OFFICIAL RECEIVER Vs. RMNAGARATNA MUDALIAR

JUDGEMENT

(1.) I shall briefly state the facts that have given rise to this appeal. Execution was taken out of a money decree and the judgment-debtor agreed to pay the decree- holder interest at an enhanced rate and executed in his favour a security bond in respect of certain immoveable properties. As a result of this an order was made postponing execution under Order 20, Rule 11, Civil Procedure Code. The judgment-debtor was subs equently adjudicated an insolvent and on the decree- holder seeking to attach the properties secured and bring them to sale, the Official Receiver applied to the Insolvency Court for an order to stay the sale directed by the executing Court. The application was refused by the District Judge of East Tanjore and this appeal has been filed questioning the correctness of his order.

(2.) Mr. Varadachariar, the learned vakil for the decree-holder, objected that apart from the merits of the case the Insolvency Court would have no power to make an order binding upon the Court executing the decree. As on hearing full arguments on the other contentions raised we intimated that we were against the appellant ; Mr. Varadachariar did not have to argue the point relating to the power of the Insolvency Court. I shall therefore proceed to deal with the case as if the objection to the property being sold had been raised before the executing Court itself.

(3.) Mr. T.M. Krishnaswarni Aiyar, the learned vakil for the appellant, advanced two main contentions;- (1) A security of this kind cannot be enforced in execution, as to do so will contravene the terms of Order 34, Rule 14, Civil Procedure Code. (2) That under Section 52 of the Provincial Insolvency Act (V of 1920) the executing Court on being informed that the judgment-debtor has become an insolvent is bound to stay the sale and direct the property to be handed to the Receiver in insolvency.