The Official Receiver, Kistna vs Gogineni Kodandaramayya and Another

Pandrang Row, J.—These arise out of the order in appeal of the Additional Subordinate Judge of Bezwada, dated 12th April, 1933. There

were two appeals to the Subordinate Judge from one and the same order passed by the District Munsiff of Bezwada in two applications made to

him u/s 52 of the Provincial Insolvency Act. Two different decree-holders had attached certain properties in execution of decrees obtained by

them against two persons, father and son. Before the properties were actually brought to sale, the father filed an insolvency petition, and in that

petition the Official Receiver, Kistna was appointed receiver of his properties. Thereupon the Official Receiver presented two applications u/s 52

of the Provincial Insolvency Act praying that the sale of the properties may be stopped. The District Munsiff after enquiry held that the properties

brought to sale were the self-acquisitions of the father Bapayya and accordingly stopped the sales and directed the delivery of the entire properties

to the Official Receiver. From this order the decree-holders appealed to the Subordinate Judge, and the Subordinate Judge held that it was not

competent to the executing Court to whom an application is made u/s 52 of the Provincial Insolvency Act to investigate and decide the questions of

title arising between the insolvent and others, and accordingly he modified the order of the District Munsiff to the extent of allowing the Official

Receiver to take possession only of the interest of the insolvent, whatever it might be, in the properties, and allowing the decree-holders to proceed

with the execution of their decrees so far as the second judgment-debtor''s i.e., the son''s interest in the attached properties, whatever it might be,

was concerned. Preliminary objection was raised before the Subordinate Judge to his competency to hear the appeals on the ground that the

appeals must be deemed to have been presented u/s 75 of the Provincial Insolvency Act, and that the Appellate Court under that section was the

District Judge and not the Subordinate Judge. This objection was overruled by the Subordinate Judge, and it has not been pressed before me. It is

therefore unnecessary for me to consider whether there is any substance in this objection.

The only point therefore that remains to be decided is whether the executing Court is competent to investigate questions of title as between the

insolvent and his son, the other judgment-debtor, in an application u/s 52 of the Provincial Insolvency Act. It has been stated on both sides that this

point is not covered by any authority. Section 52 under which the applications were made belongs to a portion of the Act which is headed ""Effect

of insolvency on antecedent transactions"", the first section dealing with this part of the law being Section 51 which restricts the rights of creditors

under execution. The second is Section 52 followed by Sections 53 and 54 which relate to avoidance of transfers as against the creditors. The

general policy of the Insolvency Act is that when a person is adjudicated an Insolvent his estate should be collected together by the receiver

appointed for the purpose, and various provisions have been enacted in order to enable the Official Receiver to perform this duty of getting the

estate together into his hands by comparatively easy methods, and one of such methods is the method provided for in Section 52 of the Act which

applies to property which has been proceeded against in execution and is liable to sale in execution. In such a case the Court which is executing the

decree is bound on application, to direct the property which has been proceeded against in execution to be delivered to the Official Receiver. It

would therefore appear that once it is established that there is some property against which execution has issued and which is saleable in execution,

and it is found that the property so proceeded against is the property of a person who has been adjudicated insolvent the Court has nothing more

to do than to deliver such property to the receiver. The section does not contemplate any enquiry at all as regards the extent of the rights of the

insolvent in the property proceeded against in execution. Whatever has been proceeded against as the property of the person who was

subsequently adjudicated insolvent has to be delivered to the receiver. The learned Subordinate Judge has given various reasons why in his opinion

it would be more convenient that disputes of title as between the insolvent and his co-judgment-debtor should be decided by the Insolvency Court

and not by the executing Court. Apart from these considerations, which I am bound to say are entitled to considerable weight, I am of opinion that

the policy of Section 51 is really to put an end as it were to the powers of the executing Court to proceed against or do anything in respect of

property against which it has issued execution as soon as it is found that the judgment-debtor as whose property it was proceeded against has

been adjudicated an insolvent and an application is made by the receiver u/s 52 of the Act. The subsequent fate of that property is left to the

Insolvency Court to decide if it thinks fit, or to a separate suit. It is obvious that the executing Court as well as the Insolvency Court cannot very

well deal simultaneously with the same dispute. I am of opinion therefore that the view taken by the learned Subordinate Judge is right, and that in

an application u/s 52 of the Provincial Insolvency Act where the conditions prescribed therein have been fulfilled the executing Court has no other

duty to perform than to direct the delivery of the property in question to the receiver, and is no longer competent to investigate or decide questions

of title in dispute between the insolvent judgment-debtor and any other co-judgment-debtor or stranger. The appeals therefore fail and are

dismissed with costs. No separate orders are necessary in the Civil Revision Petition which are dismissed.