B VEERANNA SHA Vs. OFFICIAL RECEIVER OF SECUNDERABAD

JUDGEMENT

(1.) This appeal raises a question of private international law. In C.S. No. 420 of 1922 of the Original Side of this Court three members of a joint Hindu family sued for partition of the family estate. One of the plaintiffs died and the other two were adjudicated insolvents by an order of the District Judge of Secunderabad, dated the 15 October, 1C)28, on an application filed on the 27 August, 1928. Secunderabad is not part of British India and the adjudication was therefore in law an adjudication by a foreign Court. On the 5 December, 1922, a preliminary decree was passed in the partition suit. On the 15 June, 1926, a Bombay creditor of the plaintiffs obtained a decree against them in the Bombay High Court and the decree was transferred to this Court for execution. In the execution proceedings which followed the Bombay creditor on the 20 December, 1926, attached the preliminary decree which the plaintiffs had obtained in the partition suit. Other creditors of the plaintiffs obtained decrees against them and nine of them also attached the preliminary decree before the order of adjudication was passed. Three of the creditors obtained orders of attachment after the adjudication. Two of the creditors who attached after adjudication are the appellants in the present appeal.

(2.) On the 18 April, 1937, the partition suit was compromised and in pursuance o? the compromise the amount of Rs. 1,31,231-9-0 in cash and Government securities was paid into Court. The Official Receiver of Secunderabad settled with seven of the creditors who had attached before the adjudication for the sum of Rs. 66,926-1-0. We are told that two of the creditors who attached before judgment allowed their claims to become barred by the law of limitation and one proved in the insolvency. After settling with the seven creditors there remained a balance of Rs. 64,305-8-0. The Official Receiver asked that this amount should be paid out to him. The application was opposed by the appellants, but was granted. Under the compromise decree in the partition suit a sum representing 50,000 sicca rupees had to be paid into Court in addition to the Rs. 1,31,231-9-0. It was paid in and after reserving sufficient to meet the claim of the appellants which amounted to some Rs. 21,000, and the claim of the other creditor who had also attached after the order of adjudication all the moneys were withdrawn by the Official Receiver. The appeal concerns the right claimed by the appellants to withdraw the Rs. 21,000.

(3.) The appellants case is that they are entitled in law to rateable distribution with the creditors who attached before adjudication and as there is sufficient money to pay all the creditors they are entitled to be paid the full amount of their claim out of the moneys in Court. In the course of the arguments the appellants Counsel put forward an alternative claim, which was not advanced before Gentle, J., who heard the application. The aggregate amount claimed by the seven creditors with whom the Official Receiver settled was Rs. 98,000. It is said that even if the appellants are not entitled to withdraw the whole of the Rs. 21,000 they are entitled to receive out of the moneys in Court a sum representing the amount they would have received if the Rs. 98,000 had been rateably distributed between them and the seven creditors. In rejecting the claim made by the appellants before Gentle, J., the learned Judge I relied on the judgments in Ananthapadmanabhaswami V/s. Official Receiver, Secunderabad (1933) 64 M.L.J. 562 : L.R. 60 I.A. 167 : I.L.R. 56 Mad. 405 (P.C.) and Galbraith V/s. Grimshaw (1910) A.C. 508.