YERABALU CHENNABASAPPA Vs. OFFICIAL RECEIVER OF BELLARY

JUDGEMENT

(1.) The appellant was adjudicated an insolvent, but because he did not apply for discharge within the time allowed, his adjudication was annulled. In annulling the adjudication the Insolvency Court passed an order continuing the property in the Official Receiver.

(2.) The primary duty of the Official Receiver being to realise the property and sell it and to distribute the proceeds, he advertised the property for sale; and on the day before the sale took place the insolvent put in an application asking for two reliefs; one to stay the sale, and the other to scale down the debt. The application, as far as the prayer for stay was concerned, was dismissed; but the application to scale down was adjourned. The sale took place on the advertised date; and ten days later, on 14 March, 1941, the insolvent put in another application to stay all further sale proceedings and to set aside the sale on account of certain irregularities. As that application, too, was dismissed, the insolvent carried the matter in appeal to the District Judge, who dismissed his application on several grounds. One was that the insolvent had no locus slandi; because he was not an interested party. Another was that the persons who had acquired rights under the sale were not made parties, and thirdly, on the merits, the learned District Judge thought that the objections raised were frivolous.

(3.) One of the points raised by the appellant was that the Official Receiver had no power to sell; and for that purpose he relied on some observations in the judgment of King, J., in the Full Bench decision in Veerayya V/s. Srinivasa Rao (1935) 69 M.L.J. 364 : I.L.R. 58 Mad. 908 (F.B.). The learned Judges were there considering the powers of a receiver or other person appointed to continue the administration of the property after the annulment, and they held that the receiver or other person appointed has only such powers as are necessarily implied by the vesting order, which are to carry out the directions of the Court, which direction should, as far as the realisation and distribution of the debtor's property are concerned, be in accordance with the provisions of the Insolvency Act. I do not read into these sentences any finding that the Official Receiver or other person appointed has to apply to the Insolvency Court for directions with regard to powers that are obviously intended to be conferred by the order vesting the property in the Official Receiver. The principal purpose of continuing the property in the Official Receiver is that he might sell the property and distribute the proceeds. That power must be implied from the order itself.