NEELAM VENKATA NAGAYYA Vs. MATTE SITARAMAYYA BEING OF UNSOUND MIND
HIGH COURT OF ANDHRA PRADESH
NEELAM VENKATA NAGAYYA
MATTE SITARAMAYYA BEING OF UNSOUND MIND BY GUARDIAN M.SURYANARAYANA
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(1.)This is a revision against the order of the Court of the District
Judge, East Godavari, adding the first respondent as the 2nd petitioner in I.A.
No.37 of 1944.
(2.)The Official Receiver sold the property of the insolvent to the petitioner on
10th May, 1944, for a sum of Rs. 1038 subject to mortgage of about Rs. 15,000.
Gollapalli Venkatachelam alias Tatabbayi filed I.A.No.37 of 1944 on I4th April,
1944, for setting aside the sale held by the Official Receiver. To that application, he
impleaded the purchaser, i.e., the petitioner and the Official Receiver as respondents.
On 26th August, 1945, I.A.No.48 of 1945 was filed before the Official Receiver to
expunge the name of Tatabbayi from the schedule of creditors on the ground
that he was a bogus creditor. On 24th October, 1945, the Official Receiver dismissed
that application with a direction that the question may be agitated before
the Insolvency Court. Thereafter, the same applicant filed on 26th November,
1945, I.A.No.30 of 1945 before the Insolvency Court for the same relief . On
6th February, 1951, the Insolvency Court held that the said debt was not genuine
and, on that finding expunged the name of Tatabbayi from the schedule of creditors.
When an appeal was filed against the said order, that was also dismissed.
(3.)Matte Sitaramayya, the first respondent filed I.A. No. 23 of 1945 on the file of the
Insolvency Court on ist October, 1945, i.e., when I.A. No. 48 of 1945 was pending
before the Official Receiver. It is alleged in the affidavit filed by the respondent
that Tatabbayi and the purchaser were colluding together and settling the matter
out of Court and that, if that was allowed to be done, it would result in loss to the
general body of creditors. On those allegations, he was sought to be impleaded as a
party. Those allegations were denied by the petitioner in the counter filed by
him. The learned Subordinate Judge of Kakinada dismissed that application
on the ground that the application was not maintainable and also for the reason
that the alleged collusion had not been proved. On appeal, the learned District
Judge took a different view. He held that Order 1, Rule 10, Civil Procedure Code,
empowers the Insolvency Court to add a party in the circumstances of the case
and also that it was a fit case for exercising the discretion of the Court by adding
him as a party. The purchaser filed the above revision aginst that order.
Mr. B.V.Subrahmanyam, learned counsel for the petitioner, raised before
me three points :
(i) Order 1, rule 10, Civil Procedure Code, has no application to proceedings
taken under section 68 of the Provincial Insolvency Act.
(ii) Even if the said order applies, the conditions laid down thereunder
are not complied with.
(iii) In any view, the Judge should not have added a new party without
finding that there was a collusion between Tatabbayi and the purchaser.
Section 5 of the Provincial Insolvency Act (hereinafter referred to as the Act)
is a complete answer to the first argument of the learned counsel. It reads :
"Subject to the provisions of this Act, the Court in regard to proceedings under this Act, shall
have the same powers and shall follow the same procedure as it has and follows in the exercise of original
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