Case: T.S. Swaminathaudayar Vs. The Official Receiver Of West Tanjore

charge was created there was in equity a lien or a charge created on the properties falling to the share of the third defendants branch and he did not acquire the properties which fell to his share on such partition irrespective of or discharged from the obligation to make payment of such sum out of the same. The appellant was, in our opinion, entitled to payment of the sum of Rs. 24, 257-0-8 and interest out of the properties which fell to the share of the third defendants branch on partition and which came to the possession of the respondent by reason of the insolvency of the defendant No. 3. 29. This position was rightly appreciated by the learned District Judge when he passed orders in favour of the appellant on July 14, 1945. The following passage from his judgment, in our opinion, truly reflects the position as it obtained between the appellant and the respondent: When we scrutinize these facts the conclusion is inevitable that the claim of the Respondent to the present amounts stands even higher than on the basis of the priority of a charge created in insolvency administration, whether by virtue of a security a charge created by an act of Court or a lien arising from the operation of any law or statute. In fact, it could be contended with great force that the estate in insolvency which vested in the hands of the Official Receiver consisted of certain immovable properties minus the sum directed to be paid to the present Respondent by the sale of available portions of the estate as undertaken by the Official Receiver himself. This was because O.S. No. 22 of 1924 on the file of the Kumbakonam Sub-Court was a suit of partition in which the present Respondent was a sharer and partner, exactly as the 3rd Defendants branch represented another share. In decreeing the suit, equities arose for adjustment as between the several shares, and it was found that the 3rd Defendants branch was liable to the present Respondent in respect of certain overdrawals of the 3rd defendant during the minority of the Respondent, and for certain lease amounts due. The Official Receiver represented the 3rd Defendants branch in the appeal, since the insolvency had supervened. The matter would at once be cleared from difficulty if we assume that the decree had dealth with actual sums of money instead of immovable properties. It will he obvious, in such a case that the estate which would have vested in the Official Receiver after the Appellate decree, for administration in Insolvency, would be the amount or amounts assigned to the branches of the 3rd Defendant and plaintiff at partition, as shares, deducting amounts payable to other co-sharers including the present Respondent. Merely because the estates actually consisted of immovable properties while the claim of a co-sharer like the present Respondent to an adjustment on grounds of equity, was recognized in the form of a direction to pay, by sale of a necessary portion of the estate, the central fact of the situation is not changed. In other words, the present respondent cannot be really classed as a creditor of the insolvents branch at all. In respect of the sums due to him under the partition decree directed to be paid from the estates of the plaintiff and 3rd defendant as equittable adjustment, he has really superior title, and, assuming for a moment that the direction related instead to a specific item of immovable property, it is obvious that such an item would not have formed part of the estate in insolvency at all. As Mr. T.S. Krishnamurthi Ayyar for the Official Receiver has frankly conceded, it is a well-known principle that in suits for partition the shares are first assigned upon the simple basis of division, for administrative convenience, claims inter se being worked out by specific directions for payment. Nevertheless, in law and in fact, the shares actually derived by the parties to the suit are those subject to or qualified by the directions made in adjustment. If this was the true position as it obtained, and we are of the opinion that it was, then, the orders under appeal passed by the High Court were clearly wrong. There was no justification for the respondent to ask for a withdrawal of the sum of Rs. 5,200 which he had earlier deposited into Court on January 9, 1942, or for the restitution of the sums of Rs. 5, 500 and Rs. 26,966 and Rs. 11 together with interest thereon as claimed.These monies had been paid by the respondent in pursuance of the directions contained, in the decree dated May 9, 1938 in A.S. No. 60 of 1933 and they had been rightly paid by him and they could never be the subject-matter of any execution proceedings as initiated by him. Apart from the question whether S. 144 read with S. 151 of the Civil Procedure Code was at all applicable in the circumstances of the case, we are of the opinion that the claim made by the respondent for the aforesaid sums was absolutely unjustified. We are accordingly of the opinion that the orders passed by the High Court in A.A.O. Nos. 724, 725 and 726 of 1945 were wrong and should be reversed. 30. The respondent wrote on November 21, 1953, to the Registrar of this Court to say that none of the creditors had come forward to finance the defence of the appeals and the Insolvency Court, i.e., the Sub-Court, Tanjore had ordered that the matters might be left undefended as the funds in the estate were insufficient to defend the appeals at the cost of the estate. He, therefore, requested that when the appeals were heard and decided a direction might be given by this Court that there should he no order for costs against him, We do not see how, we can absolve the respondent from liability to pay the costs which must normally follow the event.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]If this was the true position as it obtained, and we are of the opinion that it was, then, the orders under appeal passed by the High Court were clearly wrong. There was no justification for the respondent to ask for a withdrawal of the sum of Rs. 5,200 which he had earlier deposited into Court on January 9, 1942, or for the restitution of the sums of Rs. 5, 500 and Rs. 26,966 and Rs. 11 together with interest thereon as claimed.These monies had been paid by the respondent in pursuance of the directions contained, in the decree dated May 9, 1938 in A.S. No. 60 of 1933 and they had been rightly paid by him and they could never be the subject-matter of any execution proceedings as initiated by him. Apart from the question whether S. 144 read with S. 151 of the Civil Procedure Code was at all applicable in the circumstances of the case, we are of the opinion that the claim made by the respondent for the aforesaid sums was absolutely unjustified. We are accordingly of the opinion that the orders passed by the High Court in A.A.O. Nos. 724, 725 and 726 of 1945 were wrong and should be reversed30. The respondent wrote on November 21, 1953, to the Registrar of this Court to say that none of the creditors had come forward to finance the defence of the appeals and the Insolvency Court, i.e., the Sub-Court, Tanjore had ordered that the matters might be left undefended as the funds in the estate were insufficient to defend the appeals at the cost of the estate. He, therefore, requested that when the appeals were heard and decided a direction might be given by this Court that there should he no order for costs against him, We do not see how, we can absolve the respondent from liability to pay the costs which must normally follow the event5. From this judgment the appellant appealed to this Court and these are the appeals now before us for hearing