C.V. Ramasesha Aiyangar vs The Official Receiver and Another

Alfred Henry Lionel Leach, C.J.—One Kandaswami Pillai died in 1923 leaving a considerable amount of property, but large debts. He was

survived by two widows and seven sons, of whom only two were majors. The eldest son was Sivagurunatha. On the 16th January, 1924, the

second son, Chidambaram, and the widows purporting to act as the guardians of their respective sons, granted a power-of-attorney to

Sivagurunatha to administer the estate of the deceased. Why it was necessary to execute this power-of-attorney is not apparent. Sivagurunatha

was under Hindu law the manager of the family and lawful guardian of the minors. On the 18th January, 1924, Sivagurunatha sold certain

immovable property belonging to the estate and five days later sold other estate property. On the 22nd February, 1924, a creditor applied for his

adjudication in insolvency on the ground that the two transfers which he had effected in the previous month constituted fraudulent preferences

under the insolvency law. The application was filed in the District Court of Coimbatore and the District Judge dismissed it. An appeal followed to

this Court and this Court being of the opinion that the case had not been properly dealt with on the merits set aside the order of dismissal and

remanded the case for further enquiry. When the case came before the District Judge 6h remand Sivagurunatha consented to an order of

adjudication being passed against him and to an order vesting in, the Official Receiver the properties which his father had left. Accordingly orders

to that effect were passed on the 11th Augusts 1926. The Official Receiver took possession of the estate and has t a very large extent carried out

the task of administration. Nearly all the properties have been sold and the creditors have been paid eight annas in the rupee.

The present petitioner is admittedly a creditor of the estate. He also claims to be a secured creditor under two bonds executed respectively on

the 30th January, 1924 and 21st February, 1924, but the validity of these documents is challenged by the Official Receiver. On the 18th March,

1932, the petitioner, as a counterblast, filed an application for an order annulling the adjudication. This application was heard by the Subordinate

Judge of Coimbatore and was dismissed. The petitioner appealed to the District Judge, who concurred in the order dismissing the petition and

consequently dismissed his appeal. He then filed a petition asking this Court in the exercise of its revisional powers to set aside the adjudication.

When the case was before the District Judge the petitioner contended that the order was bad because Sivagurunatha had no personal liability in

the matter and that in any event the Court had no power to order the vesting of the entire estate properties in the Official Receiver. On the first

point the District Judge held that there was personal liability because when pressed for payment by a creditor Sivagurunatha had asked and

obtained time to collect the outstandings. On the second point he held that the petitioner could have appealed against the vesting order, but as he

had not done so it was too late to attack it. The petition now before us came in the first instance before Varadachariar, J., who referred it to be a

Bench because he was unable to accept as correct the opinion of the District Judge that the mere asking for and the obtaining of time to collect the

outstandings was sufficient to make Sivagurunatha personally liable for his father''s debts. The learned Judge also considered that the language used

in the judgment of this Court M.A.R.R.M.P. Muthu Veerappa Chettiar Vs. U.K. Sivagurunatha Pillai, in setting aside the order dismissing the

application for adjudication and remanding that application for inquiry was too general in character.

We are in entire agreement with Varadachariar, J., that the mere asking for and ""obtaining of time for payment would not make Sivagurunatha

personally liable and if he was not personally liable he could not be adjudicated for his father''s debts. But the question of what is the effect of time

being asked for and granted really does not arise in this case. The position here is that Sivagurunatha accepted in the insolvency proceedings the

contention that he was personally liable and had committed acts of insolvency. What was operating in his mind it is not necessary to inquire. It is far

too late in the day for the petitioner to challenge the order of adjudication, and the same remark applies to his attempt to have the vesting order set

aside. For over 11 years he and the members of Sivagurunatha''s family have acquiesced in the adjudication and in the administration of the estate

by the Official Receiver. Had he so desired the petitioner could have challenged on appeal both the order of adjudication and the vesting order. He

accepted these orders as being proper orders and would not have come into Court to-day if the Official Receiver had not questioned his claim to

rank as a secured creditor. This is certainly not a case in which the exercise of the Court''s revisional powers are called for. The order of the

District Judge was a proper one and the application for its revision must be dismissed with costs.