P.N.M.M. Muthupalaniappa Chettiar vs N.A.R.R.M. Raman Chettiar and Another

Wadsworth, J.—This appeal raises the question of the right of the insolvency Court, after property sold as the property of the insolvent has

been delivered to the purchaser, to entertain an application for redelivery by a person alleged to have been dispossessed when holding adversely to

the insolvent. The insolvency was one of 1931 in the Court of the District Judge of Amherst, Burma. The insolvency Court sent letters of request to

the District Judge of Ramnad u/s 77, Provincial Insolvency Act, seeking the aid of the official receiver of Ramnad in realizing the property of the

insolvent. On 28th August 1934, the official receiver, Ramnad, held a sale. A claim was preferred by the present petitioner in the Amherst Court to

the property advertised for sale. The claim was based on a sale from his sister-in-law in March 1934, the petitioner having married a daughter of

the insolvent. The District Judge, Amherst, asked the District Judge, Ramnad, to investigate this claim. The claim was not pressed by the petitioner

and was dismissed. The sale was subsequently confirmed and on 12th February 1936, the official receiver exeouted a sale deed in favour of the

appellant. In September 1936, the District Judge of Ramnad, asked the District Judge of Amherst td authorize him to deliver possession of the

property to the purchaser. On 25th November 1936, delivery was effected, apparently under the orders of the District Judge of Ramnad to break

open a lock. No one appears to have been in physical possession of the property at the time, though the present petitioner contends that he was in

notional possession through his tenant who was absent. On 7th December 1936 after delivery had been made to the purchaser the present petition

was filed under Order 21, Rules 100 and 101, Civil P.C., and Section 5, Provincial Insolvency Act, praying for re-delivery of the house. A

preliminary objection was taken to the jurisdiction of the District Judge of Ramnad to order re-delivery when the insolvency Court was the

Amherst Court. That was overruled and the learned District Judge held that the petitioner was in possession at the time of the sale and that delivery

having been ordered to the purchaser from a person who was not in possession under the insolvent, the Court must necessarily have power to

rectify its own error and he directed re-delivery to the petitioner. Against this order the purchaser appeals.

The question of jurisdiction is not without difficulty. All that the letter of request from the District Judge of Amherst authorises the official receiver

of Ramnad to do is to take possession and sell the property and send the net proceeds to the insolvency Court. u/s 77 a letter of request shall be

deemed sufficient to enable the auxiliary Court to exercise in regard to the matters directed by the order such jurisdiction as either of such Courts

could exercise, in regard to similar matters within their respective jurisdictions. The official receiver has been directed to take possession of the

property, sell it, and transmit the net sale proceeds. His jurisdiction is subject to the control, as laid down in the Provincial Insolvency Act, of the

District Judge, Ramnad. It may therefore be taken that in so far as the taking possession, selling and transmission of the sale proceeds to Burma

are concerned, the District Judge has the same powers of control over the official receiver as he would have exercised, had the insolvency been a

local insolvency. But to my mind this does not involve the exercise by the District Judge of Ramnad of a power to conduct the enquiries subsequent

to the sale and subsequent to the delivery of possession into claims by third parties who allege that possession was wrongfully delivered.

The further contention relates to the power of the insolvency Court to entertain an application for re-delivery when once the sale has been held

and possession has been given. I think it is well established that Order 21, Civil P.C., does not ordinarily apply be sales by an official receiver, who

is not required to follow the procedure laid down in this order and has powers different from those of an executing Court. The power of the Court

to assist the official receiver to get possession of the insolvent''s property is derived not from Order 21, Civil P.C., but from Section 56, Provincial

Insolvency Act, and under Clause 3 of that section the Court, may remove a person in possession of the property of the insolvent, provided that

that person is one whom the insolvent has a present right to remove. Presumably, with reference to this section the insolvency Court can hear a

claim by an obstructer and if that claim establishes possession hostile to the insolvent, the only order that could be passed under this section would

be to refer the official receiver to proceedings either u/s 4, Provincial Insolvency Act, or by a separate suit to establish the title of. the insolvent to

the property. But it is to be noted that in dealing with an obstruction the insolvency Court does not act under Order 21, Civil P.C., though the

questions at issue may be somewhat analogous. When so much is conceded what is the position where there is no obstruction. The insolvency

Court authorises the official receiver to take possession of an unoccupied house by forcing the lock, the order being based on the theory that the

house has been locked by the insolvent in whose possession it is alleged to be and who is subject to the control of the insolvency Court.

It seems to me that when a third party claiming adversely to the insolvent comes forward after the official receiver has taken possession and

asserts that that official receiver has wrongfully got possession of his property with the assistance of the Court, the matter has got beyond the stage

at which the Court is entitled u/s 56, Provincial Insolvency Act, to consider who is-in possession. The proper provision of law governing any

adjudication by the insolvency Court of the rights to this property of which possession has been delivered by the official receiver to the purchaser

would have to be Section 4 of the Act; and in dealing with an application u/s 4, the question to be decided would not be who was in possession at

the time of the delivery, but who is entitled to possession. It seems to me therefore to follow that the order of the learned District Judge, even

assuming that he had jurisdiction and assuming that the order is not vitiated by quoting the wrong provision of law, cannot be regarded as a correct

Order, for the order has concerned itself not with title but with actual possession. It seems to me that there is no jurisdiction in the insolvency Court

to order a re-delivery of possession from the official receiver when once possession has been taken under the powers in Section 56 except on an

adjudication as to title u/s 4. In the result therefore I allow the appeal, set aside the order for re-delivery to the petitioner and direct the petitioner to

re-deliver within one month the property to the purchaser from the official receiver who will be entitled to his costs throughout. It is of course open

to the petitioner to establish his right to this property by such separate proceedings as he may be advised to take.