July. I have already mentioned that it was presented on that date. On its presentation the Court ordered check and file emergently . Itwas checked and was filed, and on the same day the Court further ordered that publication charges should be deposited by 7 July. On 7 July, notice and publication were ordered. It is now argued for the appellants that the insolvency petition was not admitted until 7 July, and I am referred to a ruling in Narasimha Pattamahadevi V/s. Annan Naidu as an authority for the position that the order to issue notice constitutes the act of admission. In many cases this may well be so but it cannot be a universal rule of law. In the present case it cannot be disputed that the Court on 3 July accepted the insolvency petition as having been validly presented, and that, in my opinion, means that the insolvency petition was admitted on that day. I hold accordingly and it will now follow that any assets realised after 3 July must go to the Official Receiver.