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TMI Blog1986 (8) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... wo sons Kannimuthu Chettiar and Kothandarama Chettiar. The plaintiff's and the defendants belonging to Kothandarama Chettiar branch. 2. The plaintiff's and the defendants were members of a Hindu joint family and there was no division of the assets of the family business. The plaintiff's grandfather, Kothandaraman Chettiar died in 1970 whereupon his two younger sons, defendants 3 and 4, assumed charge of the family business, excluding, their another brother viz., the 2nd defendant and his sons. The business was very prosperous and the family properties are described in the plaint schedules. Defendants 3 and 4, who are in management of the family business, have developed hostile attitude and are acting contrary to the interest of the 2nd defendant and his sons. Hence the suit for partition. The plaintiff's and defendants 6 and 7 are each entitled to 1/5th share. Since the 1st defendant, widow of Kothandarama Chettiar, died during the pendency of the suit, the plaintiff's and defendants 2, 6 and 7 are each entitled to 1/5th share in the suit properties. Defendants 3 and 4, who are in management, are liable to render an account of the assets of the family busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ₹ 65,000/- but the assets of the insolvents including the stock-in-trade, out standings, etc., were worth about ₹ 25,000/- only. Therefore, defendants 3 and 4 and their Father Kothandarama Chettiar approached Madura Mercantile Bank Limited to pay ₹ 65,000 to the Official Assignee and get an assignment of all the assets of the insolvents. The said bank agreed to this arrangement and they appointed their nominee one Ganapathi Chetty, a constituent of the bank. Accordingly, the bank took a promissory note for ₹ 17,500/- from defendants 3 and 4 and their father in the name of the nominee Ganapathi Chetty and paid the sum of ₹ 65,000/- to the Official Assignee through Ganapathi Chetty. Thereupon, the adjudication was annulled by the Court by order dated 2.9.1947 and the Official Assignee was directed to convey all the assets of the insolvents in favour of the said Ganapathi Chetty. Accordingly, the Official Assignee assigned all the assets of the insolvents including the 1/4th share of the 2nd defendant in the joint family properties to Ganapathi Chetty. The said bank sold the stock-in-trade and realised the dues of the insolvents. 6. The share of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant, who is the widow of Kothandarama Chettiar and mother of the 2nd defendant, filed a separate written statement contending that the plaintiff's have no right in the suit property. 9. On these contentions, the parties went to trial. The learned single Judge (N.S. Ram swami, J.) passed a preliminary decrees for partition of plaint items 1 and 2 in A Schedule, fixing the share of the plaintiff's as 3/48 each and dismissed the suit in respect of accounting of the business Egappa Chetty and Sons. The plaintiff's and the 2nd defendant are aggrieved by the judgment and they have come forward with the appeal. Defendants 3 to 5 have filed the Memorandum of Cross-Objections contending that the decree passed by the learned single Judge for partition in respect of plaint a Schedule items 1 and 2 is totally unjustified since the title of the insolvent/2nd defendant and his sons became extinct and it cannot reinvest under any circumstance. 10. The following geneology, which is not in dispute, is extracted for appreciation of the case. 11. A few facts which are not in controversy may be stated for appreciation of the points in dispute. The great-grand-father of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile Bank Ltd., when went into liquidation filed C.S.No.59 of 1950 on the file of this Court on the basis of the promissory note dated 27.4.1947 for ₹ 17,500/- executed by defendants 3 and 4 as well as their father Kothandarama Chetty. The Official Liquidators (Madura Mercantile Bank Ltd., being under liquidation) were originally impleaded as defendants in that suit but later transposed as 2nd plaintiff. Defendants 3 and 4 and their father contended in that suit that the promissory note for Rs,.17,500/- came to be executed only as security in order to make up the deficiency if any, on the realisation of the assets of the insolvent, which contention was accepted by the Court and therefore the direction was that an account should be taken regarding the actual amount due to the said Ganapathi Chetty. Ultimately it was found that under the promissory note only a sum of ₹ 6,876-68 was due from defendants 3 and 4 and their father. The said amount was paid to the Joint Official Liquidator as per Ex.D-11 dated 22.2.1960. 13. Ganapathi Chetty, who got Ex.D-8 from the Official Assignee, had not executed any document in favour of the Official Liquidators (Madura Mercantile Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order Ex.D-17 dated 26.11.1962. After having acquired the 1/4th share of Shanmugham Chetty's branch in the joint family assets, defendants 3 and 4 and their father entered into a partnership arrangement as per Ex.D-23 dated 25.4.1984 in respect of the business Egappa Chettiar Sons. Since then, the business was being carried on as a partnership concern between defendants 3 and 4 and their father. The father Kothandarama Chetty died on 30.5.1970. Hence the partnership was reconstituted on 12.10.1970 under which defendants 3 to 5 became partners in the said business. 15. Now, it is strenuously contended on be-half of the appellants/plaintiff's that more adjudication as an insolvent will not serve the joint family status and that the status of coparcener is not taken away by the fact of adjudication. In other words, it is argued that the father/2nd defendant continued to be a member of the joint family and that the property became revested with the debtor on the annulment of the adjudication. As against this, it is contended on behalf of the contesting defendants that the 1/4th share of the 2nd defendant and his sons (plaintiff's and defendants 6 and 7) is no longe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he estate on annulment. 17. The next point of dispute between the parties is with reference to Ex.D-8 dated 16.9.1947 and it is an unregistered document by the Official Assignee assigning the 2nd defendant's share to the guarantor. Learned counsel for the appellants argued that what was assigned was only a right to sue for partition and nothing more. It is further contended that the Official Liquidator filed Application No.1643 of 1959 for partition of the 2nd defendant's share but that was dismissed with a direction that he could take an assignment from Ganapathi Chetty and then file a suit for partition. It is therefore argued that since no further suit was filed by the Official Liquidator, the joint family status of the 2nd defendant continued and that his share had not gone out of the estate. It was further argued that Ex.D-8 is an unregistered document and that it has no legal effect at all. We have carefully considered these arguments, but we regret we are unable to agree. Ex.D-8 was executed by the Official Assignee under orders of Court dated 2.9.1947. Under Ex.D-7 the learned Company Judge permitted the Official Assignee to transfer-to the guarantor the assets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such person as the Court may appoint and in default revert to the debtor. 18. For this conclusion, we refer to the following rulings. In Minor Kandaswami Pillai v. T.N.C. Kandaswami Pillai (AIR 1947 Madras 312 = 1947 (I) M.L.J. 203 = 60 L.W.200 It is stated that, on adjudication of a Hindu father, the property vested in the Official Receiver, passes out of the hands of the insolvent, and if, in the order of annulment there is an order continuing the vesting of the property in the Official Receiver, the effect is to make him the legal owner of the property with the result, the insolvent had at no time, any legal interest in the properly after the date of adjudication. On this reasoning, it was held that the insolvent's two sons could not have acquired any right to the property and therefore cannot claim partition. In Kolaparthi Venkatasubbiah v. Madallapalli Venkatasubbiah (AIR 1942 Mad 371 = 1942 M.W.N. 114) there was no order reverting the property to the insolvent on the annulment of adjudication. It was held that the property vested with the Official Receiver when the order of adjudication was made and it had not yet reverted because, reverting was prevented by the vest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.543 of 1948 in I.P.No.30 of 1946 Ganapathi Chetty asked for another conveyance stating that the earlier document Ex.D-8 was not registered and therefore a further document was necessary. This, according to the learned counsel for the appellants, is conclusive proof that no interest was transferred in respect of the 1/4th share of the insolvent-2nd defendant in the joint family properties. Though this argument sounds plausible, we are unable to accept the same for the following reasons. Ganapathi Chetty was held to be a benamidar for the bank in liquidation and on the application of the Official Liquidator, this Court (Ramachandra Iyer, J., as he then was) has held that the ostensible title of Ganapathi Chetty had been perfected by the document already executed by the Official Assignee and therefore there was no need for the Official Assignee to execute another document. It follows that this Court applied its mind and confirmed the conveyance deed Ex.D-8 which had already been executed. It is also relevant to note that, as per the directions given by the learned Judge, Ganapathi Chetty executed a sale deed as per Ex.D-4 in favour of the Official Liquidator and on that basis the Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper conveyance executed by the Official Receiver and duly registered. 21. Having regard to the facts of the case on hand and in view of the order of the learned Judge directing the Official Assignee to convey the property, we are of opinion that the aforesaid decisions are not applicable to the facts of our case, since all the right, title and interest of the insolvent-2nd defendant in the properties were covered by the conveyance Ex.D-8. The case before us falls under category 2 of S.54of the Transfer of Property Act relating to registration. Category 2 relates to transfers by order of Court including transactions like the present one where the Court directs the conveyance of a property to a particular person by the Official Assignee. As already pointed out, the three kinds of transfers mentioned in S.2(d)of the Transfer of Property Act have been formulated in the Full Bench decision reported in Pinhamameni Basava Sankaram v. Ganapathi Narasimhulu (51 M.LJ.529 = 25 L.W.126. The result is, we are unable to agree with the finding of the learned single judge that this conveyance by the Official Assignee under orders of Court requires registration.. 22. Learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act imposes no disability upon members of a Hindu undivided family in the matter of entering into a contract inter se or with a stranger. It is worth repeating that the 2nd defendant-insolvent himself (father of the plaintiffs), who was alive for full 30 years after his adjudication, never thought of claiming any share in the business of his brothers. Further, the belated present claim of the plaintiff's to a share in the business of their uncles (defendants 3 and 4) is neither fair nor reasonable. Defendants 3 and 4 have paid large sums of money by borrowing from Madura Mercantile Bank and others to wipe out the insolvency of their elder brother/2nd defendant and save him from ignominy. Now, his sons have been set up to file this suit for partition in respect of the business of defendants 3 to 5 also. In other words, when the Official Liquidator sought to enforce the 1/4th right of the 2nd defendant in the joint family property, defendants 3 and 4 fully paid off the amount and thus get into the shoes or the Official Liquidator and acquired the rights of the 2nd defendant. Therefore, in any view of the matter, the plaintiff's and defendants 6 and 7 cannot claim any share in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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