MANDAVILLI RAMANNA Vs. OFFICIAL RECEIVER, GODAVARI

JUDGEMENT

(1.) This is an appeal against the order of the District Judge of Godavari setting aside the sale of two native schooners in favour of the appellant by an insolvent, V.K. Subramania Pillai, a native of Ceylon. The insolvent was carrying on ship building business in the Godavari District from 1917 to 1920 and in the course of this business he was purchasing timber and iron goods from merchants in that district and became indebted to them. The appellant is one of such merchants. He was supplying him with iron goods and money. The last promissory note between the appellant and the insolvent Ex. XIX, dated 1 October, 1919, purports to be for Rs. 30,000. Along with it an agreement. Ex. XXI, was said to have been executed on the same day giving his ships as security for the money. The ships were sold by transfer of registry before the Port Officer on 19 January, 1920. Vide Exs. XV, XVI, XVII. Within a month after this, it is said that the insolvent left the district. The suits were filed against him and attachment orders were obtained. On 14 April, 1920, there was an application for declaring him an insolvent. He was adjudicated in November, 1920.

(2.) The Official Receiver referred the question of genuineness of the sales to the Court and the accounts of the appellant were filed before the Court. These consist of ledgers, chittas and rough chittas. The lower Court found the day books, Exs. XVII, (a), (b), (c), (d) and ledgers, Exs. I, II, and IV series as representing true transactions but it suspected the genuineness of Exs. III, V, VI, VII, VIII; Ex. VIII, purports to be a separate chitta for money-lending business from 24 March, 1919. The items of credit in it are items brought from the godown account and all appear in Exs.. VIII, (6), (c), (d), and so long as Exs. VIII, (a), (b), (c) and (d) are said to be genuine there is no point in attacking the genuineness of Ex. VIII. We think that Ex. VIII, is genuine and is supported by the other account books in the case. It follows that there is no reason to suspect the ledgers. It is clear, therefore, that Subramania Pillai, the insolvent, was indebted to the appellant to the extent of Rs. 30,000 upto October, 1919, and Rs. 42,000 upto January, 1920.

(3.) The only question then that remains is whether the agreement, Ex. XXI, executed on 1st October, 1919, is a genuine document, i.e., whether it was executed on the date it bears and was not a collusive later transaction antedated. On this point the appellant has examined three witnesses besides himself. His 2nd and 3 witnesses are the attestors of the document and the 4 witness who was his clerk; is the writer. The 2nd witness is employed in the Imperial Bank as a shroff on a salary of Rs. 85 and he is also related to the appellant. The 3rd witness is a goldsmith who lives in front of his house. The agreement purports to be executed on 1 October--the date of the document. We do not find any suspicious circumstances in connection with this document. We think, therefore, that the ships were given as security on 1 October, 1919. [A] A creditor is entitled to protect himself and overreach the other creditors apart from the insolvency law. [A] Under the insolvency law such transactions can be questioned only if within three months before adjudication. Here, the document giving the ships .as security was more than 3 months before adjudication and, therefore, cannot be questioned. The sale of the 19 January may be questioned on that ground. Otherwise we think it is perfectly genuine.