(MANDAVALLI) RAMMANNA Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) This is an appeal against the order of the District Judge of Godaveri 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 Godaveri District from 1917 to 1920 and in the course of this business he was purchasing timber and iron goods from merchants in the 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. 19, dated 1 October 19, purports to be for Rs. 30,000. Along with it an agreement, Ex. 21 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 20, vide Exs. 15 16, and 17. Within a month after this, it is said that the insolvent left the District. Suits were filed against him and attachment orders were obtained. On the 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 the genuineness of the sales to the Court and the accounts of the appellant were filed before the Courts. These consist of ledgers, chittas and rough chittas. The lower Court found the day books, Exs. 1, 2 and 4 series as representing true transactions but it suspected the genuineness of Exs. 3, 5, 6, 7 and 8. Ex. 8 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. 8 (a), (b) (c) and (d) and so long as Exs. 8 (a), (b) (c) and (d) are said to be geneuine, there is no point in attacking the genuineness of Ex. 8. We think that Ex. 8 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. 80,000 up to October 1919 and Rs. 42,000, up to January 1920.

(3.) The only question then that remains is whether the agreement Ex. 21, executed on 1st October 1919, is a genuine document, that is, 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 witnesses 2 and 3 are the attestors of the document and 4 witness who was his clerk, is the writer. Witness 2 is employed in the Imperial Bank as a shroff on a salary of Rs. 85, and he is also related to the appellant. The 3 witness is a gold- smith who lives in front of his house. The agreement purports to be executed on the 1st October, the date of the document. We do not find any suspicious circumstances in connexion with this document. We think, therefore, that the ships were given as security on 1 October 1919. A creditor is entitled to protect himself and overreach the other creditors apart from the Insolvency Law. 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 three months before the 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.