PULLA SUBBARAMIAH Vs. PALAGARI BALARAMI REDDY

JUDGEMENT

(1.) This is an appeal by the second defendant in O.S. No. 72 of 1929 on the file of the Court of the Subordinate Judge of Nellore, against the order in E.P. No. 98 of 1943. The decree was a money decree against the appellant and two others who were defendants 1 and 3 in the suit. The appellant was adjudged an insolvent on 12 April, 1933, in I.P. No. 82 of 1932, on the file of the District Court of Nellore. The adjudication was annulled on the 8 July, 1937, but the properties were vested in the Official Receiver, Nellore, by an order under Section 37 of the Provincial Insolvency Act. The execution petition out of which this appeal has arisen was first filed against the three defendants. The Official Receiver was subsequently added as the fourth respondent. The prayer in the execution petition so far as the appellant was concerned was two-fold. One was that certain immoveable property which belongs to the second defendant and which is vested in the fourth defendant under Section 37 of the Provincial Insolvency Act in I.P.No. 82 of 1932 on the file of the District Court be caused to be attached and sold. The other was that a warrant should issue for the arrest of the second defendant under Section 55 of the Civil P. C.. The appellant filed a counter-affidavit in which he objected to the execution inter alia on the ground that the execution of the decree was barred by limitation, and that the amount had, in any event, to be scaled down under Madras Act IV of 1938. The Subordinate Judge made a short order in the following terms: Official Receiver in person says that he has no counter. Therefore execution will proceed. As it is, there is no prayer in the execution petition as against second defendant and hence the objections raised by second defendant need not be considered. The prayer is against Official Receiver alone, who is not contesting. A preliminary objection is taken by the respondent's counsel that the appeal is not maintainable. It may at the outset be pointed out that so far at least as the prayer for the arrest of the appellant is concerned the appellant has undoubtedly a right of appeal. This is not contested by the respondent's counsel, but it is said that the question whether a warrant for the arrest of the appellant should issue or not does not arise at this stage and that all that has been decided by the order under appeal is that execution should proceed against the property of the appellant which is vested in the Official Receiver and that the other prayer or prayers in the execution petition must be taken to have been left over for future decision. There is no doubt some ambiguity in the judgment of the Subordinate Judge particularly when it is read in the light of the decretal order which was drawn up. It is obvious, however, that the Subordinate Judge was clearly in error in stating that there is no prayer in the execution petition as against the second defendant. It is on this ground that the Subordinate Judge held that the objections raised by the second defendant need not be considered. It will be noticed that the objections raised by the second defendant, if valid, will affect not only the execution of the decree by arrest but also the execution of the decree against his property vested in the Official Receiver. To say the least, we consider the order of the Subordinate Judge avoiding a consi- deration of the objections raised by the second defendant to be most inadvisable.

(2.) The question, however, on which there was considerable discussion before us was as to whether the appellant can maintain the appeal in respect of the order directing execution to issue against the property. Respondent's counsel relied upon the decision in Sakhawat Ali V/s. Radha Mohan (1918) I.L.R. 41 All. 243, Hari Rao V/s. Official Assignee, Madras ( and Venkataramanayya V/s. Bangarayya (1934) 67 M.L.J. 942. The first of these arose under the Provincial Insolvency Act of 1907. In the course of certain proceedings in insolvency before a District Judge the insolvent filed an application in Court complaining of a sale of property which had been held by the Receiver and urging that it should hot be confirmed. The objection having been disallowed and the sale confirmed, the insolvent appealed to the High Court. It was held that he was not a " person aggrieved " within the meaning of Section 22 or Section 46 of the Provincial Insol-vency Act of 1907 and could not therefore maintain either the application or the appeal. It was observed that he could not be aggrieved in the legal sense of the word by the sale of property in which he had no interest. The leading English cases of Ex parte Sheffield4, and In re Leadbitter5, were referred to, and it was pointed out that the possibility of a surplus being left for the insolvent after distribution, does not clothe him with any legal interest and that he has merely a hope or expectation. It may incidentally be noted that Secs.68 and 75 of the Provincial Insolvency Act of 1920, corresponding to Secs.22 and 46 of the Provincial Insolvency Act of 1907, have expressly named the insolvent among the persons who have the right to make an application under the former section and the right to file an appeal under the latter.

(3.) Hari Rao V/s. Official Assignee, Madras , arose under Section 8(2) of the Presidency Towns Insolvency Act (III of 1909). The facts in that case were similar to those in Sakhawat Ali V/s. Radha Mohan (1918) I.L.R. 41 All. 243. Following Ex parte Sheffield (1879) 10 Ch.D. 434, In re Leadbitter (1878) 10 Ch.D. 388, and Sakhawat Ali V/s. Radha Mohan (1918) I.L.R. 41 All. 243, it was held that, an insolvent whose estate has vested in the Official Assignee is not entitled to appeal as an aggrieved person within Section 8(2) of the Presidency Towns Insolvency Act against an order of a Judge rejecting his opposition to a sale of his estate by the Official Assignee. It was. stated that the insolvent has no legal right to interfere with and embarrass the administration of the estate. It is of some significance that the Full Bench refrained from deciding whether an insolvent could maintain an appeal against an order admitting proof of a creditor to which he had objected.