G. N. Ray, J. - (1.) Leave granted.
(2.) Heard learned counsel for the parties. This appeal is directed against judgment dated 29-6-1995 passed by the Division Bench of the Madras High Court in O.G.A. Nos. 134 to 136 or 1988. By the impugned judgment, the appellants claim for being treated as secured creditor under the proviso to Section 17 of the Presidency Town Insolvency Act (hereinafter referred to as the Act) read with Section 52(2)(a) of the Act has been disallowed. The appellants claimed that the goods which were hypothecated to the appellant bank by the insolvents could be sold by the bank for recovery of its dues as secured creditor without approaching the Official Assignee like an ordinary creditor.
(3.) The main contention of the appellant is that the goods hypothecated to the appellant belonged to the insolvents who had created a charge over the said goods in favour of the appellant. In such circumstances Section 17 read with Section 52(2)(a) of the Act, and not Section 52 (2)(c) of the Act, is applicable. It will be appropriate to refer to Section 52 of the Act for appreciating rival contentions of the parties: "52. Description of Insolvents Property Divisible Amongst Creditors. (1) The property of the insolvent divisible amongst his creditors, and in this Act referred to as the property of the insolvent, shall not comprise the following particulars, namely (a) property held by the insolvent on trust for any other person: (b) the tools (if any) of his trade and the necessary wearing apparel, bedding, cooking vessels, and furniture, of himself, his wife, and children to a value, inclusive of tools and apparel and other necessaries as aforesaid, not exceeding three hundred rupees in the whole. (2) Subject as aforesaid the property of the insolvent shall comprise the following particulars, namely:- (a) all such property as may belong to, or be vested in, the insolvent at the commencement of the insolvency, or may be acquired by, or devolve on, him before his discharge: (b) the capacity to exercise, and to take proceedings for exercising, all such powers in or over, or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge; and (c) all goods, being at the commencement of the insolvency, in the possession, order, or disposition of the insolvent, in his trade or business by the consent and permission of the true owner, under such circumstances that he is the reputed owner thereof; Provided that things in action other than debts due or growing due to the insolvent in the course of his trade or business shall not be deemed goods within the meaning of clause (c) Provided also that the true owner of any goods which have become divisible among the creditors of the insolvent under the provisions of clause (c) may prove for the value of such goods. ;