NORI RAMASASTRULU Vs. TELUGUNTLA BALAKRISHNA RAO

JUDGEMENT

(1.) This Letters Patent Appeal raises the important question whether the right of a manager of a joint Hindu family to sell family assets to discharge debts which are payable out of the joint estate devolves on the Official Receiver when the manager has been adjudicated an insolvent under the Provincial Insolvency Act.

(2.) Two brothers, Ayodhyaramayya and Raghava Rao, were joint in estate. Raghava Rao died in 1923, leaving a son who is the 2nd defendant. After Raghava Rao's death Ayodhyaramayya and his nephew continued to be undivided. On the 24 November, 1927, Ayodhyaramayya was adjudicated an insolvent under the Provincial Insolvency Act, On the 12 March, 1931, in order to discharge debts binding on the family the Official Receiver sold to one Saravayya certain family properties, which included the properties in suit. The properties were subject to mortgages and the sale to Saravayya, was, of course, subject to the rights of the mortgagees. The plaintiff purchased the properties in suit from Saravayya. Ayodhyaramayya and the 2nd defendant owed monies to the 1 defendant, who obtained a decree against them. On the 28 January, 1933, the. 1 defendant attached the properties in suit, whereupon the plaintiff objected, but his objection was overruled. As the result the Court sold the properties by auction and they were purchased by the 1 defendant. The plaintiff then filed the present suit in the Court of the District Munsiff of Bezwada for a declaration that the properties were not liable to attachment by the 1 defendant. The District Munsiff held that the manager's right to sell properties to meet family debts devolved upon the Official Receiver and consequently a valid title had passed to Saravayya. Accordingly the District Munsiff granted the declaration asked for and on appeal the decision was upheld by the Subordinate Judge of Bezwada. The 1 defendant then appealed to this Court. The appeal was heard by Venkataramana Rao, J., who, feeling himself bound by decisions of this Court to which reference will be made later, dismissed the appeal, but in the course of his judgment he indicated that the question whether the manager's right to sell joint family property devolved upon the Official Receiver under the Provincial Insolvency Act required further consideration in view of the decisions of the Privy Council in Sat Narain V/s. Behari Lal (1924) 47 M.L.J. 857: L.R. 52 I.A. 22: I.L.R. 6 Lah. 1 (P.C.). and Sat Narain V/s. Sri Kishen Das (1936) 71 M.L.J. 812: L.R. 63 I.A. 384: I.L.R. 17 Lah. 644 (P.C.).

(3.) Before proceeding to examine the effect of the judgments of the Judicial Committee in Sat Narain V/s. Behari Lal (1924) 47 M.L.J. 857: L.R. 52 I.A. 22: I.L.R. 6 Lah. 1 (P.C.). and Sat Narain V/s. Sri Kishen Das (1936) 71 M.L.J. 812: L.R. 63 I.A. 384: I.L.R. 17 Lah. 644 (P.C.). it is necessary to refer to certain provisions of the Presidency Towns Insolvency Act and the Provincial Insolvency Act.