General Body of Creditors vs Donga Suramma

The relevant facts are these. In O.S. No. 121 of 1936, on the file of the District Munsif, Tanuku, the plaintiff, a creditor, obtained attachment

before judgment of certain properties alleged to belong to the defendant. One Donga Suramma then intervened with a petition claiming that the

properties belonged to her and asked for cancellation of the order of attachment. Her request was refused. Thereupon, she filed a regular suit,

O.S. No. 389 of 1937, to establish her title to the properties and to this suit, both the attaching creditor and the defendant were made parties. The

defendant in O.S. No. 121 of 1936 became insolvent and subsequently died. Thereupon an application was made to add the Official Receiver as a

party. In the affidavit filed in support of the application, the following recital occurs:

Therefore, the Official Receiver, West Godavari, had to be included in his representative capacity as a third defendant in this suit in the place of the

second defendant and the further proceedings had to be conducted. It is therefore prayed that the Court may be pleased to add the Official

Receiver, West Godavari, in his representative capacity as a third defendant.

This petition was allowed. But the Official Receiver did not contest this suit.

The Additional District Munsif, Tanuku, who tried this suit, found the transaction to be true and fully supported by consideration. The learned

District Munsif also negatived the contention of the creditor that the sale deed in favour of Donga Suramma had been entered into for the purpose

of defeating the creditors of the insolvent. An appeal was filed; but it was dismissed. A second appeal to this Court also failed. Thereafter, the

Official Receiver, who had been till then inactive, bestirred himself. He filed an application under Sections 4 and 53 of the Provincial. Insolvency

Act for a declaration that the sale deed in favour of Donga Suramma was executed without consideration and for defeating the claims of the

creditors of the insolvent. The objection was then put forward that it was not open to the Official Receiver to agitate the question over again. This

objection was upheld and the District Munsif dismissed the petition. There was an appeal from that order to the District Judge, West Godavari,

who dismissed it.

The present civil revision petition has been filed to revise this order. The principal contention urged before me is that questions arising under the

Insolvency Act can be decided only by courts exercising powers under that Act and that the ordinary civil courts have no jurisdiction to do so.

Therefore, the decisions rendered in O.S. No. 389 of 1937 and the appeals therefrom, would not operate as res judicata. In support of this

contention reference was made to the decision in The Official Assignee of Bombay Vs. Obla Kuna Muna Sundarachari and Others, . This decision

does no doubt seem at first sight to support the contention raised. But even there, their Lordships do appear to contemplate that a decision given

u/s 53 of the Transfer of, Property Act might well stand on a different footing. Besides, there is one material difference here. Rightly or wrongly, the

Official Receiver was added in his representative capacity and this includes the one under which he is now acting. After having remained ex parte

and allowed the litigation to be fought out as though he had no interest in it he cannot now ask for a fresh trial on the same facts. The question on

which a new decision is now sought for arises out of the facts and contentions which have already been completely adjudicated upon in proceeding

to which he Was a party. I do not therefore think that this petition should be allowed. I am strengthened in'' this view by the decision in Lahori

Singh v. Official Receiver Sialkot AIR 1937 Lah. 4. The facts there were substantially similar to the facts here. It was held there,

Where therefore the question of title to certain property belonging to an insolvent was directly and substantially in issue in a previous suit between

the parties in which the Official Receiver was also impleaded, and had been heard and finally decided by a Court of competent jurisdiction, it is not

open to either party to re-agitate the question of title again before the insolvency Court.

The civil revision petition fails and is dismissed with costs.