*THE HONOURABLE SRI JUSTICE L.NARASIMHA REDDY +C.M.A.Nos.2950 and 3361 of 2003 %14.10.2009 #Tripuradi Sadasiva Rao and others. ..Appellants Vs. $Ravva Somalingam and others. ..Respondents. !Counsel for the appellants : Sri K.V.Bhanu Prasad and Sri T.S.Anand ^Counsel for the Respondents : Sri P.R.Prasad <Gist : >Head Note: ?Cases Referred: 1. 65 MLJ 630 (FB) THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY C.M.A.Nos.2950 and 3361 of 2003 COMMON JUDGMENT: These appeals, under Order XLIII Rule 1 C.P.C., are filed against the order, dated 24-04-2003, passed by the Court of II Additional District Judge, Warangal, in I.A.No.1205 of 2002 in O.S.No.2 of 1966. As the number of suit discloses, the litigation, which is the subject-matter of these C.M.As, is spread over for the past half a century. Still, it did not reach finality. Briefly stated, the relevant facts are, as under: Sri Lakshmi Vilas Rice and Oil Mills, Warangal, filed I.P.No.2 of 1960, against their debtors, viz., Ravva Somalingam, Ravva Markendayulu and Ravva Vishwanadham, who are sons of Ravva Ramanadham, in the Court of District Judge Warangal. An interim Receiver was appointed, in respect of various items of property. The said three persons were declared as insolvents and two items of the schedule were brought to sale by the Receiver. As regards alienation of other items, applications were filed before the Insolvency Court, by the concerned parties. The insolvents had two minor sons each. The sons filed O.P.No.20 of 1961 in the Court of District Judge, Warangal, as indigent persons, for the relief of partition and separate possession of various items of property, including those, which are part of schedule in I.P.No.2 of 1960. They prayed for partition of various items, including those, which are subject-matter of the I.P. The insolvents, were impleaded as defendants 1 to 3. The trial Court dismissed the O.P., on 01-02-1963. Against the said order, A.A.O.No.83 of 1963 was filed before this Court. It was allowed, on 11-08-1965, and as a result, the O.P., was restored and numbered as O.S.No.2 of 1966. The trial Court passed a preliminary decree, as prayed for, in respect of items 1 to 3 of the suit schedule, through its judgment, dated 07-01-1970. It was dismissed as regards item 4. A.S.No.105 of 1971 was filed by the Receiver appointed in I.P.No.2 of 1960, feeling aggrieved by the preliminary decree, vis-à-vis the properties that were sold in the I.P., being items 1 and 2 of the plaint ‘A’ schedule. C.M.A.Nos.262 and 263 of 1970 were filed against the orders passed by the Insolvency Court in respect of items 3 and 4 of the schedule, in I.P.No.2 of 1960. All the three appeals were heard by a Division Bench of this Court and a common judgment was rendered on 17-10-1974. C.M.A.No.262 of 1973 was allowed and C.M.A.No.263 of 1973 was dismissed. A.S.No.105 of 1971 was allowed in part. It was held that O.S.No.2 of 1966, in so far as it relates to the claim made by the plaintiffs 2 to 6 therein is liable to be dismissed. A preliminary decree was directed to be passed only as regards the 1st plaintiff to the extent of his 1/9th share in the joint family properties. The decree passed by the trial Court, as regards items 1 and 2, ignoring the sale thereof by the Receiver was upheld, subject, however to the condition that the further steps, vis-à-vis the sale, shall be taken, after ascertainment and clearance of the pre-partition debts of the joint family. The 1st plaintiff, in the suit, by name, Ravva Sham Sunder is said to have died. His legal representatives filed I.A.No.2114 of 1993 under Order XXVI Rule 13 C.P.C., with a prayer to appoint a Commissioner to divide the properties mentioned therein. The I.A. was dismissed, on the ground that the conditions imposed by this Court, to be taken before the 1/9th share of the 1st plaintiff can be ascertained, were not complied with. C.R.P.No.4229 of 1997 was filed by the respondents 1 and 2 herein against the said order. The revision was dismissed as withdrawn. They were given liberty to move the trial Court for appointment of Commissioner, for partition of the property, after the pre-partition debts are discharged. Respondents 1 and 2 herein, some of the legal representatives of the deceased-1st plaintiff, filed I.A.No.1205 of 2002 under Order XXVI Rule 13/Order XL Rule 1 C.P.C., with the following prayer: “A Commissioner or Receiver may be appointed for dispossessing the unlawful occupants from the premises of H.No.8/1227, 8/1228 situate at Durgeshwara Swamy Temple Road and House No.9/1039 situate near J.P.N. Road, Warangal more fully described in the Schedule annexed hereto and to ascertain the pre-partition debts in accordance with the observation of the Hon’ble High Court in C.R.P.No.4229 of 1997 dated 22-12-1997 and pass such other or further orders”. The application was opposed by the appellants herein, who are the purchasers of various items at different points of time. Through its order dated 24-04-2003, the trial Court appointed one Mr.Sadashivudu, as Receiver-cum-Commissioner and directed him to divide the suit schedule property, after the pre-partition debts of the family, are discharged. The Receiver was also conferred with the power to take appropriate action to affirm the sale of items 1 and 2 of the schedule property, under the provisions of the Provincial Insolvency Act, (for short “the Act”). Respondents 9 to 18 in I.A.No.1205 of 2002 filed C.M.A.No.2950 of 2003 and respondent No.8 filed C.M.A.No.3361 of 2003. Extensive arguments are advanced by learned counsel for the appellants and learned counsel for the respondents. O.S.No.2 of 1966 was filed by minors, being two sons, each, of three brothers, referred to above, for the relief of partition and separate possession of the suit schedule items 1 and 2. By the time the suit was filed, the fathers of the minor plaintiffs, who are arrayed as defendants 1 to 3, were declared, as insolvents, and the properties in plaint A and B schedule were put to sale by the Receiver appointed by the Insolvency Court. In the partition suit, the trial Court took the view that the sale of the properties by the Receiver is in valid, and passed a preliminary decree, as prayed for, in respect of the suit schedule properties, except the one in item 4. The Receiver appointed in I.P.No.2 of 1960 and some of the purchasers filed A.S.No.105 of 1971, before this Court. Several contentions were urged. Prominent among them, were, 1) whether the suit was filed in the interests of minors at all; 2) whether there existed any circumstances for the trial Court, to pass a preliminary decree, and 3) whether the sales conducted by the Receiver were valid. For examining the first aspect, this Court took note of the value of the schedule properties in the suit as well as the liabilities of the joint family, by the time the suit was filed. It was found that the liabilities of the joint family were to the tune of Rs.4.5 lacs, being Rs.3 lacs towards debts to various individuals and Rs.1.5 lac in the form of arrears of sales tax. The value of the four items of the suit schedule property even according to the plaintiffs was Rs.1,10,000/-. After taking these aspects into account, a Division Bench of this Court held. “The total value of all the family properties of which partition was sought was Rs.1,10,000/-. The debts were therefore by far in excess of the family properties. There was no object to be achieved by the suit for partition being decreed in favour of the minors. The decree would only ultimately result in the minors having to divide the debts to be paid by the family. In those circumstances it was certainly not for the benefit of the minors or to their advantage to decree the suit for partition. By the time of the filing of the suit defendants 1 to 3 had already been adjudged as insolvents. A schedule of debts had also been prepared in accordance with S.33(1) of the Hyderabad Insolvency Act and that schedule showed that there were debts to the tune of Rs.3,20,000/- (vide Ex.B-9). These debts were in addition to the debts of Rs.70,000/- discharged by the insolvents by the sale of item 4. The plaint itself alleged that the interim Receiver appointed by the Court was trying to bring the family properties to sale to realize the debts. It is, therefore, clear that the suit was really a suit filed at the instance of defendants 1 to 3 to delay the insolvency administration and to postpone the sale of the properties by the Receiver. It was not at all a suit conceived in the interests of the minors. We are of the view that the minor plaintiffs should have been non-suited on that ground.” It was thus held that the suit was not in the interests of minors at all. The preliminary decree, in its entirety, was liable to be set aside, but for the fact that the 1st plaintiff, by name, Ravva Sham Sunder, in the suit, attained majority and he has chosen to prosecute the litigation. Therefore, it was directed that a preliminary decree be passed for 1/9th share of the 1st plaintiff, subject to an important condition. It reads as under: “In the result, C.M.A.No.262 of 1970 is allowed with costs. C.M.A.No.263 of 1970 is dismissed with costs. A.S.No.105 of 1971 is allowed in part. O.S.No.2 of 1966 on the file of the District Judge, Warangal is dismissed in regard to plaintiffs 2 to 6. The suit of the first plaintiff only is decreed. His right to 1/9th share in the joint family properties and liabilities is declared. He will be entitled to file an application for the appointment of a Commissioner to divide the properties. But such division shall be after the pre-partition debts of the family are discharged. The Receiver will take the necessary steps for the determination of the pre-partition debts binding on the members of the family. It will also be open to the Receiver to take appropriate action to affirm the sale of items 1 and 2 in the light of Andhra Pradesh Insolvency (Extension and Amendment) Act, 1965. The plaintiffs shall pay the costs of the Receiver in the appeal.” Reliance was placed on a Full Bench Judgment of the Madras High Court in Rangasai v. Nagarathnam[1]. Learned counsel for the appellants submits that the principle laid therein no longer holds good, in view of subsequent judgments. On the other aspects, it was held by this Court that the Receiver did not have the power to deal with the interests of the minors, who are the children of the insolvents. However, by that time, the properties sold by the Receiver, changed hands in the form of subsequent sales from one to another. Though in principle it was declared that the Receiver did not have the power to conduct sale, no directions were issued, as to the enjoyment or possession over the properties. This was obviously because the preliminary decree that may be passed, as regards the share of 1st plaintiff was, subject to clearance of all pre-partition debts. Depending upon the outcome of such enquiry, the Receiver was directed to take further steps to get the sales confirmed. This obviously means that, in case the verification of pre-partition debts results in a situation, where the properties that were sold cannot be retrieved, because of the value of the debts being more than that of the assets, the sales, which have already taken place cannot be touched. The net result is that there existed a decree in favour of the 1st plaintiff as regards his 1/9th share, subject to the condition that the division of the property shall be only after the pre-partition debts of the family are “discharged”. The 1st plaintiff died. His parents, who were none other than defendants 1 and 4, his brother, the 2nd plaintiff, and another, by name, Smt.Amaravadi Rupavathi, came on record, as legal representatives. At one point of time, they filed I.A.No.2114 of 1993 under Order XXVI Rule 13 C.P.C., to appoint a Commissioner to divide the items 1 to 3 of the plaint schedule properties. The trial Court dismissed the I.A., through order, dated 27.06.1997, on several grounds. It was observed that the Receiver appointed in I.P.No.2 of 1960 died, and no steps were taken to get a Receiver appointed and that the pre-partition debts were not discharged as directed by this Court. Respondents 1 and 2 filed C.R.P.No.4229 of 1997. However, it was dismissed as withdrawn. It was left open to them to move the trial Court for appointment of Commissioner for partition of the properties, after the pre-partition debts are discharged. Thereafter, the respondents 1 and 2 filed I.A.No.1205 of 2002 with the following prayer: “A Commissioner or Receiver may be appointed for dispossessing the unlawful occupants from the premises of H.No.8/1227, 8/1228 situate at Durgeshwara Swamy Temple Road and House No.9/1039 situate near J.P.N. Road, Warangal more fully described in the Schedule annexed hereto and to ascertain the pre-partition debts in accordance with the observation of the Hon’ble High Court in C.R.P.No.4229 of 1997 dated 22-12-1997 and pass such other or further orders”. The application was opposed by the appellants, on several grounds. The I.A. was allowed by the trial Court. The order passed by the trial Court cannot be sustained for more reasons than one. Firstly, the respondents 1 and 2 as well as the trial Court were not clear as to the distinction between a Commissioner and the Receiver. The former is appointed under Order XXVI, whereas the appointment of the latter could have been by Order XL. One and the same person cannot be appointed as a Commissioner and Receiver. The types of works to be entrusted to them and the circumstances under which they can be appointed are radically different from each other. Second reason is that the Receiver, in the instant case, was appointed in the insolvency proceeding under the Act and not in exercise of power under Order XL Rule 1 C.P.C. Any steps for appointment of Receiver could have been taken, only in the insolvency proceedings, and not in the partition suit. It was certainly feasible to appoint a Commissioner in the suit to take steps for passing of final decree. That, however, was permissible only after the pre-partition debts are discharged. Assuming that the discharge of pre-partition debts was to be undertaken in the partition suit itself, the direction to the Commissioner to take possession of any properties could have been resorted to, only after it is established to the satisfaction of the Court, that the pre- partition debts were discharged. The very prayer was to first take possession of the properties and then to take steps for discharge of the pre-partition debts. This is contrary to the specific directions of this Court, which have been reiterated from time to time, at various stages. On account of the improper approach to the entire issue, the proceedings did not reach finality and naturally it becomes handy for the parties to blame the Courts and the system. Respondents 1 and 2 appear to be determined in avoiding the exercise of determination and discharge of pre-partition debts and their anxiety is only to get hold of the properties as legal representatives of the deceased-1st plaintiff. Unfortunately, the trial Court did not make an attempt to understand the scope of the specific directions, in this regard. The C.M.As. are accordingly partly allowed, directing that, the trial Court shall take up final decree proceedings, a) to ascertain the pre-partition debts of the joint family of the 1st plaintiff in O.S.No.2 of 1966; b) in case, it emerges that the pre-partition debts are cleared, it shall be open to the legal representatives of the 1st plaintiff to seek partition of items 1 to 3, to the extent of his 1/9th share; and c) in such an event, it shall be open to the purchasers of items 1 and 2 to insist that the rest of 9/10th share of their vendors in item No.3 be adjusted towards the share of the 1st plaintiff in other items. The trial Court shall endeavour to complete this exercise within six months from the date of receipt of a copy of this judgment. There shall be no order as to costs. _____________________ L. NARASIMHA REDDY, J. Dt. 14 -10-2009. L.R. copy to be marked. (B/o) KO/GJ [1] 65 MLJ 630 FB