MANTHIRI GOUNDAN Vs. ARUNACHALAM GOUNDAN

JUDGEMENT

(1.) These appeals are connected. One is from an order dismissing the application of the appellant to restore to file the petition to set aside a sale presented by him which had been dismissed for default; and the other is an appeal from the order dismissing the petition to set aside the sale. The appellant who was the first defendant in O.S. No. 18 of 1934 had been adjudicated an insolvent and the application, was made by him to set aside the sale on various grounds. That application was dismissed for default on the 9 December, 1937. An application to restore the petition to file was made on the next day and that also was dismissed. As a result we have two appeals from the two orders which were passed against the appellant. So far as the application made on the 10th December, 1937, to restore the petition to file is concerned it is not seriously argued that such a petition was competent. The learned Subordinate Judge relied on the Full Bench decision in Arunachalam V/s. Veerappa Chettiar and his finding to the effect that the petition to restore the application to set aside the sale is not maintainable is obviously right. It follows from this that C.M.A. No. 304 of 1938 has no substance and must be dismissed. It is accordingly dismissed with costs.

(2.) The other appeal which is from the order dismissing the application to set aside the sale is pressed mainly on the ground that the finding of the Court below that such an application made by the appellant is not competent because he had been adjudicated as an insolvent is wrong, and further on the ground that on the merits it had been held that the appellant was really disabled by illness from attending Court when his application came on for hearing and therefore the application for adjournment that was made to the Court below on this ground of illness ought to have been allowed instead of being rejected. The first point, namely, the appellant's right to apply to have the sale set aside is governed by the provisions of Order 21, Rule 90 of the Civil Procedure Code under which the application was made. That rule provides that any person whose interests are affected by the sale may apply to set aside the sale. The question therefore for decision is whether the appellant is not a person whose interests are affected by the sale of the properties in question. Those properties were undoubtedly his properties which had been mortgaged and which had been sold in execution of the mortgage decree. His adjudication as an insolvent and the vesting of these properties and all his other properties in the Official Receiver no doubt deprived him of all interest in the property in praesenti. But does this mean that he ceased to be a person whose interests are affected by the sale of the properties? The point is realty concluded in our opinion by the Full Bench decision in Subbaraya Goundan V/s. Veerappa Chettiar Bank . That was also a case of an insolvent and it was held that the insolvency of the judgment-debtor did not per se render it incompetent for him to continue proceedings initiated by him under Order 21, Rule 90 and that he had also a right to prefer an appeal from an order dismissing such an application. There is an earlier case reported at page 359 of the same volume of the Madras Law Journal decided by a single Judge, namely, Swaminatha Odayar V/s. Kalyanarama Aiyangar . We have also been referred to the latest Full Bench decision in Ayyappa V/s. Kasi Perumal , in which it is pointed out by the learned Chief Justice that the narrower meaning given to the phrase "whose interests are affected by the sale" in certain decisions is not the correct meaning to be given to those words but that the words should be taken to mean any person whose pecuniary interests are immediately and directly affected and that the decision to Kathiresan Chettiar V/s. Ramasami Chettiar , which interpreted the words to mean having an interest in the property sold was wrong, and that decision was overruled expressly by the Full Bench.

(3.) In these circumstances it is obvious that the learned Subordinate Judge was not right in coming to the contrary conclusion relying on the cases reported in Hari Rao V/s. Official Assignee, Madras and Venkataramanayya V/s. Bangarayya (1934) 67M.L.J. 942, which were hot concerned with the words with which we are now concerned, namely, the words found in Order 21, Rule 90, but with the word "aggrieved" found in the Insolvency Acts. It seems to us that the words "whose interests are affected by the sale" must be construed in their ordinary sense, and it is too much to say that merely because a person is adjudicated insolvent his interests are not adversely affected by the sale of property that belonged to him before adjudication. For instance, if the insolvent's property is really worth a lakh of rupees and is sold fraudulently for Rs. 10,000 his interests are clearly affected by such a sale. There is no reason why these words should be interpreted in a narrow sense; on the other hand, as observed already, the point is concluded by authority which is binding on us and we would follow it even if it was not so binding because we take the same view. We find therefore that the lower Court's finding on the right of the appellant to present the application to set aside the sale is wrong and that he is entitled to present the application and to ask the Court to adjudicate upon it.