DRONADULA SRIRAMULU Vs. PONAKAVIRA REDDI

JUDGEMENT

(1.) In concurring in the order which my learned brother proposes, I do not desire to follow him further than is necessary to support his conclusion.

(2.) The decision under appeal is in terms that the District Munsif erred in removing the name of the 5 creditor, here respondent, from the list of creditors; and we have to con sider whether he had power to do this and if so, whether we ran accept the order made in the exercise of that power. By an irregular and confused course of procedure and pleading, to which my learned brother has referred, that order involved the conclusion, not only that 5th creditor's debt was not proveable in the insolvency, but also that the mortgage se curing it was invalid. The objection thus allowed was taken as follows in a counter-petition of 1st creditor : "The mort gage for Rs. 500 said to have been executed by petitioner (the insolvent) and his father in favour of 5 creditor was created for the benefit of the insolvent and with the intention of evading payment of the debts due to 1 creditor and others and nominally, but is not a true debt. Nothing is payable to the 5 creditor.

(3.) This, it is contended, means only that Ex. A. the mortgage, offends against, Section 53, Transfer of Property Act, and that, as it does not come within Section 35 or 36 of Act III of 1907, which is applicable to this insolvency, there could be no adjudication on its validity by the District Munsif in insolvency or otherwise than in a separate suit, because, shortly, the insolvency Court cannot adjudicate on claims by or against third parties. The question thus raised is of some difficulty in connection with Act III of 1907 owing to the absence therefrom of anything corresponding with Section 4 of the present Act V of 1920 or Section 105 of the English Act or the corresponding provisions of previous statutes.