PAPPANAICKENPALAYAMPUDUR RAMA VILAS NIDHI, LTD BY ITS SECRETARY G KUPPUSWAMI NAIDU Vs. MINOR PERA NAICKEN REPRESENTED BY GUARDIAN KRISHNAMA NAICKEN

JUDGEMENT

(1.) The facts of this case are very simple. I take the following statement of them from the order of Varadachariar, J., who referred this matter for disposal by a Bench: This Second Appeal arises out of a suit brought by a creditor of the third defendant to have it declared that a decree for partition which defendants 1 and 2 obtained in O.S. No. 1466 of 1926 on the file of the Additional District Munsif's Court of Coimbatore against the fourth defendant, the Official Receiver of Coimbatore, is not binding upon the creditors. The plaintiff has been permitted to file the suit on behalf of all the creditors of the insolvent. Defendants 1 and 2 are the sons of the third defendant admittedly born after the property had vested in the Official Receiver by reason of the third defendant's insolvency. They nevertheless filed O.S. No. 1466 claiming partition of the family property and the Official Receiver who was impleaded as a defendant in that suit did not appear at the hearing, with the result that they got a decree for partition which is obviously unsustainable on the merits. The Official Receiver filed a belated application for setting aside the ex parte decree, pleading his forgetfulness in the midst of heavy work; but as even this application was filed out of time, the Court dismissed the application. The creditors have accordingly filed this suit to have it declared that that decree which was the result of gross neglect on the part of the Official Receiver is not binding upon the estate.

(2.) The learned District Munsif dismissed the suit holding that the creditors could not file such a suit and that: the remedy of the creditors who are aggrieved by the fraudulent or negligent conduct of the Receiver is to take proceedings against the Official Receiver under Section 56 of the Provincial Insolvency Act.

(3.) The learned Subordinate Judge in appeal supported the decision of the learned District Munsif. He agreed that the Official Receiver had been guilty of gross negligence but held that the creditors must be bound by the result of the suit irrespective of the negligence of the Official Receiver.