RAMANATHAN CHETTIAR Vs. SUBRAMANIAN CHETTIAR

JUDGEMENT

(1.) The facts of this case are not disputed. In execution of a decree against the respondent, his properties were brought to sale on the 27 of June, 1922, and his auction-purchaser deposited 25 per cent, of the sale-proceeds in the District Muasiff's Court at Tiruppur. On the 1 of July, 1922, an Insolvency Petition was filed against the 2nd respondent and the Official Receiver was appointed interim Receiver, on the 4 of July, 1922. The balance of the purchase-money was deposited on the 11 of July, 1922, and the 2nd respondent was adjudicated an insolvent, on the 15 of September, 1922. In the meanwhile, the sale-proceeds of the 2nd respondent's properties were forwarded to the Official Receiver by the District Munsiff. On the 26 of July, 1922, an application was filed before the District Judge of Coimbatore by the creditor, who attached the properties and brought them to sale for the re-transfer to the District Munsif's Court of Tiruppur of the sale-proceeds, to be dealt with by him, according to law. The petitioning creditor who applied under the Insolvency law for the adjudication of the debtor as an insolvent and for the appointment of the interim Receiver resisted-this application and the District Judge rejected it. This appeal is by the creditor again3t the order of the District Judge, refusing to re-transfer to the District Munsiff's Court of Tiruppur, the sale-proceeds of the 2nd respondent's properties, now in the possession of the interim Receiver.

(2.) The principle of law to be applied to the decision of this appeal is embodied in Section 51, Clause (1) of the Provincial Insolvency Act, which runs as follows: Where execution of a decree issued against the property of a debtor, no person shall be entitled to the benefit of the execution against Receiver, except in respect of assets realised in the course of the execution by sale or otherwise before the date of the admission of the petition.

(3.) It has been argued by Mr. Krishna swamy Aiyar that, according to this Section, irrespective of the time of realisation, assets realised in the course of execution by a sale, which has been held before the date of the admission of the Insolvency petition are preserved, for the benefit of the execution creditor; or in other words, if the sale by means of which the assests are realised is held before the date of the admission of the petition, then the assets, even if they be realised, after the date of the admission of the petition, enure to the advantage of the execution creditor. Shortly stated, this argument makes the " date of the admission of the petition" qualify the "sale" and not " assets realised " in the section. The records in the case do not show the date of the admission of the petition ; but, for the purpose of this appeal, the date may be taken to be sometime between the 1 and 4 of July ; in any event, it cannot have been later then the 4 of July, when the interim Receiver was appointed. Since the execution sale in this case was held on the 27 of June, 1922, (i.e.) anterior to the 4 of July, it follows from the argument just stated that the appellant-creditor is entitled to all the assets, as against the interim Receiver. We cannot accept this argument. It seems to us, that: the policy and the object of the statute is to secure the even distribution of a debtor's estate among his creditors, and to prevent the more active creditora from getting an undue advantage over these who may be less active. Bower V/s. Hett (1895) 2 Q.B. 51.