The Official Receiver vs Perumal Pillay and Others

Section 4 of Act V of 1920 is wide enough to enable an Insolvency Court to adjudicate upon questions of title "which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any case" of insolvency.

But the power given by this section is subject to the provisions of the Act, one of which is the provision to Sections 56(3), which is in the way of a Court removing any parson from the possession of property whom the insolvent has not a present right to remove.

In this case it is not admitted that the insolvent has a present right to joint possession of these properties along with respondents 2, 4 and 5.

In that respect this case differs from the facts in The Official Assignee of Madras v. Ramachandra Aiyar 1923 Mad. 55, where the insolvent had a right to be in joint possession of the family property with his sons.

Seeing that the Insolvency Court, even if it adjudicated upon the title of the insolvent, as against his sons, would have no power to recover the property from the sons free of their obstructions prayed for in the petition, it would be a mere waste of time to adjudicate upon questions of title, and therefore this was a case in which it would certainly be expedient to have these questions decided in a regular suit.

Section 4 reserves the power to Insolvency Courts to decline to decide questions which it does not deem it necessary or expedient to decide in those proceedings.

We think upon this ground that the Insolvency Court was right in declining jurisdiction. The Receiver has his remedy by a suit.

The appeal is dismissed with costs payable out of the estate.