Seeram Appala Raju vs The Official Receiver

Govinda Menon, J.—The J. D. against whom a decree for a sum of money had been passed in I. P. No. 8 of 1927 is the applt. in this

appeal. One Chekka Rangayya was adjudicated an insolvent on 17-11-1927 & his properties vested in the Official. Receiver of West Godavari.

This Chekka Rangayya had to realise a certain sum of money from the present applt. & therefore the Official Receiver filed an appln. u/s 4,

Provincial Insolvency Act, & the Ct. passed an order directing the applt. to pay a sum of money as due to Chekka Rangayya to the Official

Receiver of West Godavari on 9-4-1941. According to the provisions of the Act, this order is tantamount to a decree which is capable of

execution. The decree was for a sum of Rs. 8120-5-11. Against the order directing the payment of this sum, an appeal was preferred to this Ct. in

C. M. A. No. 545 of 1941 which was, dismissed on 4-2-1943. In the meanwhile, the insolvent had died on 13-11-1941 & his legal

representative had been brought on record on 22-9-1942. But this is a matter of minor importance because nothing depends on the question as to

whether the legal representative was brought on record in time or not. As the Official Receiver had obtained the decree on 9-4-1941 which was

confirmed on appeal on 4-2-1943 he applied for executing the same against the applt. on 14-7-1943 by E. P. No. 59 of 1943. This petn.

underwent various adjournments & finally it was dismissed with costs on 28-2-1944.

Thereafter an appln. for annulling the adjudication had been taken before the insolvency Ct. with the result that on 18-11-1944 the adjudication

of Chekka Rangayya had been annulled. The result of this order according to Section 37, Provincial In- solvency Act is that the insolvent was

relegated to the position which he occupied prior to the date on which the appln. for adjudication had been made. This order annulling the

adjudication was again taken up to this Ct. & in C. M. A. No. 641 of 1945 this Ct. set aside the order annulling the adjudication & restored the

adjudication to its original state on 3-9-1947. The present appln. E. P. No. 8 of 1948 out of which this appeal arises was filed on 7-2-1948. The

learned Dist. J. held that the appln. was not barred because according to him the period of three years which has to be computed from 28-2-1944

expired during the period when the order annulling the adjudication was in force & therefore the Official Receiver had three years from 3-9-1947

to file the appln. for execution.

Mr. V. Ramaswami Aiyar for the applt. contended that even though there was an order annulling the adjudication on 18-11-1944, it was open

to the insolvent who had been relegated to the position which he occupied prior to the adjudication to have applied for executing the decree & he

not having done so within three years of 28-2-1944, i.e., before 28-2-1947, the present appln. is barred under Article 182 (5), Limitation Act. On

the other hand Mr. V. Suryanarayana for the Official Receiver very strenuously contends that the Official Receiver was ''eo nomine'' the D. H. &

when by reason of the order annulling the adjudication it became impossible for him to execute the decree there was something in the nature of an

impediment or embargo put upon the Official Receiver from executing the decree with the result that when that impediment was removed or the

embargo dissolved, it was possible for the Official Receiver to have availed of the provisions of Article 181 , Limitation Act, & apply for execution

of the decree. In other words the learned counsel contends that there was an obstacle put upon the Official Receiver from executing the decree by

the annulment of the adjudication. In our opinion the argument of the learned counsel for the applt. has to be accepted. ''Ex concessis'', after the

adjudication was annulled, it is possible for the quondam insolvent to have applied for execution of the decree obtained by the Official Receiver

because the decree was for moneys due to him & not to the Official Receiver. Mr. Suryanarayana contends that the capacity in which the Official

Receiver obtained the decree is not only as representing the estate of the insolvent but he had another role, i.e., as representing the creditors of the

insolvent. We are afraid that we cannot accede to that contention. When money is due to a person who has been adjudicated an insolvent & the

Official Receiver in whom the estate of that person has become vested files a suit to realise that sum of money, it cannot be said that he is

representing any of the creditors of the insolvent in realising that sum of money. Quite a large body of case law of this Ct. have held on interpreting

Section 37, Provincial Insolvency Act that after an adjudication has been annulled it is open to the quondam insolvent to take such steps regarding

his property which he could ordinarily have done unless there had been an order u/s 37(1), Clause (2), Provincial Insolvency Act vesting the

property in a trustee or in the Official Receiver. There is no such vesting, in this case at all. If there had been such a vesting, it would have been all

the worse for the Official Receiver, because, then, even the present argument based on an impediment or embargo or an obstacle cannot be put

forward by the Official Receiver. In our opinion, since the decree was capable of being executed after the adjudication had been annulled & till that

order was set aside, failure by the insolvent to apply for execution during that period would disentitle the Official Receiver from seeking to execute

the decree after three years from 28-2-1944.

The learned counsel for the resp. invited our attention to passage at p. 282 of ''Chhattar Singh v. Kamal Singh'', (49 All 276, at p. 282), as well

as to a judgment of our learned brother Raghava Rao J. in ''V. Venkataratnam v. V. Anjaneyalu'' (C M A Nos. 454 & 455 of 1947). The facts of

these two cases cannot be said to be in any way approaching the points in controversy in this case. Our learned brother had to construe the

meaning of the word ""closed"" in an appln. & he was of opinion that in the particular context of the circumstances of that case the word ""closed

should be understood as that for the time being the matter had proceeded out of the ordinary role of pending proceedings. The appln. to restore

should be deemed to be a revivor. We fail to see quondam how this case has any application to the facts of the present case. If our view that

during the time when the insolvency stood annulled & before that order was set aside it was possible for the quondam insolvent to have applied for

execution of the decree is right, then there is no impediment or any obstacle to execute the decree. The decree was in full force. It can be executed

by whomsoever is competent to execute the same. To take an illustration, supposing the Official Receiver, after getting the decree, had assigned it

over to a third party who did not put in any appln. for execution within three years of getting the decree & there after re-assigned it in favour of the

Official Receiver, can be said that the Official Receiver can ignore the time during which the decree had been in the ownership of the third party,

having been assigned in his favour, when seeking to execute the decree? The answer is an emphatic ""no"". We are therefore of opinion that since the

decree could have been executed between 28-2-1944 & 9-3-1947 & since no steps were taken towards that end, the Official Receiver''s appln.

E. P. No. 8 of 1948 dated 7-2-1948 is barred under Article 182 (5), Limitation Act. The appeal is therefore allowed & the E. P. No. 8 of 1948 is

dismissed with costs throughout. The costs will come out of the estate.