IN RE: B. SHARMA Vs. STATE

JUDGEMENT

(1.) M .G. Automobiles, the respondent in this application, obtained a decree against one Sharma in O.S. No. 14 of 1962 on the file of the Civil Court Bellary, for a sum of Rs. 17,000 and odd, and filed E.P. No. 1731of 1963 in the City Civil Court, Madras to execute the decree. The execution petition was filed in l963 itself and sought to attach a sum of one lakh of rupees due to Sharma from Hind Mercantile Corporation. Private Limited under a compromise of October, 1963. An interim prohibitory order was issued on 6th November 1963 Prohibiting Hind Mercantile Corporation Private Limited from paying the amount to Sharma. The order was served on the garnishee, Hind Mercantile Corporation, on 8th November, 1963. The garnishee appeared and pleaded that the amount had been paid to Sharma even on 1st November, 1963. The matter was pending enquiry in the Execution Petition in the City civil Court.

(2.) AT that stage, on 4th July, 1966, Sharma presented I.P. No. 31 of 1966 in this Court for being adjudicated insolvent. The petition was admitted on 5th July, 1966, and he was adjudged insolvent on the same day under Section 9(f) of the Act (The Presidency Towns Insolvency Act (III of 1909).

(3.) THE point of the Official Assignee is that, no assets had been realised by M.G Automobiles in E.P. No. 1731 of 1963 before the date of the admission of the insolvency petition (5th July, 1966), and that consequently, the exception in Section 53(1) cannot be invoked by M.G. Automobiles; and, by virtue of Section 17 of the Act, the debt alleged to be due to the insolvent from the Hind Mercantile Corporation Private Limited has vested in the Official Assignee.