Konjeti Seshayya and Another vs V. Rangiah, Official Receiver and Others

Abdur Rahman, J.—The only contention which has been raised in this appeal is that an order of refund of the sale proceeds of the

insolvents'' property should not have been passed in favour of the Official Receiver, Nellore, on an application made by him and that he should

have been directed to file a suit against the appellants for this purpose. The facts have been stated by me in the connected appeal No. 465 of 1936

and need not be repeated here. It is quite sufficient to state that the application was made by the Official Receiver to the Insolvency Court under

Sections 4, 5, 51 and 52 of the Provincial Insolvency Act. A reference to Section 52 in the petition was, in the circumstances of the case,

unnecessary as the insolvents'' property was sold in execution of a decree after the petition for their adjudication had been admitted. A reference to

Section 4 of the Act would show that an Insolvency Court has full power to decide all questions whether of title or priority, or of any nature

whatsoever, which the Court may deem expedient or necessary to decide for the purpose of doing complete justice or making a complete

distribution of property. The Insolvency Court had thus full power to decide the application made by the Official Receiver and to order a refund if

it came to a decision that the realisation of the sale proceeds by the appellants was unjustified. This is exactly what has been done. Reliance was

placed in this connection by the Counsel for the appellant on Din Muhammad v. Tara Chand AIR 1930 Lah. 39 where a learned Judge of the High

Court of Lahore had held that the Insolvency Court was not authorised to direct a refund and the Official Receiver was in that case directed to

institute a suit for the recovery of money. This case was, however, overruled by a Division Bench of the same Court in Official Receiver, Jullundur

v. Labhu Ram I.L.R.(1933) 14 Lah. 724. The contention raised on behalf of the appellant has thus no force and the appeal is dismissed with costs.