VIRUPAKSHA REDDI Vs. CHANALAL SIVA REDDI

JUDGEMENT

(1.) This is an appeal from the preliminary decree passed by the District Judge of Bellary in a suit for partition instituted by the appellants, who are the sons of Chenabasavana Gowd. Chenabasavana Gowd was the third defendant. The first two defendants are his elder broilers. Ayyana Gowd, the eldest, died during the pendency of the suit. His son was the fourth defendant in the suit and the third respondent here. Siva Reddy, the next brother, was the second defendant in the Ccurt below and the first respondent in the appeal. On the 16th February, 1932, Ayyana Gowd was adjudicated on a creditor's petition, I.P. No. 43 of 1931. Later, on the 20 December, 1933, the two other brothers were also adjudicated insolvents. After the adjudication the Official Receiver, in whom the property of the inso vents vested, sold on 8 March, 1934, items 2 to 5, 12 to 33 and 34 in schedule B to Chinna Anjanappa who was the sixth defendant and now the fifth respondent. The appellants Contended in the Court below that their interest in the family property did not vest in the Official Receiver and that the sale by him in favour of Anjanappa did not affect their interest at all. They also contended that Ayyana Gowd and his two brothers had by an oral partition in 1927 become divided in interest. In fact, they went further and said that the properties mentioned in schedule B fell to the share of their father Chenabasavana Gowd. Both these questions, namely, (1) whether there was a division as alleged by them, and (2) whether the sale by the Official Receiver in favour of the fifth respondent is binding on the appellants, were decided against thorn by the District Judge, and hence they have appealed.

(2.) The learned District Judge did not try these questions on their merits because he held that there were previous decisions binding upon the parties which made the matter res judicata. When the two brothers Siva Reddi and Chenabasavana Gowd were sought to be adjudicated insolvents they set up the plea that they had become divided from their eldest brother Ayyana Gowd who alone it was said carried on the business which resulted in loss and consequent liabilities in favour of creditors. It was their case that at the partition properties were separately allotted to the two younger brothers, Ayyana Gowd being given for his share a cotton ginning factory. The question of partition so set up was gone into in a proceeding to which the appellants father and the Official Receiver were parties and the decision was given by the District Court of Bellary that the alleged division had not been established. It seems to us that this decision precludes the appellants from re-agitating the question. In a dispute of this kind their father Chenabasavana Gowd must be taken to have represented not only himself but also his undivided sons who were as much interested in the dispute as himself. That being so, we concur with the learned District Judge in holding that the finding that there was no division in the family in 1927 binds the appellants.

(3.) On the second question, however, we are unable to accept the decision of the learned District Judge. At the time when he decided the case the decisions under the statutes relating to insolvency had left the question as to what vests in the Official Receiver on the adjudication of a father or managing member, in a state of uncertainty. There were two decisions of this Court, Seetharama Chettiar V/s. Official Receiver, Tanjore and Official Receiver, Anantapur v. Ramachandrappa , both decided under the Provincial Insolvency Act, which had held that the power of the father and of the manager respectively to sell the interests of the other members in the family property vests in the Official Receiver, an their adjudication as insolvents. But as the reasoning on which these decisions proceeded was found to be inconsistent with a later decision of the Privy Council in Sat Narain V/s. Sri Kishen Das, Some V/s. Bank of Upper India (1936) 71 M.L.J. 812 : L.R. 63 I.A. 384, the question had to be reconsidered by a Full Bench in the case reported as Ramasastrulu V/s. Balakrishna Rao , which, it is to be observed, related to the power of a manager and not to that of a father. The Full Bench held that the manager's power does not devolve on the Official Receiver, and this result was reached on a consideration of the decisions of the Privy Council in Sat Narain V/s. Behari Lal and Sat Narain v. Sri Kishen Das: Same V/s. Bank of Upper India both of which had reference to the power of the father and not of the manager under the Presidency Towns Insolvency Act. The Court pointed out that the Privy Council had held the power to vest in the Official Assignee by virtue of the special provision contained in Section 52(2)(b) of the Presidency Towns Insolvency Act; for which, it is to be remembered, there is no counterpart in the Provincial Act, and not because the power was or could beseemed to be property, as defined in the Act and capable of vesting in the Official Assignee under the vesting section. The effect of the Privy Council decisions was stated to be that they undoubtedly negatived the law as previously understood in this Court, and it was observed that if the power of the father is not property under the Presidency Towns Insolvency Act, it cannot be regarded as property under the Provincial Insolvency Act, and if the father's power is not property, the power of the manager who is not the father cannot be property either. It is plain on a reading of the Full Bench judgment that the line of reasoning adopted by the Privy Council in discussing the father's power formed the basis of the decision with respect to the devolution of the manager's power.