FIRM OF SETH ARJUNDAS VASUDEV BY PARTNER CHHUGOMAL Vs. S R NARAYANA PILLAI AND OTHERS
HIGH COURT OF MADRAS
Firm Of Seth Arjundas Vasudev By Partner Chhugomal
S R Narayana Pillai And Others
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(1.) This is an appeal preferred against the order made by the learned Subordinate Judge of Salem in R. E. A. No. 819 of 1952 in R. E. P. No. 175 of 1949 in O. S. No. 35 of 1949.
(2.) The established facts are:- The appellant firm is an assignee of the decree obtained by respondent 5 against respondents 1 to 3 in O. S. No. 35 of 1949. E. P. No. 175 of 1949 was filed by respondent 5 and in these execution proceedings certain properties belonging to respondents 1 to 3 were brought to sale and the sale was fixed for 17-8-1950. Before the sale could take place another firm of creditors of respondents 1 to 3 filed I. P. No. 32 of 1950, on 12-8-1950 seeking the adjudication of respondents 1 to 3 as insolvents.
On the same date an application for appointment of an interim receiver to take possession of the properties of respondents 1 to 3 was made. That application was ordered and the Official Receiver, Salem, was appointed interim Receiver. Another application was made for stopping the sale fixed to take place-on 17-8-1950. The insolvency Court, however, refused this request and allowed the sale to proceed and directed that the sale proceeds should be handed, over to the Official Receiver for distribution among all the creditors.
The sale was held on 17-8-1950 and was concluded on 18-8-1950. One-fourth of the entire sale-amount was deposited into Court on 18-8-1950 and the balance was realised on 29-8-1950. A sum of Rs. 5,338-4-0 representing the sale proceeds was remitted to the Official Receiver, Salem, in pursuance of the order of the Insolvency Court in I. A. No. 508 of 1950 in I. P. 32 of 1950. In the meanwhile, another creditor of respondents 1 to 3 filed I. P. No. 44 of 1950, on 16-11-1950 for adjudging respondents 1 to 3 as insolvents.
Both the petitions were consolidated and these proceedings were pending till 25-6-1951 on which date respondents 1 to 3 were adjudged insolvents in I. P. No. 44 of 1950 and I. P. No. 32 of 1950 was dismissed as unnecessary. The acts of insolvency alleged in the two insolvency petitions were different because the act of insolvency alleged in the later application was the execution sale held at the instance of respondent 5 while private alienations of properties by the insolvent were the acts of insolvency relied on in I. P. No. 32 of 1950.
(3.) The case for the petitioner-appellant was that he was entitled to exclude the other creditors of respondents 1 to 3 from participation in the sale proceeds and this was based upon the contention that I. P. Nos. 32 and 44 of 1950 were not consolidated and were distinct I. Ps. and had different disposals and that having regard to the provisions of clause (2) of Section 28, Provincial Insolvency Act, the benefit of an order appointing an interim receiver in I. P. No. 32 of 1950 could not extend to the proceedings
in I. P. No. 44 of 1950 and that unless another order of appointment of a receiver in I. P. No. 44 of 1950 bad been made, and which had not been made, the properties oh the insolvents did not vest in the Official Receiver who was appointed interim receiver in the first petition thereby resulting in the sale proceeds being ear-marked for satisfying the decree debt of the appellant.;
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