Subramania Aiyar vs Valliamma alias Maragathavalli Ammal and Another

King, J.—The subject-matter of this appeal is a sale of certain items of property belonging to the estate of an insolvent by the Official

Receiver on the 12th July, 1943. The sale realised a sum of Rs. 18,100 and the present appellant was the highest bidder. Within the time limit

allowed by Section 68 of the Provincial Insolvency Act an application was made by the widow as legal representative of the insolvent to set aside

the sale proposing that she would make a deposit of sufficient money to satisfy the creditors. The sale has been set aside by the learned District

Judge in the order now appealed against. He provided that enough money should be deposited by the first respondent, the widow, to pay off the

debts of the creditors in full, calculated up to the date of the widow''s petition with interest. He also directed that compensation of five per cent,

upon the analogy of Order 21, Rule 89 should be paid to the appellant. The necessary money was deposited by the first respondent and the sale

has been set aside.

It was first argued on behalf of the appellant that u/s 68 of the Act, the insolvent''s widow had no right to approach the Court. It is stated that the

insolvent or his legal representative could not possibly be "" aggrieved "" by any act or decision of the Receiver which merely resulted in the

diminution of the possible estate which might accrue to them after the insolvency was annulled. Reliance was placed upon a Full Bench ruling of this

Court, S. Hari Rao Vs. The Official Assignee, High Court, Madras and Others, which was followed in Venkataramanayya v. Bangarayya (1934)

67 M.L.J. 942. Those cases, following the '' principle of certain English''decisions, laid it down that as the insolvent had no longer any legal interest

in his estate he could not be a person aggrieved by any act which might merely have the effect of diminishing that estate in certain eventualities. If

this principle be followed it seems to us clear, of course, that the first respondent would have no locus standi to apply u/s 68. But unfortunately for

the argument Section 68 definitely contemplates the insolvent as a person who might be aggrieved by an act or decision of the Receiver. If the

principle of the English decisions under S. Hari Rao Vs. The Official Assignee, High Court, Madras and Others, , is to be pressed to its logical

conclusion then the inclusion of the insolvent as a person who might possibly be aggrieved in Section 68 is incomprehensible. We need not discuss

this matter any further except to hold that it cannot possibly be argued as an academic point of law that this application by the first respondent was

not maintainable, as the section itself gave her a right to make it.

The only point therefore that arises'' is whether the order is one which ought to be supported or not. The matter is not free from difficulty and

there is no direct authority. For the appellant, much stress is laid upon the necessity for finding some positive illegality or fraud in the conduct of the

sale which would justify its being set aside, and we have been referred to a decision of the Calcutta High Court reported in Ahmad Mohammad

Pekak v. Mohan Gopal Jew 44 C.W.N. 665. On the side of the respondent, stress has been laid upon the very wide discretion which is granted to

the, Court by the words of Section 68. That section permits the Court to confirm or reverse or modify the decision complained of and make "" such

order as it thinks just."" On the whole, we consider that the order of the learned Judge should be upheld and that of the two points of view

presented to us the latter is the preferable. The main function of the Insolvency Court, as we conceive it, is to safeguard first the interests of the

creditors of the insolvent. Those interests have been amply provided for by the order complained against. Of course, they would not have suffered

if the sale had been left undisturbed. There can be no particular grievance therefore on the part of the creditors in the insolvency. Secondly, it

seems to us that if the Court is in a position to safeguard the interests of the insolvent, the Court should do so. Here of the two possible courses

one is of greater benefit to the insolvent''s widow than the other and we think the Court had power to consider her interests and to set aside the

sale by the particular order which it has made. Finally the interests of the outside public, including any one who may purchase property in a sale

held by the Official Receiver should not lightly be disregarded; but it cannot be forgotten that in a case of this kind the purchaser is particularly

anxious to retain an advantage which in one sense of the word he has accidentally secured. If the order had proposed no kind of compensation at

all to the purchaser we would certainly have modified it; but here the purchaser''s interests have not been forgotten as the learned District Judge on

the analogy of Rule 89 of Order 21, Civil Procedure Code, has directed that for the waste of time and trouble to which he has been put, he should

be given compensation at five per cent. On the whole we see no reason to hold that the order which has been passed by the learned Judge is,

beyond the powers, which Section 68 confers upon him. We think it is a good order and confirm it. This appeal is accordingly dismissed; but there

will be no order as to costs.