OFFICIAL RECEIVER OF TRICHINOPOLY Vs. SASOMASUNDARAM CHETTIAR

JUDGEMENT

(1.) The question in this case is whether the trustees under Exs. II and III are purchasers for valuable consideration. In Narayan Coomari Debi v. Shajani Kanta Chatterjee (1894) I.L.R. 22 C. 14, it was held that a contract to pay remuneration to a person appointed as an executor was a contract for valuable consideration proceeding from the person appointed as an executor. The learned Judges say at page 18 "The plaintiff who was not legally bound to accept the office of executor,...applied for probate as executor, and having obtained probate, he performed duties of the executor." "There was thus, we think, a clear consideration for the alleged contract. (See Indian Contract Act, Section 2(d), Addison on Contracts, page 2, 9th Edition, and Pollock on Contracts, 5th Edition, page 176)." A responsibility therefore taken by a person to whom properties are transferred in consideration of his taking such onerous work seems to me to fall within the expression "valuable consideration" found in Section 38 and Section 38 (c) of the Provincial Insolvency Act, Hence the three creditors who undertook to be trustees of the insolvents properties for the benefit of all the creditors and have admittedly been discharging the duties of trustees do come in my opinion within the protection afforded to transferees for valuable consideration in Sections 36 and 38.

(2.) So far as regards the property, (a house,) not transferred to them under the trust-deeds, the Official Receiver is entitled to take possession of it notwithstanding the promise of most of the creditors made to the insolvents not to proceed against it for realization of their claims.

(3.) Section 16 Clause 2(a), no doubt, makes the whole of the property of the insolvents "to be vested in the Court or in a receiver as hereinafter provided." 2. But on the execution of Exs. 2 and 3, the properties mentioned therein had ceased to be the property of the insolvents and had become vested in the three creditors as trustees and hence it seems to me that Section 16 Clause 2 (a) which vests only the property of the insolvents in the court or the receiver cannot by itself transfer those properties to the receiver. 3. The words "receiver as hereinafter provided "seem to refer to the succeeding Section 18 which says that the Court may appoint a receiver for the property of the insolvents and that such property shall thereupon vest in the receiver. Section 19(2) says "where any Official Receiver has been appointed for the local limits of the jurisdiction of any Court having jurisdiction, under this Act, he shall be the receiver for the purpose of every order appointing a receiver issued by any such Court." Reading then Sections 16, 18 and 19 together, it seems to me that it is the duty of the Court, if it intends the Official Receiver to become vested with the title to the insolvents property to make an order under Section 18 appointing a receiver. The practice which (I am informed) obtains in the mofussil of treating the Official Receiver as vested with the properties of the insolvents as seen us an adjudication order is made without preliminary order under Section 18 appointing a receiver seems to be illegal.