OFFICIAL RECEIVER Vs. SAGIRAJU SUBBAYYA

JUDGEMENT

(1.) This is an appeal from an appellate order dismissing an application by the Official Receiver in I. P. No. 145 of 1925 to have two gift deeds, executed by the insolvent in favour of two counter-petitioners, declared fraudulent. The adjudication was on 6 January, 1926, on a petition dated 1 December, 1925. The two gift deeds are dated respectively 8 September, 1922 and 22nd March, 1922. The donees are the two wives of the insolvent. Admittedly the deeds are dated more than two years before the date of adjudication. Consequently Section 53 of the Provincial Insolvency Act does not apply, and the question is whether the petition under Section 53 of the Transfer of Property Act is cognizable under Section 4 of the Provincial Insolvency Act. The learned District Munsif held that the petition was barred by Section 53 of the Provincial Insolvency Act. There is no discussion of the matter in his judgment, but the Principal Subordinate Judge has written a fairly long judgment agreeing with the view taken by the Court of First Instance. The main ground on which he decides the matter is, that while the petition might have been cognizable if the original transfer of the property was a nullity, the Insolvency Act does not apply when it is only voidable. I am unable in the light of the decisions of this Court to agree with his view.

(2.) The first case to be considered is Dronadula Sriramulu V/s. Ponakavira Reddi . This was under Act III of 1907 which did not contain present Section 4. The alienations there were more than two years old and the question was whether they were within the cognizance of the Insolvency Court It was there held that the allegations in the petition were sufficient to make the application one to set aside documents as void even though the word voidable was used. Applying this view as to void and voidable in the present case the allegations in the petition of the Official Receiver amount, I consider, to a statement that the deeds are void. He says in paragraph 6: In spite of the said gift deeds the insolvent continues to be in possession of the properties in the schedule.

(3.) He says in paragraphs 7 and 8 as follows: The counter-petitioners being the wives of the insolvent, and the gift deeds having been executed with the object of keeping back the properties from being available for creditors and thus defeating the claims of the creditors, the gifts are fraudulent and collusive and are therefore voidable as against the Official Receiver. The said alienations though made more than two years before the date of the presentation of the insolvency petition, they are not valid under Section 53, Transfer of Property Act, and can therefore be annulled by this Court, under Section 4, Provincial Insolvency Act.