MARIAPPA PILLAI Vs. LRRAMAN CHETTIAR

JUDGEMENT

(1.) The plaintiff is the wife of the 2nd defendant. She purchased the suit property from him on 5th August 1912, the consideration for the sale being the debt to her which he had incurred for meeting the expenses of a certain litigation between himself and his father, for which he had pledged his wife s jewels. The 1st defendant was a creditor of the 2nd defendant and brought Original Suit No. 324 of 1913 in the Court of the District Munsif of Tinnevelly against him and got the suit property attached before judgment. The plaintiff put in a claim petition but it was dismissed on 2nd December 1913. On a debtor s petition presented in the District Court on 15th September 1913 the 2nd defendant was on 12th December 1913 declared insolvent. The Official Receiver sold the suit property by auction on 31st July 1914 and the 3rd defendant purchased it.

(2.) The plaintiff brought this suit to establish her title and has been successful in the lower Courts in obtaining a declaration of her title, both the Additional District Munsif and the District Judge finding that the sale by plaintiff s husband in her favour was a genuine one for good consideration. They also held that the sale by the Official Receiver was a nullity for want of a vesting order, citing the opinion of Moore, J., in Official Receiver of Trichinopoly v. Somasundaram Chettiar 34 Ind. Cas. 602 : 30 M.L.J. 415. The proceedings in which the 2nd defendant was adjudicated insolvent are not in the records of this second appeal. Assuming that those proceedings were regular and that under Section 16(2)(a) of the Provincial Insolvency Act, the insolvent s property by the order of adjudication ipso facto became vested in the Official Receiver, there are other obstacles in the way of the 3rd defendant, who purchased the property from the Official Receiver and is the appellant in this second appeal. The defect in his title consists in the admitted fact that the transfer of the suit property by the insolvent to the plaintiff has not been annulled by the Court of Insolvency either under Section 36 or Section 37 of the Provincial Insolvency Act. "The Court" in Sections 36 and 37 signifies the Court exercising jurisdiction under that Act [see the definition in Section 2(g) of the Provincial insolvency Act],which in the present case was the District Court. I am of opinion that no Court has the jurisdiction to annul, as such, a transfer amounting to a fraudulent preference or a voluntary transfer made within two years of the adjudication, except a Court exercising insolvency jurisdiction in proceedings which have been instituted to declare the debtor, who made the transfer, insolvent by a petition duly presented under the Act. In Gandla Veerama v. Ramaswamiah Garu Second Appeal No. 360 of 1916 it was held by Phillips and Krishnan, JJ., that a Receiver appointed by a Court of Insolvency could bring a regular suit in another Court to set aside a transaction under Section 36 of the Provincial Insolvency Act, but with due respect, I feel doubt whether that decision was right. I do not think that a special statutory provision whereby District Courts and certain other Courts are invested by notification of the Local Government under Section 3(1) with the power, among other powers, of invalidating certain defined transactions of insolvents should be extended to all Courts of original jurisdiction whether notified under this Act or not. Otherwise conflicts might arise between the decision of a Court sitting in insolvency and the judgment of another Court exercising ordinary original jurisdiction. Transfers of this kind, if they do not fall under Section 53 of the Transfer of Property Act, would, in the absence of any provision to the contrary, be valid transfers.

(3.) I further agree with the view taken in Hemraj Champa Lall v. Ramkishen Ram 38 Ind. Cas. 369 : 2 P.L.J. 101 : 1 P.L.W. 752 : (1917) Pat. 303 and in Kauleshar Ram v. Bhawan Prasad 42 Ind. Cas 845 that it is the Official Receiver who must set the Court in motion to annul a transfer under Section 36 or Section 37. These sections speak of such transfers as being "void against the Receiver", not void against all the world.