Allam Karibasappa vs The Officer Receiver Bellary on 25 February, 2011

[Cites 14, Cited by 0]

Karnataka High Court

Allam Karibasappa vs The Officer Receiver Bellary on 25 February, 2011

Bench: V.G.Sabhahit

HJTHEFHG%ECOURTCH:KARNATAKA
CIRCUIT BENCH AT DHARWAD

DATED THIS THE £§""DAY OE FEBRUARY  

PRESENT

THE i-fON'BLE MRJUSTICE §J,G.§AEH«AEi::?.:_': '-

AND _
THE %~EOE\1'BLE MR.3U'E§V"F3:CaE E.v.'E:.N'TC -I

M,E.A.'j  aA.(3.223*2?3/j,>:::3;;>e%2IVA'E«A.,

M.F.A. Ac. 270's/20:34"  

IN M.F.A. NO.28"}'»v3/?_bO.4" 1;  

BETWEEN:

ALLAM KAR IB_ASAPPA'V   A
5/0. ALLAM EA.sAPPA,._ 
AGE: 64;"{EARS, 6-3AD'I'GI -

AEA.PE\LACE;«:EaﬁLaARv  %%%%% 
=_s:A<:E 'EEcEAsE.;; BY 5.9.5.,

 1;(_a)  ~.A.LLA.ifV1.,£>ODDABASAPPA
  3,3). _|;ATE AKARIBASAPPA
,._~'BU,$~'INESS,
.. 'respondents GADIGI PALACE
M-ESELLARY

  'E-.(r_{§ ALLAM VEERABHADRAPPA
" S/O. LATE A. KAREBASAPPA



1(c)

1(a)

1(e)

:2:
48'YEARS,BUSINESS
GADEGI?ALACE
BELLARY

ALLAM BASAVARAJ
S/O.LATE£XKARIBASAPPA
AGE:45YEARS,BUSINESS
GADIGIPALACE

BELLARY

ALLAM GURUBASAVARAJ 

S/O. LATE AKARIBASAPPA; 

AGE:4O YEARS, BUSMESS '

GADEGEPALACE
BELLARY

ALLAM CHANt'\i;.A"F'-DA  V .A 

S/O. LATE A.KAR;BA'$A'm5A 

A<3E:36,YEARs,._Btjsmgss  .' V'

GADI.Gi]}A_LA{:E V 
BELvL%.AR*';=_V  1 

Y.E'SAVRuUS-l:J 'EH S.1§NAGAMMA

«W/-O. CH'Mq~DR;A..S"r4EKARAPPA

HASARUR,r 2 <

E A, 50 '3'E?ARs.; KOPF')5.L

' a'  1{é)1E

V.ID."E1S\HA:\if H'AMMA PATEL
'SHAf\£.THAMMA, 44 YEARS

E :::"»-W;'O';E._P_ATEL RAMANAGOUDA
P'ARvATH1NAGAR
. M_AjZiN ROAD, BESIDE JAEL

 EELLA RY

VALITHARAMMA
mUO.VALIMALLESHAPPA
AGEIBSYEARS
BRUCEPET
OPR"K}GANESHTEMPLE



1(3)

10)

HUBLI

CE-EARAN LALITHAMMA
W/G. CHARAN SURENDRA
80, SHANTHINAGAR

II CROSS, BRLJCEPET
HUBLI

GADAGI SWARNALATHA 
W/OGADAGI *
CHANDRAMOULI

24 YEARS

KAPPAGAL RGAD

8ELi..ARY ' '

M/S. GAVISED.D'E_SH\§!}3§FiA }§.§'~J_b-C30,, -  
BELLARY, B3' 1715- C0¥\'.VEN'OR " _   

AGADI MARI" SID.~§é--ESH_W__A-RA;---"  %_
s/0. AGAQI 'Ei.._A;'f§SH"i*!3I.N'ﬁ..RAY'A-NAg '

MERCHA'NT;.iivfBELii}ARY'3:"

...APPELLANTS

(BY SR1 c1;v1v.NAGEVSz{. -»'COLJNSEL FOR
5:21. V.P.KU'L}_<ARN3I,-._AE)V. >_FQR"A1(a) TO A1(e),
SR1. ADITYA S'QNDHI,__HQLE.A'& HOLLA, AEDVS. FOR A1A--A1J

k%::ND;:k'%

AND A25} » _

%  EiI'f'f'Gb\F"E";i3i:.i§E33;i;Y VENKATARAMAIAH

Aw mm ESHAGAVATH GUPTHAV
S/(L. SENGAMASETTY SUBBARAYADU

--« AA MAJOR," MERCHANT
..j_-. vBEZ«!,LARY



: 4 :

SINGAMASETEV BHAGAVATH
GU¥'THA, S,/C}. SINGAMASETW
SL,fBBARAYA§LF,

MAEOR, MERCHANT

BELLARY

S. GOVINDAMMA

W/O. SINGAMA SETTY
SUBBARAYADU

R/O. BELLARY, SINCE
DECEASED REP., BY HER §_R.,

3(a) R. SUJATHA,

MAJOR, W/O SR1 SINDGAAASETW
BHAGWATH GUPTA,  
BELLARY.

THE OFFICER RECEIVER, 
BELLARY  - --.

(BY SR1. R.s.:sAw'§<A'R, s.,.,sR;'RARc5E
SUNDARSWAMY R~A,MDRjAs'A,_A:'ARo, ADVs., FOR R1 & R2,
SR1. K.C.ARIG_E, Aw. FQR.R3(a),
SR1. s.s..NAGANAND.,>sEmc)R COUSNEL FOR SR1 K.L.PATIL,

_,.ADv. FQR R4, H _
 gymY«.l,,,,LA§<'$HM.IKANTH"'REDDY, ADV. F

M  , A,-N 0'.' 2'7Q,6'[2 0404

 V' 5..

 -gE"rwé'E,§a,':".,V 

" 'A-LuLAM KARIBASAPPA
 * S/51>. ALLAN BASAPPA
 64 YEARS,

 GADIGI PALACE,

BELLARY,

"'A.,{AMENRD'E:3fviDE'; .

COL} RT "0 RQER'

  Dt.'i?.. ii.2G:D5)

""'---QQRESRONDENTS

OR R4)



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SINCE EECEASED B3' i.,R'S

1(8)

}.(b)

:{c)

1(d)

ALLMV1 QG{3D1§PF'A

3,59. LATE ﬁa.KﬁF€1IBASAPPA
BUSINESS,

GADIGI PALACE, BELLARY

ALLAM VEERABHADRAPPA

S/CI. LATE A. KARIBASAPPA  '_ 

48 YEARS, BUSINESS
GAEDIGI PALACE
BELLARY

ALLAN BASAVARA3

5/0. LATE A.Vi<A§?.IBASAP§§A 

45 YEARS, BUSI3\iES.S  ' ' %

GADIG1 PALACE   <
BE§_LAR\_'  
    
5,50. _1';;'&T'E"A.KA.£§EB';$.S'{§.§3¥7A,_ A

' 210" T*r':%:.4sR§;; "BLj:S:V§¢asSi%"""" "

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ALLAM c,rs.Afu-MPJPA

.5/0. 'LATE AKARIBASAPPA

  YEARSWSUSINESS
,('5A[>1G1 FALACE

 :1%(?«> E' A
  CHANDRASHEKARAPPA
'HASARUR,

A/V __ 1   

Y£é$.'£Ru$u H SANAGAMMA

 50 YEARS, KOPPAL

9 SHANTHAMMA PATEL
SHANTHAMMA, 44 YEARS
W/O, FATEL RAMANAGQUDA



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1(h)

1(E)

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M/S. G

PARVATHINAGAR
MAIN ROAE3, BESIDE JAIL
BELLARY

VAL: THARAMMA
W/O. VALI MALLESHAPPA
38 YEARS

BRUCEPET   
OPP TO GANESH TEMPLE; O
HUBLI 

CHARANLAHTHAMMAH_
mUO.CHARANSURENDRA
8O,SHANTHINAGAR,W'
IICROSS,BRQ€EPET
HUBU "~..<

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8ELLA..m__ 

,AV'ISIDQEf:§FEWA._fiA 'AND cO.,

BELLARY ~1=.sY vITS.CO.NV.E..NOR

AGAD1

MARE. s'IDDE:3HwARA,

 VAGAOI LAKSHOMINARAYANA

_M'aR<:H,Az$sT_, BELLARY
SR:.OAcO;.v';:'4M3E«sH, SENIOR COUNSEL FOR

...APPELLAi\lTS

sRI,vO;1m<ui;a<OAr2jr\:O1~;ADV. FOR A1(a) TO A1(e),
SRI.AADITYA'f5'ONDHI, HOLLA & HOLLA, ADV.

 FOR ;\'1(a).;TO.A1(e) AND A2)



Ex.)

 1,     

 (D? sR'1;a?,'LA"E;'s__H'5g1A:'kANTH REDDY ADv.,
  FOR R1, SRIYUTBS SSRIRANGA, P.S.BAWKAR

THE OFFECER RECEIVER;
BELLARY

SINGAMASETTY VENKATARAMAIAH
AND SON BHAGAVATH GUPTHA

S/O. SINGAMASETTY SUBBARAYADU
MAJOR, MERCHANT   
BELLARY 1

SINGAMASETTY BHAGAVATH
GUPTHA, S/O. SINGAMASETTY~»..V
SUBBARAYADU,  
MAJOR, MERCHANT 

BELLARY A  

S. GOVINDAMMA H
W/O.S1NGAM1A"S_ETfY  _  - 
suBBARAYA_DU};;.\_D-'      

R/O. %5DEDLLAR§r', 
REFQBY H'ERv_,LR.v;_  I
4(a) DR.' 4sD3AT'H».AA,v_'T'  
MAJOR, ._ " A ' " 

W/O SIN DGAIM vsEﬁ*»r "
BHAGAVVATH G.lJP_TA,.

(AMENDED VIDE
COURT ORDER
DATED 17.11.2005)

...RESPONDENTS

$UNDARSwArvW RAMDAS ANAND,

f.fj,.<.sR.1 S.S.I\£'AGARALE, ADV. FOR R2 & R3,
 ¥i.:C:f1AE\J"DRAKANT§-f ARIGA,R4(a))



MFA E\J(>.2873fZ0O4 IS FILED U/S. 75(2) OF

PROVINCIAL INSQLVENCY ACT, R/W SEC. 10¢ OF_..___CPC

AGAINST THE ORDER DT.16.2.04 PASSED ON 3Z.A.E\I§Lj)";§?;.\fF:I'?\&_'
I.C.NO.2/75 ON THE FILE OF THE ADDL. 
BELLARY, DISMISSING I.A.NO.XV Sj;OEI_,

THE ACT, SEEKING RELIEF OF ISSUAAHCVE 

DIRECTIONS TO THE OFFIcIAL'REj{:~E%IvEAR;, .uBEI..VLALR$éf'II" 

MFA l\iO.2706/2004 .' FILEVCIVii)/.SV.A.f_7,AS OF PROVINCIAL

INSOLVENCY A.Cj4T;,:'v..A(3l}§IVVE\3--S'%: TjFI.ERR.V_O'RI3;'E'»R OT. 15.2.04

PASSED ON *I;A.vNOﬁigxggIIIR"IVL_C;--I\I'O'.2/R5 ON THE FILE OF THE

ADDL. I>IsIi"I--:.;%I>GE', ,B'ELLAR*v, OISMISSING I.A.NO.xv FILED

..~'I.Ejv/SS.V_'i§§,,P\NAD 'V5 O"F-TiH_E,.ACT IN I.C. SEEKING RELIEF OF

F;SARj1JAN;:E,¢%'O:vATV'ERIITABLE DIRECTIONS TO THE OFFICIAL

REC E.I'vER, 'E5'£--:I.L'=A RY.

 ALVVTTHESE MFAs., HAVING BEEN HEARD AND RESERVED

 JUDGEMENT, CGMING ON FOR PRONOUNCEMENT OF



:9;
ORDER THIS SAY, SABHAHIT 3., , DELIVERED THE

FOLLOWING:
JUDGEMENT

These two appeais arise out of the order paseéd'~«byji:he:: : _ Additienai District Judge, Beiiary, dated on LA. xv in LC. No.2/75 and Ms.c.i>qo. :hidA..f¥5/u2Q.:dG','*-Wide-ireirn;Vie the iearned District Liudge has.»ai!QwedV7€;h'e apeiiﬁétiigh fiiiedh under Sections 144 and 94 read the Code of Civii Procedure in ii/is.('Z.~-E_\_i":c-._ N-'i3._'§--_'2'O'£1_O._i.fv§iih costs and has dismissed the appiication rsriéaiginser Sections 4 and 5 of Act, 1920 (for short, 'the ACt)VinV'I;-C.' rig;'ijV:r'5'w:i't»hi'costs, ivi.F.A. No.27e6/2004 is filed b'.'.,the épp:Iica.r:--tsA'inV'I'fA.><v and M.F.A. No.2873/2004 i.rj"is*'riiieq(p§2 the respondentsv in Ms.C.No. No.5/2000. 2:' z "'r'ATah'e'frz*aai:eréaE facts leading up to this appeal with td the rank of the parties before the triai Court are as fr3--i:id'w$:~ xjr : 10 : M/s. Gavisiddeshwara and Company, a partnership Firm was constituted by iate Sr} Ailum Karibasappa aéong wit'h_>SrE Agadi Lekshrninarayane Setty under the partnersiiip'-dj'e_ed. dated 28.06.1963. The said Firm was reconsrtiitutged""o}it.F*i"_4"i three more persons namely, Singamiasdetty. St:ébb;a'rAay.:.;d:u;.T;P13 Govindappa Setty and TS. SathVyana»r'aya'r_r_a' Setty. 'Srri Karibasappa was the major partne.r"Vof the Qdeadi Lakshminarayana Setty was theAi'c'oi§'yed'oar._0f On 31.03.1974, Sri Sathyanara\,<anajdettyj.::r'et_i;ted_V__ from the firm and his share for a consideration {of and the firm was reconstittjted. the other partners. Sri singamasettys.s'ubbérya{§,/s;_dQ} % died on 20.02.1975. At the __.ta'me o:?ihVis'~deati{,..._peV____o}rx.red large sum of money to various '*r_VredVi'to_rs..,VA_Sin*gAa"r*n_asetty Subbarayudu had constituted a firm kndowyn-.a'sVVSEn'§;:arr:.asetty Venkataramaiah Setty and Son. D.L. fjhettyka e"n'd.'":M./s. Provéntiai Vysye Education Fund I'dijlegisteyreddj, Beliary, initiated insolvency proceedings

--a-gainstdddthe contesting respondents before the Court of the "'«.i:§i'strict Judge. Beiiary, in LC. i\Eos.2/75 and W5. venkatappa :11: Setty and Compaey initiated irisoivency proceedings against the respondents herein in EC. No, 3/75. The respondents 3 and 2 in M.F-IA. No.2873/2004 were adjudged as insoi-i\}e«n't--$u on 25.05.1977' and they were having one anraa Firm, It was ordered to be soid and the »credi.tors'"§f,irai.rn.4_§.rx{aas._V satisfied. On 09.08.1977, the orig.°i'r§a:i:..'_'aopeii-a:nt.'._~--i_u Karibasappa filed LA. XV bet'o..r_e*~.a_%theA."triai__Cou"rt""'i'n~ 'LC. * it No.2/?5. The original app-ejiant is-ou:§'Li%.t"t~hAe receiv.er,ct'o accept % 95,ooo/- and transfei?' ' tire' share of iate Singarnasetty contended that there wagswai"cors-:1anded_VjT--co':a.tr¢§ct:«'prier to adjudication and that he was entitle;i':"to'E,hawre;"~.. on 04.01.1983, the trial Court aliowed add Séngarnasetty Bhagawath .....Q'upta«§; an~d Slingarnasetty Venkataramaiah and Son W(Arresp~o_.nde'_nts'tend 2 in M.F.A. No.28"?3/2004) as insoivents transfer of share of Séngannasetty 'VSVubba4ra.yE§.ciLi' id the partnership firm of M/s. Gavisiddeshwara 'and Croumriiany, Beiiary, in favour of the first petitioner subject '-~ifto"";:ertain conditions and directed the official receiver to '°*,e:§<ecute a deed of transfer of the one » anna share in favour V\'ff|\' ">_ .'-is ; 12 :

of the original epeeiiant. On 11.03.1983, the officie! receiver executed the deed of transfer in favour of-.._the originai appeiiant. Being aggrieved by the erder eAf_'the--ﬂtr.i.evi. Court dated 04.01.1983 on I.A.><v in 1.6;) "

respondent Nosil to 3 in M.F.A i\ie:;2A8i/'3,?2(3'..O4_;.tiA§ed_ No.:i.O4-8/1983 befere this Court. bi\;_..ord.er 10ED6v1983f stayed the operati.§n.ieorthe'--._:jerd*e¥'''''deted "

04.01.1983. However, subsequeai'tiy!_:'ddrie.n_g the"preri'dency of the proceedings before this# .c.Coi'ii'r.t:E' 530.1048/1983, the learned D§St:fiC't.':V}:Lldgi:§ an'n',ui1e§d,,'ri:_i:ie "order made by him hoiding that V"::'e.l?S'iiagwath Gupta and Singamaeetty 'Ven'Vkdte'rerrie;i:a'i2 insoivents subject to the proceedings "pdgridvivnig b.efoz'e:"'t»hi4s Court. The Division Bench of _._this in M.i5.r'~t...V:i§io.1:048/1983, has set aside the order A"ip_Va»ss§Ved__i.)yA'«the:"~Ee_arned District Judge on LA. XV in I.C. No".2.fi?--5* daee d%i'."o1.1983 and has remitted the matter to the iee4rraue'd.AVDi§trict Judge by order dated 1.3¢02<03..99-7! which V' rueadsi 21$ under:

:13:

"In as much as the order made by the learned District Judge has eiready been enniilied,V 7i._""i without making use of the directions issued.'<¢'_'» eariier by him and which were under before this Court, it becomes n_ecessary'"t'o" ' aside the order made by the iivear-netti lodge and remit the _matt4eri'Hfor 1 adjudication on this aspectsof» the »t:jat.te'r, necessary. It is open to thVe..i§Ae.rti'e.s t0.'rai§seAai,,ii contentions inciudind"':%'- the ;v--ediies'tito'i"ii_> as to whether an applicatiVo'ii'o_V vij_Efi§i.ViF€ is maintainabieor not.

Appeai £{ha|_i-4"s_ten:d-- diéspfosued..:ofV'Ae:.§:Cordingiy."

Thereafter, the lee'rifi'e:d.§dtd:it'i'*onai District Judge, Beiiary, by order dated the appiication fiied under v4_..VSectie.ns: 'V144 and with Section 151 of the Code of AV'{:iVE|1"»Pf0CA€di.ifé"§ifi Ms.C.No. No.5/2000 with costs and has disra<ais.sedVV"the:._a'ti.pi.ication -- I.A. XV fiied under Sections 4 and 5'.44of..t'he"Iit:t in LC. No.2/7'5 with costs. The iearned i§is3t'ri>:;t._.:J1.:d"r_:;e has directed respondent E\it>.1 W officiai receiver «-t'o'AA*go<7etti,:te such an instrument to be duiy registered SE ea :14: cenceilihg the registered transfer deed dated 11.03.1983 conveying one enna share of respondent No.3 therein Vinyighe said partnership firm in favour of the originai petit.i.o'neVr':i$i'e.V.':i. therein within three months from the date ('B3tiirepyoiirderf (16.02.2004). The learned Dist.rEct"}3udge.;h:asi._tii'i't'i1eVir--; observed that in the event of the office__oF_t.he o.f'f§r_iai. r.ece"i'v.eVr<_ being vacant, it is open to res;3dn'dent get V such 23 registered dee-d~.__ execLj'tedj u'b"y_ getting "vie court Commissioner appointed. ,AiE3.iVst_rEct Judge has further directed §th'a.t'gt.he ineedftii e>A<pe_nsVes"Vjfor the purpose of such registrair'ienT,.iNo'ij|'d._a\{ai~i-ing the same deposits availabieifin-.'their'D.iistr.igc't.::Court vide r 35,000/~» dated 19.04.1981}:*eo,idoo/$7 "d:':a:'_.te'd 25.05.1981 and r 69,955/~» observing that the present iegai AV'V.repre--seritatéve.s'*-of the deceased petitioner No.1 therein (a"pp:ei-ianvts' are entitied to receive the balance. The [said .erde"'rgV dated 16.02.2004 is impugned in these two 2 {._ =;

=,\u;,=-E. Ti4{§1.E'iar;thMi',!ai'zareyana Setty 0 ~« :15:

3. Misceiieneeus Petition No.9/19?7, which wag iater numbered as I.A.XV in LC. No.2/75 was fiieé by-.__the appeiiants herein averring that M/S. Gavisiddes.y§reire'-:"e.ri'c:F.. Comgaany, Beliary, i.e., the second petitioner M registered f'"irn'3 doing the cinema ititiiisinea'-<.; in ﬁrm owns Nataraj and Uma Theatres »ep_a:i--'titrorri"otri~e,r property in Beilary. Originai|3r,'--vt'h'et»firrn vh.ad._jt:if;eV'''i6i'ibviiing '' partners with their respective _sha~r"_e:'::iiiehownéiiagtainet their IWEHTIESI .... " SHARE 1 AiiumK'ar'ibase1Ei;ei:{1téiéetitioner) O - 3 - O .2 A.g%tTii'LaxmiV'n'a.reVy_e_na Setty O -- S - O "32 t Setty 0 ~» 1 -- O 4 i3'i*n'geirr--'F3etty Subbarayude 0 -- 1 -- 0 FA N9 of the Partnership agreement provides that on T retirement by death, irisoivency or rretice as aiaresaid, the 2}';/ii : 16 2 other partners shat! be given the ootéoo to ourchase his share of the assets or Eiabiiities as per the books of acce~~z;_nts. Therefore, it was expressiy agreed amongst the partn:e'rsf"Lt-that the retiring partners or partner who is adjudged' "

shouid transfer his share onty to otiiergziartijersii VVno.t'.»to--.' any outsider. The vatue of the shareiiiof' :the: partners is determined as per the books'--»o:f'~~..taccoV.unts.--._1:'v_Oh--e"""o'f"'jthei' partners, T13. Satyana-raVyana""'Eietti?'-»t...retireo'*rA from the partnership firm on share was purchased as ;3_er-::ei'a_Lise; %:r_e:fer:red'_:..toV' azoove by the first petitioner -- ﬁt'iiijrr3'=- the then book value of ? 95,00{:);{'«. -. pairtnership deed had to be amended an'ds4_aiiriVe\iV partrieiriship deed came into existence on ...tO1.04..«j§é:<t9u7'«-i~, iea\}'ir'irgV:t_helrrame of ""i".(3. Satyanarayana Setty. the first petitioner' 5 share was 56 '/4 % as ag"a§ri'sti' "fine of the partners of the firm i.e.,

-_§ingah'ia..seti:y' Subbarayudo died on 20.02.1975. $ei.ngar-naseitty Subbarayudu was in fénanciai difficulties at the iiofhhés death. A month after the death of Singamasetty "--r.S.Ljiibara3/udu, his son -- Singamasetty Bhagwat Gupta 3 ) :Zt?:

addressed a letter dated 26.03.1975 to the partnership firm expiaining his circumstances and expressed his desiiete transfer his father' s share to any one of the partn.6:.r_§§ V. ciause 9 of the Partnership agreement. He also._::rectt.ieisteid."'.p'i that he shouid be paid the same vaine iforih-is anna share as it was said to Sri T.Gi'~Sa'tyanar»g~3:g'na'~ That was also the value of t'r'ieV:"'share"--of"-F'§'i.=no"areas'etty Subbarayudu on that _.'iT"§~§§r.:'tiite'r._«.ofA"Si'ng'a:masetty Bhagvath Gupta was coinrntihiecateidi:to_«~'«aVl:i:Athe'_'_.partners. The other partners they were not interested. p"eiiit.ione.i"accepted the offer on 22.03.1935 arid.'Vreqiuijired"Sii:'n'ga'rnasetty Bhagavath Gupta to go over to yvith ."'izV.i's»- niother to receive the amount of 95,,f3.{)(')V/i=~. Tnh'e..V:said: letter of acceptance was dated _19"ZA5«.a-n:d"~--the letter that was circuiated for expressing thei«rx'o--_e'ini.o'n."_tothe partners is dated 20.031975. The same was ce':nnign'i'cated to the first petitioner by the Firm in their iii"iiiettiari--.datVéd 24.03.1975. The first petitioner accordingiy, ..jwr'dte' ietter to the second petitioner expressing his "'<.VV§«i'i'ii'ingness to purchase the share of Singarnasetty vi' :18: Subbarayudu fer ii 95,{}O0f~» on 2S.O3.19}'S. Beth the letters of acceptance was communicated to Singamasetty Bhagavath Gupta. Thus, the offer made by Bhagavath Gupta was accepted unconditionaliy H petitioner on 25.03.1975 and the sam'e""wes« commiin:'i'r;ated:'.'tol'3 the firm as well as to Singamasetty §5'h_a:g_aAyath"vg'.Z_§upta. V' contract was, therefore, complete::'I--t, is .iur--t.t_ie-it that when the arrangements nj:a'de.lVc,toﬂé><ecut'e"t'i*'ae*"relevani:

deeds for the transfer of £:i'i:;Se.".',,fQ1»'f"_"\amenciing the partnership creditors of Singarnasetty5insolvency cases in I.C. No.1/197:5.' and Ijc};uc§;2,{i1~9§scconme file of the District Court and wherefo're__',iithe"' kept pending. The District

4...y(:ourt..a%i:iowed thesaiyd insolvency petitions and directed the AV'petit'i«oii}er_s:.net"~-.__to pay any money to Singamasetty So.bt:rarayo'diJ"_*L~s"siege! representatives as Singamasetty ~,Bhagai4Iai:l':'V_Gu"ijta and also the wife of late Singamasetty 'r.:VV"2S.5fL:i§iJ*a--r_aytidu were adjudged as insolvents by the District 'en 2S.06.19?7', Therefore, the assets of late "*'.S'iVn'gamasetty Subbarayudu vested with the official receiver, 'Mayer :19;

Beiiary. The official receiver addressee a ietter dated 0613351976 to the petitioners requesting them not to pa);-.any amount to Sihgamasetty Bhagavath Gupta towards.'hi"sV:'if1*6."'.. share in the Theatres, but, to pay him and tC":_:"OiL"JfE3~:ii"i""Z*ji;'i""':' it officiai receipt from his office, j'i?i"e"*aisop i'f:€'fiii}V'§b..F_€'V{:3'*«*A.fi1E§'*i' petitioners to deposit a sum of 2* 3.913.62'-_6Q5Ps.>"Vf:_owarz:is.:'tEne'~. share of the iease amount. The"--»i.fii"ist pe.tit.ionerj''_irié'hisietter 6' dated 03.04.1976, appraised rer:e'i'ver of the position and requested theVo.ffic'iiaI"V:'rece:i§.e'i':t$ﬁeilary, to take steps to transfer'«..th'e saidi6s.iia're"'v1'ijhupfaivoyur of the first petitioner. ire:sp'ohaent -- official receiver wanted t*he= "produce ali the previous correspondehceii of share of Singamasetty invS_LEbb§i't'~;3.YVL£t§Li.V V"T"i".e..._._f.'.tFi:it petitioner produced the entire V"corre'spon.¢ienCe«"before the Officiai receiver on 09.06.1976. The «.reis;3Vorrti'e--nto:=h666% efficiai receiver by his ietter dated é '1V2.0?.ux197'?, eirected the second petitioner to deposit ali the amotiriigs that were reaiized through leasing out the Theatres ___"«ii-:hr'i§e'<:i'iate|y with him. The second petitioner again received Vahietter from the respondent - officiai receiver on 02.08.1977 27-';

as 3/' = 1?

:20: calling upon him to send him a copy ef the latest audit repert and the baiance sheet and the tree extract: of the £:iCC'Q_¥_§ﬂlf showing the amount due to his share, the present of all the movable and immovable properties of tliel' it / firm, the monthly income from;'th'e'-pro,perties'._oi'---the'*; company, the total cash balance then initlhe hands second petitioner etc. In additionﬁitoe tha.t,=.the_ - officiai receiver had aiso ;::a.€l.ed Lipon.tt'heV""3econﬁd"petitioner to recognize his rights as a sha:.evi1oii--di"et E0 C30 aﬂything without his than undertaking that no capital be incurred and no extensionhof It is further averred that the contracteflisale' and "pii"g=ichase had been compiete long _.i)iror toﬁgthe the insolvency petition. No outsider AV'CQl-\A:iti«.l):VeV partner_ as per the partnership deed. The official rec.ei3}e~tr,' the Genera! Body of Creditors are entitiefd' the value of the share of Singarnasetty §_uVt)baiiaAy1idti Setty, which is estimated at E' 95,000/«« as per

-.t.E.ie't)o'o'i§s of accounts. The first petitioner is prepared to and "-«istriiiing to deposit the said sum of é' 95,000/'«« either with the E ii; , uh" 3?;/.¢ Q..-

gas.

:21: respondent - officiai receiver or before the District Court. The generai body of the creditors are not entitied to anyot'h--ing more than that and they are not entitied to particio.ate_A» management and other affairs of the Firm. _"f_h'er.efo.re,f"the* appiication was fiieci under Sections and E33of_etii1'e- .eP.:ro'y<i_ncia'| Insolvency Act (hereinafter caiied 'the'V.Act').'.."_i§eek'inQ".Aitoifﬁ accept the vaiue of the sha'ire:°rof iate_ "'€3i-hgarnasetty Subiaarayudu and to execirteu_thefreietra_n.tVvoocurneintuin favour of the first petitioner transefevri-i_ng'."_tVhe s'h,ar'ej_'iof~~Singamasetty Samba rayiidu in of ithei efirst";3e'ti*ti'on_erA.

4. The .VaV;'f§v;'iiicatiooéttie---._IA.-'XV in Le. No.2/1975 was resisted byVV"r_espVon'si_e'r:t being the official receiver

4..i.conter:tif::ingt'~that V'h"e..V:h'adA:caiied upon the petitioner No.1 to A":oVrodu~e_e ..VethpeiC"~~a__iieged original correspondence dated 2o'.oii-if9:%'sf'.'tti;étt2'{oi3".1975 and 25.o3.1s7s in support of the 'aiieged zo'i"faer"'"and acceptance by issuing notice dated fQ',??.A()»¢ii';-1.'9i7V6 for his inspection and that the same could not be

--ifégirodticed, in spite of the fact that he had offered that they "acouid get back the originai records after comparing the same :22;

with the copies. Ever: the reminder issuee in that regard on 02.36.1976 did net yield any result. The petitioners'..:"h3_Vd maintained that the copies produced were the the erigiriais produced. Thus he was to apgarieihersliii either the originals were not in existehce:.orA.We-re':4ine.oh*zp.lete... The official receiver has alsopl-e.aded"._t'h'at the'V'i'g:o:rjiterij}:ieCi book value was seemingly in 1/16"' share of T.G. Satyanaray'a:h:a'- pverehased at ? 95,000/--~ was bound to b'e.'a.'j,iVn*Vatter of fact, it was so i3UFCha4Sé.§4lliiéfhrh'__Con'siderati_ori:.:Vo:'i'"'<'*«~wt,4O,OO£3/-- as per the mfori'naVti€o.n f*ii_'_"V;"é._:.lE\.rVeg» the book value at ? 95,000/:":--,_A as to be on higher side by the time it virasto be wherefore, he sought for _. ad ismis,.<.:.é=";i'l of the No.1 filed additional objections statern'ent"'-Vsreallfirming the very contentions made in the 'é'g;=i:g"ir:a.l_.A objections statement by pleading specificaliy that ~--.resA{::orit3Aent No.3 alorle had no absolute right to part with the "-4.eo'n'tended 1/16"' share in as much as, his mother was not a :23: party to the said contract arrd that the share of respondent i\ie.4 was to vest in him. Further, it aise came to he cite-'b._bed with the said contended contract, which was void the appiicabiiity of the provisions of Sections 53, and of the Act.

6. Reseondent No.3 fii'ed"'«objehcﬁonsi1j'deVr.:v'ir3'g'tithe 'V averrnents made in the a§)pViicatio'n and VVp!.eaded'that':by 1975 and subsequently, the valiieAot'-V-share':w;as"i*r3creased in as much as the m§ari{:et1~.vaiii%ieroAf*~i.i'gi'boVut"j'?V3,5O,OOO/- and according to erstwhiie partner of T.G. Satv.anarayai:af'-Siettﬂ/'ii.t:h'at'was sold was for more than ?' 1,4O,OOO/9;._whereas}V.a amount was brought on book .-of He has :fLi__rtAh,er stated that due to the sad demise "rof fath;er.pw.,hi*%e_ in heavy indebtedness, the creditors of the him for settlement of their debts. He was zjundet the beiief that the petitioners, being his welt iw.isiiier.s wouid heip him. Petitioner No.1 asked him to sign

-.ii.'on'§th'eAAbiank papers assuring that the same would be filied with necessary contents so as to bring the creditors r,» I §g_,,L\:4 :24?

around. Thus, he had signed on biank oaoere somewhere in :t9'.?6 during the oendency of the insolvency aooiicatioes;'~._end onforttmateiy, the signed papers were frauduiehtly.«ni'eV:d"eﬂeo§e.. of by the petitioner No.1 with conhivarace oi:freijrraaihidriircif H partners to create contended saie ;ai"nag. «'1'}{1Ejf":AiV'sh_are--for3 grossly inadequate Consideration ofgfr. it further averred that he r:e.\V}e'r ' any communication of the ac<:ep&tanr:;e7'ofthie-.ai¥eeed"'*offer, Per contra, it has been pleaded."Vthavti"'V§\ge:dVi~,Ai_'i%.a'k_5hminarayana, being the convenorlioif. of the power of attorney No.3) and that he and petétiof-;@i:%:'~_:NO'¥1 had forged the document dated 2O.O3".r1497_Sx"and'_auit the Said claim, further __t;gmmaa5¢ait:ons°datea_ 24.03.1975, 25.03.1975 and __Created regarding the aileged offer and eccu:eota.i1cVe.'V'«."_';f\i§'A'e:tVhvat the conduct of the said convehor was booed ate. ehoiefthat ail those documents are fabricated and 'theft they had cheated him (respondent No.3). He had not '~e-xetguited any document offering the transfer of such share Veoyr there was acceptance ehd thus; there was no concluded ; ~ *=.{~o-xz/2»

1.;

:25: Contract. It is further averred that his mother, being resgohdent Nee had not been adjudged as insolvehtVV':§~:;:'ia's much as the matter was heading before this .

No.70:/1977 and that under the circiithstancesg'iad}ud'iieat.ing:" '*~ of the same made by the D€t§€iO:ﬂ8!'S-3;"'*.,%\i:Ol.i'i{71_' violating the order of this Court_."'-tjle havsiidenieidi'A»ti":atmttierie was cohciuded cohtractand sot.i§'ht*~.for d'isrh§.ssavi% of the petition with costs.

7. Resh'o44ndl:_ei.n't tdo,_{ti~f§.Ied«- cejeﬁtaohs contending that her son 5VvS.i.ng'av:h'as1etty (respondent No.3) has not e.nte.red.VVihie».»o'oh»t':*a:t't~--and that she having succeeded to the share.._Qf Vhe':-_I.'ate»- in the said firm had not .....either«o'fteri=ed no'r'ia,Vg:reed to part with such share. Thus, she ":ai»so'«sQughti.fot'd.ismissa| of the petition with costs.

"---V:A.t42'a'iza:'ag regard to the above said pleadings with toii./i\,XV in LC. No.2/75, the foitewirig points for ._tié'détei*rh:inat§on were framed by the iearned District Judge; .

:26: "1 In View of annulrnent of adjudged insoivency of respondent Nos.2 and 3, does necessity stiii exist to consider this i.,A.><V ?

2. If so, has this Court jurisdiction entertain I.A:)<V ?

3. Whether the appiicationgiividieé'1..§,2$i.,_X\/A*i.n'-.,V'"V"

the present form is tenabie ?

4. Whether the originai p:e'titioner been abie to prove the oreisenti'rggaondienit No.3 Singamasetty Bha'go--aiN?athe_ii'Giiotha did execute Ex.,l3?éI{'ttie dieied' ofi'e.ifi-on 2E},i33.1975, offering__ oijfonedanna of his latefatheiri.7VSin'c},ar'n_asetty éoibharayadu in the saiQ;,,,53a_rtraerS'h"'s'p%V'c»firrn;':"to' any one of the rernainingi gartners onjrecord ?

1f"s.o, whe'"t'h'eVr the original petitioner No.1 i «TneAd'v.a;co_e'p:te--d the said offer :2 'Wh"ether the said transactions as covered by",E><s.P4 and P6 were protected by the Vdprovisions of Sec. 55 of the Act ?

ii..'r>;

v_5. .

:23';

27, ii' yes, whether the reiiei' sought in I.A,><V deserves to be granted ?

8. What order ?" __

9. The application ~ ii/is.C.i\io. No.5/2800 wasfﬁijed by respondents 2 to 4 supported by the facts that in the event the said I.A.X\i faiis,.V_t'he:.sai_i.dVVi'4sa|ie'..'iK V' deed (registered transfer deed come in the way creating conf.zi_sion 'and-..where.'i;ore,"it "was essential to make it inoperative"i'i»,V:"or eise._irrie._r;ar"a_b|e ioss wouid be:,_caus'eid~i.5t_o averred in the said appiication that respondent ' 'V'4~-.:"officia| receiver did execute registered trarisferde'ed."onv.i1.03.1983 conveying the share oi"~orie'-- that stood in the name of fate Singamasetty E31u.bVi3e-rayadni.V'iVri"i-favour of the originai petitioner No.1 in pursoa;_iceV_.~of:vi'i?.he order passed on LA. XV or: 04.01.1983, "*'.5i.".:"respojndetriits' 2 to 4 came up with interim appiication under 'p-rmrisions of Sections 144 and 94 read with Section 151 i(_Zi?_C;§, praying to direct the official receiver to execute a ir ivy " é:

:28:

decument caeceiiirig the saie deed executed by hirn or eiternetiveiy send the orders of I.A.><V to the reg_4ivstet_i'rig authority with suitabie directions, in the event of _ LA. XV in LC. No.2/1975.

10. The appiication ---

by the legal representatives ofAt_treA'~o_rig_inai""petivtionfer No.1 1(a), 1(c) and 1(d) have""co'm.e'«~.n;§.,'tvi4thsithe.,,counter. They contended that nei_the_,r '3djfddi'ca't.i.orr"ot:'inn's'olvency dated 25.06.1977 nor' 28.04.1996 nor seti:ing..a.si_d"e..:o'f;:'th:Ae the District Court on LA. on hand "of this Court in i'-'i.F.A. No.1048/19834 wouid give right to

4.--v.respond;ents 2 toV"4~-.o:fV_anAv kind in respect of the said transfer V"d_ee;d'that:_haAs«.vaiready been executed by the officiai receiver be.irir._j' in favour of the originai petitioner 'No.1 'in'. to the said one anna share of iate "SigAai'n-eesetty Subbarayudu in the said partnership firm. It is Jfurtiheriiaverred that as the officiei receiver ~ respondent "~.:i\i.o;'1, in whom the estate of the insdlvents was vested and it fidfg' Kr :29: once the said deed rras been executed in aecordanee with the eohciuded contract, the District Court cannot entertai.of.a'riy application to canoe? the same or to give any dire_et_io'n" _ matter. It is further averred that on...d_emi§se"'ot:fEiat'heVt_of7i_u respondent No.3, respondent «'S_in~g:amaé'e.tt'y1.h_'i Bhagawath Gupta was a partrier_i'r'.-.V.theV--'S'eid par=tV:neifsh.i.DV in piace of his father and as he wa_e2a»djuVd_ged.ao_i:;frf5oAiVii/ent, he ceased to be a partner'froth-theV{,d:ate--Vi'Vo.f"adjudication and therefore, he did_:"n_ot Nmaintain the application an§d..thg to get the saie deed the grounds known to Jaw in -and accordingiy, sought for dismissai ot ut'hee,ppi'ieatVi'.on: costs. regard to the contentions urged in the apipiipliaiiof.' 5/2000 and the objections to the said 'aVppiica"tionV,'V "the foiiowing points for determination were :fr=ao"ied_b\,rV"the learned District Judge:

K5,.' ' «J:--« gr» ~ :33: "1. Whether this Court ceases to have jurisdiction ':0 entertain the appiication preferred in this Ms.C.i\ie. i\ii;i.5;'ZOGG ?

2. If LA. XV in EC. No.2/'?S cieserves.Vi;QI;':""b.:eff. ih dismissed, whether there is a need"fo«r issuance» V of directions to the resﬁondenfi ciifficiﬁii receiver to execute such .<:iei;ur"i"ie"nt,_"canceri'i'ih'nVg.

the deed of transfer dated 11i;r4e3i.t1.983ii?.._ "

3. If not, whether_aitei'ne.tViveiy::thisCeiirt is bound to senci' ._suci"g"drder the registering4_agith1a'iri__ty.Viivith. s;uitab~ie"d'ire'ctions ?

4. What __.After r.e.ijien~d for Vconsiivderiiation of I./»\.XV, the parties adduced A"fi_irthie-r_Vevid«enee~--.and thereafter, Ms.C.N0. No.5/2000 was filed-.ii".--.,TheR."_i»ea'::n'e.d District Judge after considering the ;;onteiit'i.r>}1s.«Vef the Seamed counsei appearing for the parties and'onepiareciation of the evidence adduced before him, by 4V~.__t-e-rderidated 36.02.2004, answered the points framed on "«t:iV%,;éii.ii><v in :.c. E'~§O.2;'75 as foliows: :31:

"Point No.2 ........ Affirmative Point No.2 ......... .. Affirmative Point No.3 ........ Affirmative Point No.4 ........ Negative Point No.5 ........ Negative Point No.6 ........ Negative _ Point No.7 ........ does not "st3V:i*\;':ve foi".__ C;onsider.a.tion_ "

Point No.8 ........ Aéoer. th_effEne'1 i"-o';(fer. _ The Iearjieoty a'a._'r'V1V's"ivi.'IVered the points for determanatkm framed7ij;n,Ms_.oC..ﬂixso.5/2000 as foEIows:--

"Point ....['.....'.'.NeQ'fe.tive P«::§j;§tt'¥\£o.2 Aﬁirmatave » V1"-P_onn,t No'..3"~-..._ ...... No need to consider H = ..... .. As per finai order"

2? ,.

my :32: and aocordirigiy, dismissed the application ~« I.A,><\/ filed under Sections 61 and 5 of the Act in LC. No.2/19?.SVs»raii%:Vh Costs and allowed the application ~--» iVis.C= under Sections 144 and 94 read with Section 3,-3.1;V-of_wt:h'e::Cede:"

of Civil Procedure with costs. 8eingV'»._aggrieved.hype-thellr-ssaieiar order passed by the learned DistirlctJudiig-e"datee'V:16;.$2V.2(:§O=§i, these two appeals are filed.

12. We h'?W'€ !'1ea'rd-tithe».fluear'flé§3".ifsenior counsel appearing for i-and_._.-'die'iea'rne<:E senior counsel appearing for *

13. Th_ei Vlveamaed counsel appearing for the _..,.a}3i3)eI1,3§i'ltSi'SiJbi'T'lVl"L¥,fi?V(;?3V'that the orders passed by the learned "~_Disti=i.c_t JuAdge.4:lrrapugned in these appeals are erroneous and corztrarry Vto'a"_i'aw'~i;a'n.d are liable to be set aside. The learned

--senior"' cas«.i'asell submitted that as per the terms of the it "'V.partr;g_rsh'E'p deed, whenever there is death of a partner, his ..uié'shaVrhe'ir:ara be soid only to other partners and not to an "--«:fo'L3tsider and the correspondence between the parties would 4'?

:33: cieariy Show that there was offer and acceptance for the getchase ef the share of deceased Singamae-~e_tty Subbarayudu in respect of one arma share in the the partnership firm on the basis of the vaiue accounts. During the pendency of M:F;'A.--Nee,37'0éiV$'f'n,tI98.3,ithe".. it sale deed has been executed in favotir the official receiver as per on 11.03.1983 and the said faCti""'t':JéjS "":3tepg).tessved..»v:§by the respondents in M.F.A. No.'i'Ur~§:8,"1t9F§f';:', disposed of on 13.02.1997 and-since not brought to the notice of s_etmesEde the order on I.A.XV ahd i.refﬁiiitteraijiee'thiehdhiatter to the trial Court for consideratiorr,_of the .a§;piicie§"t.ion, if necessary. Further, the

4....iearne..d}gsenior ncedinseii submitted that in view of the A'*pVro\:/Vireipr'.siVA -S:ecti_on 37 of the Act, the conveyance executed Bhagwath Gupta in favour of the

--a;:>g3eiE'ue's1ts"-'dieseved. Section 37 of the Provincial Insoivency '}§rct"i-ea_dsvVés foiiows:

£5' :34: "37. Proceedings on annuirnerit :«~ (3.) Where an adjudication is annulled, ali seais and V dispositions of property ano payments ciuiy made, and all acts therefore, done by Court receiver, shail be vaiid; but suoj_¢Cf"'E3s~if=.u" % aforesaid, the property of the tieii)'tor«,. who adjudged insolvent, Shali vest ii?

as the Court may appoint.,;'or in oiei_'aiLilt ofi"ai'rif,r:'_v' such appointment, shali revleirtita the"c!eb'ltoi' to', such conditions (if e'i'.~y*),as,__ti'§e C'oLirt«'lm_ay, by order in writing, decl,a--re._ ' l (2) annuliing an acijLVjVVcl'i%cati'orfi_Vshnaili' lojeﬂtjubiishléti in the official Gazette ,Ell'ld'iE"i:.jS,,:§§Ch':GthEf' rrianner as may be prescri'be_'dl.",V T'i'u-elearnetl. senior coti'h'sei, in support of his contention has rei_ieoi_i.t.ipon»,tneirietision of the Hon' ble Supreme Court in BABU»..,,:P§AM.~A:Lt.AS DURGA i>RASAD Vs. INDRA PAL SINGH r?"I:sj««.(o.EAAp) inﬁ-1.9.5., ((1998) 6 Supreme Court Cases 358 ), it ii£%'l:i,ei'eiii:'.-'the Hon' bie Supreme Court, white considering the '11' inrosfisions of Sections 37, 43(1) anti 35 of the Act, has held 3 ')__ : 35 : that where official receiver reported that all debts had been cieared by the debtor, court woulci be bound under Se.ction 35 to annul adjudicatien of the debtor as Ensoly_en't-jééfaind debtor can apply fer annulment under Section*'i%Igf3(.3';):VV:e't"the'r Act and consequently, Section 37 fat/i'l'l' 'appl$i¢. V:a'llCIthvie; debts having been cleared and tViaVe::~-€:ourt"'noti. vesting ef the debtor' s propertvy'L:"'g~;ra, Official'Rec_eiV§:e'r"orV'any it ether person, it was held that 'the *p;ropei.rty and"'righ:ts of the debtor shall revert to the .rd'ebt-erreLt"ro_spect§ve effect from the date_.,ef:':fillngigiof:tljie.ln~s(;i\{eneyV: petition by the creditor. "iss'u;e.:i. notice tn the creditor therebyaiexercisiiinig'fhiisio';5'tEoon..for repurchase of the property already soitliétw VhiVr"n_ unioenegéreement of sale and thereafter __._fiied"suit foVr'rv.specft:ic performance of the agreement A'r_'relat.ing _Vto.V-reconveyance at the time when he was an u'n~discheVrge'r:l__ 'i'n'seivent and thus the entire action was _4incorn"petent';'held, by operation of Section 3? the exercise option' and ﬁiing of suit would stand revalidated ..j'.retijospectiveiy. The Hen'ble Supreme Court has also i "--«:VVVa'neiyzed the provisions of Section 37 of the Act in the said gv 4.' 2' :17":-&' .

3 : 36 : case. The learned senior ceunsei further submitted that even assuming that the transaction is not saved under Section 37 of the Act, without prejudice to arguments, the safe deed executed in respest' "

deceased Singamasetty Subbarayu~d'u"'s«. $§1ar_e" the partnership firm on 11,03.1983 by re<A;A'ei~ve.r not been set aside in M.F.A. sVi:ne"e"'t'he order has riot been set aside,' there"isihdii"sr.p'eci'fi'C'order as to what happens to the favour of the appeiiarits. The:.sai:d the teamed senior counseig'au'§3«ea'i"in.g.:fe_r--i.,.ttre_.Va_p:t>.eEia'nts submitted that Exs.P4 and P6 that there was offer and acceptance f'c:r__ tthveVV"pu'r:'craa:s'e 'of the deceased partrier's __.Share irathe book value and thereafter, the deposited and the officiai receiver, A V of the order by the fearned District uudge db. has executed the sate deed on 11.03.1983 " w--.huerefdre, the appeflants, having concluded the their favour are entitied to have the safe deed "e§<eC'uted and mere anriufment of the insofvency weuid not K 's '5 M 'i : 37 : in any way affect his rights. The iearned senier {:€}i.3i'iS€| has also relied upon the decision of the Hon' hie Supreme Court in ARGRA ENTERPRESES L"i"e., AND OTHERSWfi.}?fé;;,:""»i.r INDUBHUSHAN OBHAN AND OTHERS ((1997) ' Ceurt Cases 366), wherein the Hon' bie"Sd~prertie whats} held that once the insolvency is anntfiedi'-.andd wiped eut and the property of the.a.rt:'¥:\r7.SpIvent.. retrospectiveiy from the Vdate ofi"'tia.e_:'--VVestind a'order~,'§ but, thereby, the suit and matter are not rendered rtuéigarnd 'a:t:itotftat:i..caiiy§«xuvntiI the same declared invalid' The iearned senior cour1Se|.. that the iearned District Judge has not'a__t"avEv| material on record and has prdcgeeded toinpass an erroneous order rejecting the a;a_pE.§cat.iors eﬁeeution of the saie deed in favour of the appeiiairr-ts did not survive at aii as the safe deed has aIready"*~VbAeeri executed and in View of the submissions rrra'd:e" tiyehivrn, the questien of restitution of the appiication i:.§a.d""t;s§ the contesting respondents wouid net arise and 'r-'- "F 'I ''_i,.-1,'i§ \» ,3:

i...' : 38 : wherefore, the order passed by the learned District Judge is liabie to be set aside.

:4. The learned senior counsel appearing feijj7t_h'e_ contesting respondents siibrriitted that Section 37 has no appiication to the present case as the»..As'e.iVVe"A«ldeed dated 11.03.1983 has nothing to do i§iith:.,the "d_eél'.alratior:..ie:_ar..,it' insolvency and annulment of theforder bysui;>sequ'ent:4e.rde;r.i"

The division Bench of this Cotirt bvui'o_r;de_r2 dated«_u:1ii}:.O(~§g1983, has set aside the order pa's5§}1 on 1.iA.v§<".!_,'»vv'laich was aiiowed and has remitted the matter". to t':'riva'iV":Cetirt for fresh respondents cens'ide*rati'orrand as a Consequence of the same, LA. ><'\i'--egets the same has been rightiy ._(;ensidered' by the'i-t_riaI Court and the orders impugned in "'thesew,a:ppeeAIspassed by the iearned District Judge are jtistifie'l(:i.._~ senior counsel further submitted that it was""r'iecessar'v to sdbsequentiy set aside the saie deed :14_1.0V3'.1983 executed in favour of Aiidrn Karibasappa as theivjery erder which permitted the officiai receiver {:0 "é;i(éCisiiie the sale deed has been set aside in M.F.A. r"

\. ' > i

1. 9 r .i a .-' :39: i\le.3,G48/1983. A perusal of Exsilﬁd and ?6 and the ether material on record would clearly ShOW that there conciuded contract and in the absence of any_.--co'n'ci~i'iVjd..edi--.____"_ contract, the question of executing,pe_ny c'dn've§jan'ee'--cVir; favour of the appellants would not ari.se.;"The lealrnedsen.io'i=:;_n coiinsel has relied upon the decisic-n of thelHon*'ii:{l'eA»..Sti.pre.iheA Court in TUKARAM RAM;%AcHANwppl:e;A:_% eiuARAM BAPU LAKULE (AIR 1998 "iii.1$.';2?)'teen'd'i'V':oA:lj'setvations made in S. Rout's Comru_entary:o'n-eh? F;-QﬁJ_incialLinslolvency Act in support of his counsel further submitted. tha't.Fth5e: 'oV_.'f.:::VV'VS_ii;i'gamasetty Bhagavath Gupta was not The mother and the appellants property ef Singarnasetty _._Sdl:>bate3ruidu onV"hi.s:death, including the value of the estate V".l_v'l€3|(:j:'«..l{_v} t_l'le«.%l:>aé':nership firm and since mother was not a pai'tf.*t.o the'_"_cori§tfect and she had not been adjudged as an ~insoivuent"end"'only appeilant No.1 had been adjudged as an "_i:n,sol've_nt,V"' the execution of the conveyance dated would not be binding upon the mother and st) "«_fa"r" as mother' s share is concerned, the same would not be :40: affected by the sate deed dated 11iO3.1983 Eh favour of the appeiiaets, Therefore! the order passed by the trial Court is justified. The teamed senior coisrisei further after the armutment of the ihsohzehcy "

25.05.1977 by order dated 2o.o4_1§39ce3r~idand_ efréttdf it same in View of the order passed bgy.__t:f-2~is"Court. in 510.1048/1983, the order passe'd:"'t)y .EeaArn_ed'-iv'bistirict Judge is justified and the sarhe dcoes.nc_h--ot"'Ca1i for'i'nateri'erenc:e in this appeat, for the aipperiahtsv's-u:brn'i'tteti*--..that there was a concluded contract, whkhdtisv cVEea'rrV.frorh;Exs.P4 to P6 and the finding of _._the 1e.a.ijn'ed~ E1)istrict..V:JVV1v.'idg:e that the said document is got up V'i_and:V'c-ouricoyctedis.perverse and arbitrary and unfounded and ttie'--§a.i.d have been accepted by the parties and *other.u'partVi°iers. The order passed by the teamed District "Judge-..a.s Mable to be set aside.

: 41 : 16v Having regard ice the above said Contentions of the iearriee senior counsel appearing for the parties; i--he points that arise for our determination in this appeai are:' i. Whether the impugned oi'de§rV'--« '' » passed by the triai Court dismissing in % filed under Sections 4 and 5 of:"t'he"ProirineieAi"'i Insoivency Act, 1920, is justified' c}.'r'i<:':aiiis'~.for.:"» interference in this apiaeai

2. Whether the oiﬁer fi passed by the ';__'_'t'r_ial §Io'u.rf;. "'~--.aiiowirigit Ms.C.i\io.5/2000 fiied under 'vSreCVtiQ.r_iis« and 94 read o_f_'the Code of Civil Proeedure«is jestiifiegi"o.r:i'c»ai.i~s for interference in ti1isappea--E.V?vv V ~ A it it 3; Vord r?

:'VWe"ansWer the ébove poirits for determination as foiiows:

I-",___Poirit'Néo';~i order passed by the trial Court:

di'smissirig, is iiabie to be modiﬁed partiy as per the fina_'i~ orCi'e..i;

;L,~'v . E?

:42: Point No.2: The erder passed by the triai Court in Ms.C. Ne.5/2000 is liabie to be partiy interfered with as the fin;-3E order.

Point No.3: as per the fine! order for the ._ 1?. We have given careﬁgl'"~~..{;onsid»era'ciAo'zf; "to""th'e contentions of the iearned eozunse.l~a'pp_earE-n_g forthe parties and scrutinized the materialahorj'recdrci V"a.ppreciated the evidence agivdhucerdihefofifje t'h'e.:"triaE"_'Coé.£rt on the respective applicationsf. -- « ?_F3ae"t-:jnate'réa'I""o'n record would dearly show that thetpagjthesremp~aeet1..dated 28.86.1963 provides in ciause 9 V°*~*that on.._devo.Et3--té'o.nii;of the share of a partner, the same can ~.t.t'.j'jV»-be"-soid tdthe other partners, but, not to an outsider. T5hVer_e'Vi.s dispute that when one of the partners, Sri T.G E?-§iVth_y:é3narayana Setty retired from the firm on 31.83.1974, 9" r '15 "-.'\;,sv,') N, /,1.

g;

:43: his Share was ptsrchased by Aifem Keribaseppa, an existing partner, for book vaiue of ? 95,000/-- and the firm eggs reconstituted on G1.04.1Q"?'4 with the other partners.«V.Ihh't}Vi:e4§§ir5 3 of the constitution of the partnerehip firm "Ga\{i_si't£.oie:?}ara%ah ' and Company" and the said eiause in the»'p'a:tr:.er:s':.iTo"»d_e.eVd;" when Singamasetty Subbarayudupe. _ dée4c3..eh._2O.Q:;;39?E£, had one anna share in the partne'rs:hi»p fir;m".an"d couid be soid oniy to the the Contention of the appeétantsﬂ death of Singamasetty L' Jsingamasetty Bhagavath Guﬁta "share in the saéd partr1ershéogfirz:n andif':-e:'offetred--..to Seii the said share to the other partners';,hi;.'tV, VV"pa'i*t'he.t§;_e»e»o4ther than more Karébasapoa védéd not ..:-iceept the"'offet ahd Aiiem Karébasappa agreed to ou_Vrch:ae:e .Vthe~{ s~~hare of the deceased Sihgamasetty SL1bhat'a--yud'£rAV"a'hd"§;i'hV..support of the said contention, E><s.E34 to P6 are. tetied upon. It is dear from E><.P4 dated «Th2'Q;»03.19.7SVVthat Singamasetty Bhagwath Gupta, son of late _$£.hg"Aah'»ia'eetty Subbareyudu informed Agadé .'u"-._ 'takéhménarayana Setty; the Convehor of M,/5. :44: Gavisiddeswara and Company about the death of his father

- Singamasetty Siibbarayudu on 20.02.1975 and has statedo that he was put: to great problems and difficulties._'te.':'_hae.jVI" soived and his father had borrowed huge amodVht:'''fr.dh5§''thei " various creditors and it had become J clear the debts and his father has leftéieehind hVi»lT'E.:AE.3>f'iCi it mother and he is the only son 'fath"e.rj hielllhas decided to sell one Sri Singamasetty SubbarayuddV_ih:_i'-ti/'sf: and Company in favour""A;di'f'Vth:'eA as per the precedent and deed. Ex.P5 is the letl:ela_ dated'.j=Z:ii.Q'3i._i9«?5 3 written by Agadi Laxminarayana,_Setvty';' Coirgsvenor of M/s. Gavisiddeswara and Comhanayl to A3-turn Karibasappa intimating that himself and.' Setty were not interested in purchasing thellloneh-«ainh'a'iV"sv»h_are'of Sihgamasetty Bhagavath Gupta, son oflate §l'n.garnas.etty Subbarayadu and wherefore, he was at vvlbuy the said one ahna share offered by §ilti.ig'Aarri'a"se%:ty Bhagavath Guptai Ex.P6 is the letter dated '2:S:.'{33l.1975 written by Alldrn Karibasappa to Agadi 3, 5' \°V 2 f. . - 2 '«..'.*',>'-, ' ' L3 "as;

: 45 :

Lakshminerayaréa Setty, Convener, éntlrnating him that he was agreeable to buy one anna share of Singamasetty Bhagavath Gupta, son of late Slngarhasetty Ex.l3'"}' is the letter dated 25.03.1975 written ref; ' Karibasappa to Singarraasetty E3hagavath"'t"3uptai4' purchase his one anna share in the pa%tne«rsA'hip dfi*r;fn-.as., the book vaiue, which was as Therefore, according to the.»appell.ar1'tsVe_:heVreln, thexialdii offer and acceptance had culminéatetl 'i'n,teV::'a and there was a concluded <§Qh.traCt. ii'l;lo;§v_eveli;'r.4:§rlt:..i_$lV'th§eVV'Vcontention of the respondents not executed by Singamasettyl and they are concocted for the purpose" ofV"'t_h'i':ﬁ' »C:a'$se4Vtaking advantage of the s_ignatur.6t§§' ef~Singama:sett):/ Bhagavath Gupta taken on the rdgroudnjczthat»:in.ti--rr§'ati__on had to be sent to several authorities regaurciln-gr' of Singarnasetty Subbarayudu as partner of Gavlsiddeswara and Company.

"71"__rée material en recerd would further show that '3i.nj'r§'amasetty Bhagavath Gupta and his mother, who i, »* >-

: .. \--.

- \-=- - .2, : 45 : succeeded to the share of Singamasetty Subberayudu were unabie to pay the creditors, Insdivericy Case N032 and 3~--of 1975 were fiied on the file of the District Judge, The teamed District Judge, Beiiary, after-'..':_:'deteVVi:i'e'di it consideration of the materiai on:-"r"e'ce.rd,7__ respondente 1 and 2 in LC. Nes.2':'«Vat.--dA"i3 Singamasetty Bhagavath and Venkataramaiah and Son__had_.i"'ce.%fh~h9ri'ttediarr-A of insoivencv and accordingiy,H'de.cIa'red{"'Vt'heh*i:.aeV"'ih_so|vents by order dated Receiver, Beiiary, as of the insoivents, which inciuc§_ed--_ Bhagawath Gupta in the said Gavisiddeshwara and C,Qmpan,y_{ 'V In thearvheairzwhile, appiication -- I.A.XV was V.fi'ied.'byr.,i'rf\iEtjTn§.AKéaribasappa and M/s. Gavisiddeshwara and hy'éV"_i_ts'*icbVhvenor -- Agadi Laxminarayana Setty etating '.t'hat----V:'.ir'r""view of the conciuded contract, since Bhagaveth Gupta had been declared as "V..;in.soi{r.eht":by order of the teamed District Judge dated 2S;O6';i1977, officiai receiver may be directed to execute the .s-

L s "2.

s K53.

: 47 : sale deed in respect of one arma share of Singamasetty Subbarayodu, which was inherited by Singamasetty Bhagawath Gupta in favour of Alium Karibasappa,_y8%$0V"-t1a~d7~., deposited the book value of the said share at M The said applécation was allowed l:s\,k"A't:h'e. Q_|e--arr:edfif3iet'r-i{':t Judge, Beliary, by order dated' d.E'r_et:'tE.ng Officiai Receiver was execute a trar:--sfe'r. of late Singamasetty Subba..{ayu'.d't£" E'r1.:'t.t2uear.pAartr{er8ht;:§E firm -~ M/s. Gaviséddeswara and Céotoaarig'i%eIg%§§yI';'.:~0iofavour of the first petitioner on the first petitioner de0é08it,§'i1g:;""the: rrn;%erestt .aitme rate of 12% per armum ori~..?.95,8V()"t'1,#:'f-»:tr1ohﬁ*.;22----.G3".1975 tan 19.04.1981 and at the sam'é,_r'a::e""froméo.04.1981 on 25.05.1981 on _.--vi'f.«_E30,OVG!t)/u--v.i" As [V5ert.tt}_e'A.said order dated 04.01.1983, the V'sa|*e;"deed.V_v'i":a8%V«"'been executed by the Gfficial Receiver, Bei.!at1/;»ioV.vf'aAiJ'0:1At=.V0fSri Anum Karibasappa on 11.03.1983. against" r,.h"eV,sa'"i.d order dated 04.01.1983 aiiowing 1.A.><v, $titngna'h':.aAsetty Venkataramaiah and Son, Singamasetty Gupta and Singamasetty Govindamma filed 010.1048/1983. However, the fact: of execution of ': Q: 8 /-

. ~ t ~.,,- .2 .

:48 : the sale deed dated 11.03.1983 was net brought te the notice of this Ceurt in M.F,A, Ne.1048/1983c In view of the subsequent event that the order dated 25.oe,:e:_;7e7_ declaring Singamasetty Bhagavath Gupta and Venkataramaéah and Son as insolventswwas a{'a"a't;iv!§.é:d the he learned District Judge by order dated:=2O.O~4-e,i§4§5L he disposed of the said appeai -- M..F'.A__.. NoV."1.D48/19855A.t«i3tzv_VQrd§erVA dated 13.02.1997 and passed the i;t5iiovu.iVhg "inasmuch as the _o'rd_ei'~- :Ifﬂéd.e by the' Eearned District jueg';-e" has ai'Are_aduy' . been anntﬁléiti"maieiah-gi us'e'"o'f: the directions issued 'which were under appeai 'before becomes necessary to,-set aside the o"rde'r. made by the learned A j.udgeV"'an~d----««remit the matter for fresh » V:V"edjud_vicat«i.ofa.on this aspect of the matter, if ._ oeen to the parties to raise aii Aceinteratiioh-st' including the question as to whether an appiication of this nature is it 'reeihtiainabie or not. "

3 49 :

Thereafter', LA. XV wag heard aiong with Mac. No.5/2808; which was ﬂied by respondents 2 to 4 in I.A.XV'.g"'---._~ Singamasetty Venkataramaiah and Son, SEnga.n1J'aSg:ett3/V"'-«V. Bhagavath Gupta and S. Govindamma seeking""'.t:o -- naught the registered transfer deed event of dismissai of LA. XV.

20. Having regard to thei_a"t1ove"s'aid adr'n,itted«-..far.ts, % it is ciear that the fact that Singam:aSet'ty_v Su.b'b'arayuA_ciu died on 2o.o2.1975 leaving beh'ind.hi*s. viife"i'~:4eV:3;i1to,Govincramma and Singamasetty $hagava'th"eucceeded to the share 'of St'rigaVhaa-sgettay"iS§ib.barayudu including one anna share in M/S."G_avi,sid'd_eShwa:r_a and Company is indisputable.

_,The favc:titha't the §ai--e:d__e_ed has been executed by the official A"recei;verVv¢.her3*SVir:.g_amasetty Bhagavath Gupta was declared V as Hiri-Aswﬁoivenvt'V'i.r3:_.I}'C;£Nos.2 and 3 of 1975 on the file of the DistrictKg1u<ige',"fBeiiary, by order dated 25.Q6,,1977 is aiso vivhoit irrdispute. The fact that as per the order duly passed Athisﬂicourt on 04.01.1983 on E./1\.><V filed by Alium kgafiriibasagnpa and M/S5 Gavisiddeswara and Company, the 1 I' K 'z~,l,,:iz =

-V 33.

my :50: sate deed dated 11.93.1983 has been executed by the Qfﬁciai Receiver, Beitary, in favour of Ailum Karibasappa'~.._ipn respect of one anna share of late Singdnie:$'etet;{"2, Subbarayudu in M/S. Gavésiddeswara and Compaejz H not in dispute. Therefore, the effe;=:tm0f'the' o.;rd:ze'r'«__CiVdted 20.04.1996 annutiing the order datedA:42__5'l'O§.19?;f.'.d'ec:e.a%,.dﬁg.V'V"' Singamasetty Bhagavath Gupta a-s:VV'in,so|\t.ent.inegﬁjn"sdte deed dated 11.03.1983 e:geeute.dt5yip.h:et'*'ae§feeae':'Receiver in favour of Alien: Karibasdnphd' when Singamasetty adjudged as insolvent as {Setj:-thee".5-r'de2<ie'j'.--of"»theV"€ea--kned District Judge dated 25_V'(:)'5,197.7;"Vva4;~hi;L¢thT»"'Wes-.._later annutied by the Déstréct Judge by order" has to be considered.

__.jrhe Court whiie interpreting the i"eLe'cti_Qn 37 of the Provisionai Insoivency Act, V 19M;:eAV"ad'e'Ae'1'3j.ﬁg$.tM# ALIAS DURGA PRAsAn Vs. INDRA PAL : s:Ne§§%'%"(ne.A D;"%VMev Lest, ((1998) 6 sec 358) has laid down ' a.:s.uxr1'd*e¢r: --

:51:

" 26. Inasmuch as suimclause (1) of Section 43 requires the court to appiy Section'4.._:*- 37 of the Act in the event of passing an of anriuiment, it is next necessary to refe';=':_:to.:Vie..:

that section. Sub--cIause (1).of..Sect'io'nv"'"$'f; ' states that where an adjudication Z-i~scAo.an4nt;.ii-ed',it ali sales and dispositions of 4';:roperty?e'.ane" "

payments made, and alf actetheretofore..Ac1ene%:""

by the court or Reg_:eiver,AV_shxail._bwe vaiid;._bHutV,7 subject as aforesaid,.._f'r,eAp'_ro;§_erty.__of'the debtor wine is adjudged ihstoh/e_nt'."'shVa|i.=.\}ee;~in such persons or, in default of :"a4ny;I:S';.:c'h_'a_t)i§3Qintraeentéishaii revert to the at¢bs¢;%t¢e 'th:§I_e:>t:<t:'e'.it his right or interest cohnvditions (if any) as the court writing, declare.

it rxxx "

it -- may here aiso refer to two other cases.RatnaveEu Chettiar V. Franciscu V 'Uda'--?ya'r"'Somayya, J. pointed out that it was .. _cIear7' that the Iegisiature wanted the it '._a:"nnu|ment to be retrospective. Otherwise, there was no need for the ciausewvaiidating acts done by the Court or by the Receiver, as :52: they wouid have in any event been valid because they were done at a time when the insolvent had been adjudicated and before the it adjudication was annulied.

XXX

35. Sumrnarising the -legaiV'po's'ition,,t§*zeii' 1 position is as foilows. In"t4i.VVtt:.e case__of."l=an".; annulment under Section 3,Z?"'r'eé_1d 'With Se'cti--on./1 43 of the Act, where "the.pro_perty"'iéi,"'71'§iit--,,vested in any other ,_person... 'n.o:.»yc<'$'ndit~i~o_ns are imposed by;"t'i"i'??..:insoiivepcy Coti"rt;-thefproperty and rights' of,th'e'_i__insoyi.ye~ntrestored or revertedv 'to:i.5hVim.»i:Ai;ir'ithiietrospiewétive effect from the date of thVe~:fi'!.in'g,i'oﬂthe insoivency petition and the*i_n%so|vV"enoy wiped out altogether. Aligjiacts dorieuby the undischarged insoivent . _b'etw5e'en"i'the diayteivof the insoivency petition ' éi_r'a'd :,d~a:te~.of annuirnent get retrospectiveiy 'K/'ati'idé1te'(i:.. "However, ail sales and dispositions of pro:peir'ty and payments duiy made and aii AA acts ttierefore cione by the court or Receiver, V' .V_\»x}'i*i_l remain vaiid.

V':

:53:

The Hon' ble Supreme Court in ARGRA ENTERPRISES £33., AND £)THER$ Vs. INDUBHUSHAN CBBHAN AND C)THE"R_S ((1997) 5 Supreme Court Cases 366), has laid 10 of the said judgement as foliows:-r ":10. Though the arguments ad<'§ress_e'cE be'f'elre., a, V' us covered a wide range,V»w:Ve~r..are of that it is unnecessary to pi"Ol"l4'l:)VVb'.l':}'C*I-.E_»ii"3 on V} the various aspects' i4_nv.olvied fl._ne_n'mattervlietivv this stage. Suffice the preponderance:'o.f_ juqlielai' eoipiriiroimis WE'-nvfévour of the vievv. i:.hat3: '1__-the it .grre{£;t Vflalniriijllling the adjud'iC'atioA:ri;» in;'f%;rieo'lven'cv"proceedings, is to wipegout' the'effectféofii'i'n.soEvenc:y and to vest the property' 'r.etrwospe'ct'ive|v in the insolvent.

The conéseqiuenhciei'ofi""annu|ling an order of A =aidij~ud..i:catioh AA'i$,.,..gg«'wipe out altogether the A' if'i~»nVsoi.venc:v°*a_nd its effect. The property will _ "refire'st:"'i_e2__th'e~'i'nsolvent retrospectéveiy from the Ad..cfal:ev_.taf'_tl..ie vesting order. We hold that the law fairly clear to the above extent. But, A if 'this does not soive the problem arising in this ""..VV'Case. The effect of the suit (independently) filed by the appeilants and the erciers passed 1 R,' 39;' :54: therein have to he considered. That is a distinct and different matter, which has its own existence and iegai impact, unimpaired by the annulment of the insoivency. In other word_s'_;"" 9 by the annuiment of the insoivency and wipiphgp in out its effect retroactively, in la:';rv'Althe.sii.i't f the judicial orders passed the'trle0:i.'A:i"éireii'~.f?Ao€--' wiped out, or rendered7v'o..i_d or~,_a nuiiity.;v.._V_ aiitomaticaily. The order paisseti in the._s'i:it-I is)' not non est or ineffective. git iai'd"'gy.»v' the appellants (Suit he:'if3'3_of:}1§'8.9).,;l"araying for declaration. vthatinthe fagrepeprnenhtvédpgetiween the appeiia__ht's;,a'nd. "-.I'ni;i_u'ij:hii'sha:r§' = dated 9--5~ 1988 is ti}aViir:i"'*a$ridi'vstJbsiijsti'i:g;:'p_thatthe property shou'dldimi'b'eA~i{5prop:'eVrlﬁl:"»partIti1on'eVd and that a decree may be~:p'a.ssedr'i.__a"g_airist Indubhushan -- the firstidefenciaritiotpiirecovery of a sum of Rs. 7_jai<hs etc;-» o_ri"the'dernise of Indubhushan on ' 'v2Q'L4%"1989, thevapipellants took out chamber '$um'mpoins. "769 of1989 in the Suit (No. 133 "T;;."i'."he court rejected the chamber s~:_.imrnons?' by a composite order on two differeint and distinct points --~ (1) the iVVia'greement dated 9454988 entered between 7-Vithe appeliants and Indubhiishara is void and iunenferceabie and so, the suit is not :55: maintatnablez (2) the ameradments sought by the appeilants to imptead Sefendents 1 (a) to 1(d) as Respondents 1 to 4 in place at deceased Defendant 1 and to add the offici_ai"--i' H' 'V assignee as a party defendant, wesief'-'A disaltowed. The legal effect of the"'se.i.d ofde;;4"i's--T/4 t that Suit No. 133 of 1989 stood 'aba:i;ed-5a9'a.E'r1~st'' ' the legal heirs of the ,__.fia'st"'._vd'efendan't,ii 1 Indubhushan and the o.<alle: pas':=._eVd»_"'.on"1,:

2~2~199O reached fir=.--aiity. _,§t-- so.ha-p.pened~,...a5..v° a result of the judiei-aiT.oi-deij';pa'ss'eti*.by the court in a pro_c_:eeding._.t§'et.we_en_ t¥=i'eVlpa;ft§.;2s to this proceer:Ei'ne':eI'as This order is;'\)ai"t_dV1uvi1'1tii.'set__"asid--e"«'o:ﬂ_annulted, in Itieainnot be ignored.

It will 'h'_av'e: of its own, until appropriate are taken to establish its; in»ralidity'=a1_;7'd"to 'Vget it annulled by a person . A entities' f1:=..'avoio"VVif}"'The said order stands even ' {'gV(§ag,v..;;"ii£j"ha's;---.not been set aside. So long as H saiwitijgordyer stands, the abatement of the suit .-.j'has"° become unassaiiable in these A proCeedings."

:36: When the principles laid down by the i~ion'bie Supreme Ceurt: in the above referred cases are appiied to the said undisputed facts of the case, it is clear that _ the learned District Judge dated hisii"

earlier order dated 25.06.1977 Bhagavath Gupta and Singamase-ttty \}eni'<atarant§a;ia.h" ailidiyi Son as insoivents and the order__4_i:o:as'sed Ctaurt in M.F.A. No.1048/1983, vvh'etein'A--_th%e the learned District Judge passed __on pursuant to which, the executed by the Official...Recei:veit:;;::'in" Karibasappa, has been setiiasicie,x.vv'oii'i-dig'not=i.in"-~ai'iv way affect the sale deed dated 11.03.1983' by the Officiai Receiver in ~favouvr'o.f Aiiurn K.a"r-ibasappa as the said conveyance is saved V"a__s' pier,Vthe'«.p'ri,An'cipies laid down by the Hon'ble Supreme Coii'rt."a~s above. The learned District: }udge has 'pVrocee'ded"V.on" the basis that Exs.P4 to P7 are concocted and "fa»t3Arica.tedi" The said finding is based upon surrnises and V.___"5::o'n_§e'ctures as it is clear from the order ggiassed by the '4"'iI.risdivency Court that after the declaration of insolvency by

-

c,.- 3 (.5 :5)":

the Di8ti"i{?t msdge, Beiiarv, in LC. N082 and 3 of 19% dated 25.06.1973 aii the assets of the inselvents vested Official Receiver and the saie deed, which has been :1.03,1983 has not been chaiiehged her set aside by-.th'e,Verd:er._e? "

the Ceurt and only because of the amiei;ntb_Adejpo:gité:'d"ered':t_e%s.,_:' couid be discharged and order Of>,'i"iSO|\»'€'¥'i~€:v"{TOL§§C§7Yb-S. Taf'{1i.1L%§i:i3C.iu'i and new it is not oben to contend tha't..:sa.ie deed.:s"vdi-d. view of the above said finding on" the facts jth"eg_<;ase',A 'thedecision relied upon by the learned Coiunsei respondents is not heipfui to thepresent 'the ':;'iV'u'vestion that is to be considered deed would be binding in respeeiziz,:of5'1:'h_e_ eittesntdof one anna share of Singamasetty '' partnership firm -- M/s.

Gavisid d eswaira and oni ya it 2:5' " It is ciearrfromn E><s.P4 to P"? as referred to above 'that"a.d«rn'itted'iy, fS'in_gamasetty Subbarayudu was having one anna shape in iVi,'.s;'~..Gaviisiddeswara and Company and he died on ii"""V'v2G.G2.i~3.}7S _.iea'_vji..nci¢i behind his wife - Govindamma and

-.f'fjv»~Sing.amasetity__AA3~Bhagavath Gupta as his iegai representatives. *i7he}3ef<3_re';'A_« Govindamrna and Singamasetty Bhagavath Gupta ' .ha've inherited half anna share each.

:58: Govihdemma, wife of late Sihgamesetty Subbarayudu erad mother of Sihgemasetty Elhagavath Gupta hae never m:a*de any correspondence nor offered to sell the share:.~«§~nh'erl'§:ejo':"

by her in the one anna share of her ho_swbe"rz--d partnership firm -- M/s. Gavisiddeswera the other hand, the material on' record"'lwouIg;',."_r§l50vQ though she was made party ealri-ieI'f_"'olrotieedings including LC. Nos.2 and Slivralihgalhwasetty Bhagvath Gupta ahd M/sV._HV:$'i_hoeo"§:es-etto-l.I'V_'gl_e'l1kataramaiah and Son, who?" and not Singamasetty:Qfolgihdamrnei';hr'.'iV'hThevre is ho material on record to show that Sihvgua;'p_ve'sett*y:::'GovEhdamma had consented to sell her share4__ar|ono' lhnﬁtth»S£'r}oelmasetty Bhagavath Gupta in

4...rffavour4.l:§l'*'V p=artneursV._,of the Firm -- M/s. Gavislddeswara and material on record would show that Silhgeillnrasvetty-__fitiilﬁindamma had filed objections by ~t:ohteh'dl.n§1:'V.the;t she had not expressed her willingness to the share inherited by her. Since Singamasetty

-ﬁhiegexreth Gupta and Singamasetty Govindamma have "--«:VVsLlr:'ceeded to the estate of Singamasetty Sebbarayudu :59: inciuciing one anna share in partnership firm -- M/s. Gavisiddeshwara and Company as class; I heirs in equal proportion i.e., half anria share each in the absence-«joft:'a--ny*.,A material whatsoever or: record to Show that Sin'cj'an":a's'etty""--'-ii* Govindarnrna, the mother of Singamasettyy 'Guerra it had consented to seil the share of her _i:'r'r..trref partnership firm in favour of trek'-'v--:.c:'L"o.therAhpartneyreyi eiear that the saie deed torrid .'n'otvv.ha.vEe been executed in favour of respect of the entire extent yyofl" one iisingamasetty Subbarayudn Company. The sale deed' ' executed by the Officiai Receiver in t'ayor_rr of 'ﬁxrliyiu»rn""..K4aVribasappa, though saved by 4__rhe pr.0_%visions of"Section:37 of the Provinciai Insolvency Act has. referred..to:'a.bove,m the same wouid be binding only in re'spe'hct;oVf" anna share of Singamasetty Bhagavath

--t'3upta°'as the"other haif anna share in WS. Gavisiddeshwara and' Comoany was inherited by his mother ---- Sirrgamasetty

-..h(-':o'vVin'd'arr3n'ra, who has never consented nor expressed her "--«:Vyr'iii'ihngness to seii her share in favour of the other partners er;

'2 =. :7 33% §"2.'i?_n'?.e'/ E} :63: and preposai to sell the share in favour of Aiium Karibasappa made by Singamasetty Bhagavath GE.E§)tav_'i?i':'~§S not made on behalf of his mother --~--

Govindamnia. The materiai on record wouid $Viiow: tnatyyfsiraie' has objected to the offer made by ijerhsiion .v-42Si~nga_'rriasvetty Bnagavatb Gupta regarding sel,ii_ng of..Ao'n_e anTnaAA:S'hare=.:.o'fiV"

Singamasetty Subbarayiidu and exgressed to sell her share. "i"'ii'erefo«rbe",'V_'Vi»vti§eVV--»»"i'saleiédyeiedvvé dated 11.03.1983 in so far share of Singamasetty Siubjtijiaiayuidu M/Aer'--1_'G.a.yié}iddesnwara and Company in€._fay44o;.rr'.""'bfjﬂivitini.':,i~i{a.§'ibasapba cannot be sustainedﬁanrj'thVe"uoa~i.d"saEe_::d'e_ed is to be held to have been conveyed aimj saved 'é;nii),qA'A§'ifi respect of baif anna share of 4_..VSingami{asuetty BhVagi.aiv:atbA:Gupta and woufd not be binding in A";r_eap:ectV 'Ah%aljf"~anna share, which has been inherited by Singa'i.nasVetty'»«__(3t§vindamma and to that extent, the order passed' Efffitizeiiiitriai Court is to be modified by hoiding that iinjecessaryyiideed of canceiiation of the said saie deed dated 1";Q3'.i983 in so far as it reiates to conveyance of half anna 'tabaire, to which 5. Govindamrna (petitioner No.3 in Ms.C. ;

:61: 519.5/200$), has succeeded after the death of her husband --« Singarnasetty Stibbarayudu. The order passed by___'_the Additionai District Judge, Beilary, dismissing LA. aiiowing LA. V in its entirety is liable to be accordingly, we answer the points .fdr..detei?m'iiiatZidn" and it pass the foliowing Oi'der:~« Both the appeaIs,..--~ 'i\i»ds.287'3,/.2054 and 2'.7G6/2004 are aliowed .'VOei§_de:r'»»passed by the Additional i:>istriei{" .._3_udg"é,""'i*éiei_ia«i€$i'--,.V. deed 16.02.2004 dismissing 1.!-:.\.."' aliowing iVis.C. No.5/20011 ii} its.Ve'ntijret'y_iS~§:e»t._asi-de. It is ordered that both the appiicati'on__s*--~_ C. No.5/2000 are ailowed __in part.._§g 'ini.viewV"d€_.i3VVur finding that the saie deed executed Vbyi ti'ie:OfficAia§--.éﬁeceiver dated 11.03.2003 in favour oi Aiium Ka'.ri.i:iéi-sa;:ivijdR_"_v»{_oiiiigivnai petitioner No.1 in I./ii. xv in EC. No.2/i4975----;i«. "efvaiid and binding only to the extent or half heid by Singamasetty Bhagavath Gupta, to he has succeeded after the death of his father ~« "--«:Si'ntjamasetty Stibbaraytidu and the Officiai Receiver shall ie',.,.77'> ':".-«ft e -2 ti

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