MARIAPPA GOUNDER Vs. SUBBIAH PILLAI AND ORS.

JUDGEMENT

(1.) THIS Civil Miscellaneous Second Appeal arises under the following circumstances. One Lakshmiammal, who is the third respondent herein, was adjudicated an insolvent in I.P. No. 57 of 1962 on the file of the Sub -Court of Coimbatore on and August, 1963 on her own application. The entire estate of the insolvent was directed to vest in the Official Receiver. On the 11th of April, 1967, the Official Receiver, Coimbatore, sold certain properties of the insolvent in favour of one Mariappa Gounder, the appellant herein, who had offered the highest bid of Rs. 2,505 at a public auction held by the Official Receiver on the 5th February, 1967. A sale certificate was issued to the appellant by the Official Receiver and it shows that all the right, title and interest of the insolvent passed thereunder to the appellant. The sale certificate also shows that what was sold was 4.06 acres out of 7.96 acres of punja lands comprised in new survey number 24/1 (old Survey No. 24) at Mannoor village in Pollachi Taluk. After the issue of the sale certificate, the auction -purchaser, namely, the appellant, filed a petition under sections 4 and 5 of the Provincial Insolvency Act in I. A. No. 158 of 1969 in I.P. No. 57 of 1962, applying to the insolvency Court for a direction to the insolvent to deliver possession of the property purchased by him. Be it noted that in this application for delivery of possession, Subbayya Pillai, who is the first respondent herein and who claims to have been in possession of the property as a tenant of the insolvent under a registered lease deed dated 12th March, 1962 was not impleaded as a party. The Insolvency Court, after ordering notice to the insolvent and the Official Receiver and on their raising no objection, directed delivery of possession of the property in favour of Mariappa Goundar. Subbayya Pillai, who claims to have been in possession as tenant appears to have obstructed delivery of possession by the bailiff of the Court. In fact it is found from an endorsement on I. A. No. 158 of 1969 that though delivery was ordered for 14th August, 1969 it could not be effected for want of police aid and because the premises were locked. A petition for breaking open the lock and for police aid was filed. It does not appear whether this petition was allowed, but I find that on 14th August, 1969 the Court ordered delivery by 16th September, 1969. On 16th September, 1969 the Court passed the following order : "Possession delivered as per amin's report dated 1st September, 1969, delivery recorded. Petition closed." On the 28th of September, 1969, Subbayya Pillai, filed I. A. No. 1 of 1970 in LA. No. 158 of 1969, in which he prayed for re -delivery of possession of the property mentioned in the petition. The allegations made in the affidavit were to the effect that under the registered lease deed dated 12th March, 1962 the insolvent Lakshmiammal and her son Nataraja Pillai had leased in favour of Subbayya Pillai a specific extent of 2.61 acres of land in S. F. No. 24/1 (old Survey No. 24) out of a total extent of 7.83 acres in Mannoor village, that he had been a cultivating tenant of the same paying an annual rent of Rs. 200, that after Lakshmiammal was adjudged an insolvent, Subbayya Pillai continued in possession as a statutory tenant and paid the Official Receiver rents in that capacity, that when Mariappa Goundar as purchaser of the property from the Official Receiver tried to take delivery of possession of 2.61 acres, of which Subbayya Pillai was in possession, he obstructed delivery on 31st August, 1969, that the amin and Mariappa Goundar colluded together and declined to receive the obstruction statement filed by Subbayya Pillai and the amin effected delivery of possession of the leasehold property of Mariappa Goundar despite the protests of the tenant and that Subbayya Pillai who is entitled to the benefits of the Madras Cultivating Tenants Protection Act, was not liable to be dispossessed by the purchaser from the Official Receiver and consequently the Court should direct re -delivery of possession to Subbayya Pillai. The Insolvency Court, without understanding the legal situation relied upon a single Judge ruling of this Court reported in Saraswathi v. Krishna Aiyer : AIR 1964 Mad 501 , and held that Subbayya Pillai had no locus standi to file a petition under section 4 of the Provincial Insolvency Act and that in any event he did not claim a right of possession on his own account or an account of some person other than the insolvent and consequently the petition was not maintainable. The Insolvency Court further observed that the procedure to be adopted under Order 21, Rules 100 and 101, Code of Civil Procedure, by a cultivating tenant to get back possession of the property in case he is dislodged from the land is indicated in sub -section (5) of section 4 of the Madras Cultivating Tenants Protection Act and that if he had any grievance, he ought to apply to the Revenue Divisional Officer for the restoration to him of the possession of the land. In this view the Insolvency Court dismissed the petition but without costs. Against this order, the tenant preferred an appeal in C.M. A. No 36 of 1971 on the file of the District Court of Coimbatore (West). The learned District Judge, relying upon a ruling reported in Senthilvel Gaunder v. Venkitachalam Chettiar (1970) 83 L.W. 711, held that the petition was maintainable and without directing any enquiry as to whether Subbayya Pillai was in possession as cultivating tenant ,the learned District Judge directed re -delivery of the property in favour of Subbayya Pillai and allowed the appeal with costs. It is against this Judgment that the auction -purchaser has preferred this Civil Miscellaneous Second Appeal.

(2.) THE first question that arises for consideration is whether the petition for re -delivery filed by Subbayya Pillai is maintainable. Be it noted that Mariappa Goundar, who purchased the disputed property from the Official Receiver applied to the Insolvency Court under sections 4 and 5 on the Provincial Insolvency Act for delivery of possession of the property. The Insolvency Court directed the bailiff of the Court to effect delivery. The grievance of Subbayya Pillai is that though he obstructed delivery on the ground that he was a statutory tenant entitled to the benefits of the Madras Cultivating Tenants Protection Act, his obstruction was ignored by the bailiff of Court and a record was made to the effect that delivery of possession was effected in favour of the purchaser from the Official Receiver. It was on this basis that Subbayya Pillai wanted the Insolvency Court to direct re -delivery of possession in his favour. The Insolvency Court rejected his request on several grounds. The first was that the petition itself was not maintainable. I am entirely unable to agree with the insolvency Court. Section 4, Sub -section (i) of the Provincial Insolvency Act provides that subject to the provisions of this Act, the Court shall have full power to decide all questions whether of title or priority, or of any nature whatsoever, and whether involving matters of law or of fact, which may arise in any case of insolvency coming within the cognizance of the Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case. No doubt, under Sub -section (3) of Section 4, where the Court does not deem it expedient or necessary to decide any question of the nature referred to in Sub -section (i) but has reason to believe that the debtor has a saleable interest in any property, the Court may without further inquiry sell such interest in such manner and subject to such conditions as it may think fit. But in this case, acting in exercise of its power under Section 4(i), the Insolvency Court directed delivery of possession in favour of the purchaser from the Official Receiver, Subbayya Pillai, the obstructor, claimed certain statutory rights of tenancy as against the insolvent himself. According to him, neither the insolvent nor the auction -purchaser from the Official Receiver had any right under the law to evict him because he had acquired certain rights as a tenant under the Madras Cultivating Tenants Protection Act and the dispossession effected by the bailiff of the Insolvency Court despite his obstruction was violative of the relevant provisions of the Madras Cultivating Tenants Protection Act. In fact, Section 3 of the Cultivating Tenants Protection Act prescribes that subject to the next succeeding sub -sections, no cultivating tenant shall be evicted from his holding or any part thereof by or at the instance of the land -lord whether in execution of a decree or order of a Court or otherwise. Section 3 Clause (4)(a) of the Act says that every landlord seeking to evict a cultivating tenant falling under Sub -section (a) shall, whether or not there is an order or decree of a Court for the eviction of such cultivating tenant, make an application to the Revenue Divisional Officer and such application shall bear the Court -fee stamp of one rupee and that it is the Revenue Divisional Officer, who can after following the procedure prescribed in Section 3, Clause (4) Sub -clause (b) pass an order for eviction. If Subbayya Pillai, is a cultivating tenant within the meaning of Madras Act XXV of 1955, as he claimed to be, the Insolvency Court would have no jurisdiction whatsoever to evict him. All that could have been done was to effect delivery of symbolic possession of the property in favour of the purchaser from the Official Receiver leaving the purchaser, Mariappa Goundar to pursue his remedies against the cultivating tenant under Madras Act XXV of 1955. The Insolvency Court without even enquiring as to whether the lease deed relied upon by Subbayya Pillai was true and whether he had been in possession of the property in pursuance thereof as a cultivating tenant within the meaning of Section 2 of Madras Act XXV of 1955, illegally dismissed the petition on the ground it was incompetent. If under Section 4 of the Provincial Insolvency, Act, the Insolvency Court could direct delivery, it goes without saying it could rectify its own order in the interests of justice and direct re -delivery if it was established to its satisfaction that the delivery originally ordered was in violation of the provisions of the Madras Cultivating Tenants Protection Act. It is, however, contended on behalf of the appellant -auction -purchaser that no person other than the Official Receiver can move the Court under section 4 of the Provincial Insolvency Act and that the application filed by Subbayya Pillai, was therefore unsustainable.

(3.) IN support of this proposition reliance is placed by learned Counsel for the appellant upon the observations of Ramamurti, J., in a case reported in Saraswati v. Krishna Aiyer : AIR 1964 Mad 501. There the learned Judge has observed as follows: From the foregoing it will be clear that, both on principle and authority, the Official Receiver is the only person who can invoke the jurisdiction of the Court under section 4 of the Provincial Insolvency Act, barring proceedings provided for under Section 54A. With great respect to the learned Judge, I think that he has laid down the proposition far too broadly. There is nothing in section 4 of the Provincial Insolvency Act itself which justifies the proposition that only the Official Receiver can file an application invoking the powers of the Court under Section 4. The provision embodied in Section 4 was not found in the Act of 1907. It was incorporated for the first time in the Provincial Insolvency Act of 1920. The Courts were empowered by the Act of 1907 to decide, and they did decide questions of title and priority that came within their cognizance, that is under the specific provisions of the Act, but that Act did not empower them to decide questions of title and priority that arose incidentally, that is, questions not covered by the specific provisions of the Act. Regarding the jurisdiction of the Courts to decide the latter class of questions, there was a cleavage of opinion between the Allahabad and the Calcutta High Courts. It was to set at rest the conflict between the two High Courts that section 4 of the present Act was incorporated and that section invests the Court with jurisdiction to decide all questions of title or priority whether they come under the express provisions of the Act or they arise incidentally without there being any express provision in the Act. The claims that usually arise before the Insolvency Court are of two descriptions : (i) Claims which arise out of the insolvency and (2) Claims not arising out of the insolvency. A claim arises out of the insolvency when it arises solely on account of the insolvency proceedings and would not have arisen but for such proceedings. A claim to avoid fraudulent preference, for instance, is a claim which arises out of the insolvency. Such questions have necessarily to be decided by the Insolvency Court. But there may be questions which relate to claims arising not out of the insolvency. Such questions are open to the jurisdiction of the ordinary civil Court as well as the jurisdiction of the Insolvency Court. These questions may be tried either by the Insolvency Court or by the ordinary civil Court. Under Section 4 of the Insolvency Act, the Insolvency Court is given a discretion either to try such questions itself or to refer such questions for adjudication by civil Courts. The question whether Subbayya Pillai had acquired any statutory rights of tenancy as against the insolvent even before his adjudication is a question which did not arise in insolvency because it is a claim which, according to Subbayya Pillai, inhered in him even before Lakshmiammal had been adjudicated as an insolvent. The question whether the insolvent or the Official Receiver or the purchaser from the Official Receiver could evict Subbayya Pillai in the teeth of the rights which he claimed to have acquired under the Madras Cultivating Tenants Protection Act was a question which arose incidentally. It was open to the Insolvency Court under Section 4 either to adjudicate upon this dispute itself or to refer it to the ordinary civil Court. At the instance of the purchaser from the Official Receiver it decided to exercise its jurisdiction under section 4 and to direct delivery of possession in favour of the purchaser from the Official Receiver. Having passed the order in exercise of its powers under section 4, it could not refuse to consider the application made by a person who said that the delivery had been effected in violation of the provisions of the Madras Cultivating Tenants Protection Act and in such a manner as to prejudice his valuable rights. In the former class of cases, that is to say, in disputes arising in insolvency, the Official Receiver as a representative of the general body of creditors and of the insolvent is charged with the statutory duty of moving the insolvency Court for the grant of the required relief. It is not therefore desirable in such cases that behind the back of the Official Receiver, the general body of creditors or any member thereof should normally be permitted to move the Court under Section 4 of the Insolvency Act. But, it has been held by three Division Benches of this Court that even in such cases it will be open to a creditor to invoke the jurisdiction of the Court under section 4 after obtaining the leave of the Insolvency Court (vide Vasudeva v. Annapurnaamma : AIR 1935 Mad 809, Narayanamma v. Venkata Somayajulu (1924) 67 M.L.J. 616 : (1924) 40 L.W. 693: A.I.R. 1935 Mad. 46 and Anantha Narayana Iyer v. Sankaranarayana Ayyar I.L.R. (1924) Mad. 673: 18 L.W. 857; A.I.R. 1924 Mad. 345. But so far as claims not arising out of the insolvency jurisdiction are concerned, the Official Receiver cannot function as a representative of third parties to the insolvency proceeding. After having sold the property at an auction in favour of Mariappa Grounder ,it would indeed be absurd to expect the Official Receiver to represent Subbayya Pillai, the obstructor and file an application for re -delivery on his behalf under Section 4 of the Provincial Insolvency Act. I have little doubt that in the latter category of cases, the Official Receiver goes out of the picture altogether and it is for the aggrieved person to move the Court by means of an application in his own name for such relief as the Court may grant under Section 4 of the Provincial Insolvency Act. The observations of Ramamurti, J., must therefore be confined to the facts of that case, where an individual creditor initiated proceedings behind the back of the Official Receiver for a declaration that certain properties formed part of the estate of the insolvent and that the Official Receiver should be directed to take possession of the same. It was in that context that the learned Judge said that the Court's aid should be invoked under section 4 only by the Official Receiver and not by any individual creditor behind his back. I, therefore, reject the contention of the appellant's learned Counsel that the petition of Subbayya Pillai is not competent. The first appellate Court was right in holding that the petition of Subbayya Pillai was maintainable. But, then, it erred in directing re -delivery straightaway without going into the question as to whether the allegations made by Subbayya Pillai were true and without finding out whether he was really a cultivating tenant entitled to the benefits of Madras Cultivating Tenants Protection Act. I, therefore, while confirming the finding of the first appellate Court that the petition for re -delivery is maintainable, remand the matter to the Court of first instance with a direction to allow the parties to lead evidence as to whether Subbayya Pillai was, on the date delivery was effected in favour of Mariappa Gounder, a cultivating tenant within the meaning of the Madras Cultivating Tenants Protection Act and is entitled to the benefits of that Act. It is needless to add that if on the relevant date, he was a cultivating tenant re -delivery should be ordered in his favour. If he was not, his application for re -delivery will stand dismissed. The costs incurred in all the three Courts will abide the result. No leave.