Case: Venkata Reddi And Others Vs. Pothi Reddi

2. For appreciating the argument advanced before us a few facts have4 to be stated. Venkata Reddy, the father of the appellants, was adjudicated an insolvent by the Sub-Court, Salem in 1. P. NO. 73 of 1935. At that time only the appellants 1 and 2 were born while the third appellant was born later. The fathers one-third share was put up for auction by the Official Receiver and was purchased by one Karuppan Pllai for Rs. 80/-. The Official Receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on July 27, 1936 which was purchased by the same person for Rs. 341/-. He sold the entire property to the respondent Pethi Reddy on May 25, 1939 for Rs. 300/-.3. The appellants instituted a suit on February 1, 1943, for the partition of the joint family property to which suit they made Pethi Reddy a party and claimed thereunder two-thirds share in the property purchased by him. In that suit it was contended on behalf of the respondent that on the fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants. The decree was affirmed in appeal by the District Judge and eventually by the High court in second appeal, except with a slight variation regarding the amount of mesne profits. The decision of the High court is dated November 18, 1946. On January 18, 1946, the appellants made an application for a final decree which was granted ex parte on August 17,1946. At the instance of the present respondent this decree was set aside. By that time the new provision, that is, S. 28A of the Provincial insolvency Act had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver. The District Munsif held that Act 25 of 1948which introduced S. 28A did not affect the preliminary decree for partition since it had been passed on August 20, 1943. He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950. The appeal preferred by the respondent against the decision of the District Munsif was dismissed by the Principal Subordinate Judge, Salem whereupon he preferred a second appeal before the High Court. The High Court allowed the appeal and dismissed the application of the appellant for passing the final decree.

Reasoning:
6. The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos. We are concerned here only with the first proviso. This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court. The short question, therefore, is whether the preliminary decree for partition passed in this case which was affirmed finally in second apt peal by the High Court of Madras can be regarded as a final decision. The competence of the court is not in question here. What is, however, contended is that in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the Amending Act came into force the first proviso was not available to the appellants. It is contended on behalf of the appellants that since the rights of the parties are adjudicated upon by the court before a preliminary decree is passed that decree must, in so far as rights adjudicated upon are concerned, be deemed to be a final decision. The word decision even in its popular sense means a concluded opinion (see Shrouds Judicial Dictionary 3rd Ed. Vol. I, p. 743.) Where therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. The High Court has, however, observedmere declaration of the rights of the plaintiff by the preliminary decree, would in our opinion not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not becomeis not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by Ss. 151 and 152 of the Code of Civil Procedure. If that is what the High Court meant then every decree passed by a court including decrees passed in cases which do not contemplate making of a preliminary decree are liable to be "modified and amended". Therefore, if the reason given by the High Court is accepted it would mean that no finality attaches to decree at all. That is not the law. A decision is said to be final when, so far as the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicata between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code. A preliminary decree passed, whether it is in a mortgage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive. No doubt, in suits which contemplate the making of two decrees a preliminary decree and a final decree - the decree which would be executable would be the final decree. But the finality of a decree or a decision does not necessarily depend upon its being executable. The legislature in its wisdom has thought that suits of certain types should be decided in stagesand though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it. It would be relevant to refer to S. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its correctness in any appeal which may be preferred from the final decree. This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court passing thatthe case before us the preliminary decree was never challenged at all by preferring any appeal and, therefore, the matters concluded by it are not open to challenge in an appeal against the final decree. Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of S. 105, C. P. C. It will thus be seen that the decision relied upon has no application to the facts of this case.10. Our conclusion therefore, is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser as the official Receiver had no power to that sale. Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to S. 28-A.Since they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application effect in that behalf.