Rai Bahadur P.V. Srinivasa Rao Panthulu Garu, Official Receiver vs Yeruva Chinnapa Reddi

This arises out of an application to strike out the respondent''s name from the list of creditors of an insolvent. The debts shown in the schedule as

owed to the Respondent are numerous. One of those debts has, after annulment (an annulment that was followed by an order vesting the

insolvent''s property in a Receiver for the benefit of creditors) been the subject matter of a suit to which the Receiver was made a party and to

which the insolvent was the principal defendant. That suit ended in a decree giving to the plaintiff the right to attach the assets of the insolvent in the

hands of the Receiver.

Having that in mind the learned District Judge has treated it as a matter of res judicata that all the debts and not merely the subject matter of that

suit, were owing. He has not gone at all into the question whether the other debts were not true debts.

It will therefore have to go back for a determination whether the debts, other than the debts the subject matter of the suit should or should not

be expunged.

It has been urged that the Receiver has now no power to raise this question and Moturi Veerayya Vs. Rao Bahadur P.V. Srinivasa Rao, The

Official Receiver and Others, is cited in support. We are, however, clearly of the opinion that after annulment the Officer of the Court in whose

hands the assets are vested for the benefit of the creditors has the right, and indeed the duty, to bring to the attention of the Court, facts which

show that persons appearing in the list of creditors are, not in fact creditors. This is not invalidating the act of the Official Receiver in admitting a

debt. It is part and parcel of the necessary steps that must be taken for the proper administration of the assets with which he is charged. He has

this-power as any other Receiver would have it, and quite apart from any express statutory provision.

Remanded accordingly for disposal on the merits as to the debts other than the debts the subject matter of the suit O.S. No. 19 of 1928 (on the

file of the Sub-Court, Guntur). Costs will abide the event.