Decided on January 30,1963

Gunupudi Subba Rao And Co., Reptd. Appellant


KUMARAYYA,J. - (1.) The only question that arises in this appeal against the order passed by the Subordinate Judge, Kavali in execution proceedings is, whether the present execution petition filed on 1-12-1958 is within time. It would appear from the facts of the case that the appellant had brought O. S. No. 367/1950 and obtained a decree against the respondent and several other defendants. The decree was passed on 31-8-1951 and it became final as no appeal has been preferred. On 2-5-1952 the decree-holder put his decree into execution but that petition was dismissed on 18-6-1952 as the batta was not paid. This was followed by another E. P. on 25-6-1952 which again was dismissed on 29-8-1952 as no property liable to be attached could be found. A third application was filed on 18-11-1952 and this is marked as Ex. A. 6. By this time, nay on 29-8-1952 itself, the 1st defendant on the petition of this very creditor decree-holder had been adjudged insolvent. So then according to law, the decree-holder had to take permission of the insolvency court for taking execution proceedings against the insolvent. He did not comply with this provision. He filed his E. P. on 18-11-1954 without such leave of the insolvency court. Of course the petition was against all the judgment-debtors including the insolvent. This petition was however, dismissed on 20-4-1955 on the ground that no batta was paid. The next petition was filed on 18-11-1957 again without the leave of the insolvency court and it met the same fate on 9-12-1957 on the same ground that batta was not paid. Sometime thereafter on 11-8-1958 the adjudication of insolvency was annulled unconditionally. Thereafter the present E. P. was brought on 1-12-1958. This time statute of limitation was set up against the tenability of E. P. The executing court repelled this contention raised by the J. D. but on appeal the learned Subordinate Judge having regard to the provisions of Section 78(2) held that the E. P. is barred by limitation. Against this order, the decree-holder has come in appeal to this Court.
(2.) It was argued that when once adjudication is annulled without imposing any condition and without vesting the property in any oilier person, the effect of annulling the adjudication would be that the insolvent is automatically reverted to his original position. The Execution petition, therefore, filed without the leave of the Court would be taken as valid applications and they would constitute a step in aid of the execution.
(3.) The next ground taken is that the decree being against several judgment-debtors, the execution petition which is valid against one judgment-debtor would save limitation against others. It is further contended, though pressed at all, that under Section 78(2), the Decree holder is entitled to exclude the time between the adjudication and annulment. In support of these contentions raised the learned counsel Mr. Kuppuswamy has referred me to a decision of this Court in Rangappa v. Roddi Govinda Reddy, (1962) 2 Andh WR 266 : A.I.R. 1963 Andhra Pradesh 228. That case is on all fours with the facts of the present case. It was held thus therein after referring to the relevant provision of the Provincial Insolvency Act and the authorities of the Full Bench of the Madras High Court, "the law is well settled that when an adjudication was annulled without imposing any conditions and without vesting the property in any person, it must be taken that the effect of annulling the adjudication is to wipe out the effect of insolvency altogether and the insolvent automatically reverts to his original position with all his powers and rights in respect of the property as though the adjudication was but a dream and a hollow unreality. If that is the effect of unconditional annulment, as it is under the express provisions of law, the reverter must benefit both the debtor and the creditor. All disabilities and limitations directly flowing from the adjudication shall automatically get remedied or obliterated. Whatever the vitiating short coming on account of the E. P. being filed without the leave of the Court, it will, with the order of annulment, get automatically neutralised. The insolvent having reverted to his original status by the operation of law, it can no longer be argued that the E. P. filed against him was a proper application in accordance with law by reason of insolvency. The retrospective effect being given to his status, the consequences will necessarily reach back to the date of the reverter.";

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