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1951 DIGILAW 61 (MAD)

Mathurai Sadhu Seva Samajam by its Secretary N. A. Nannier v. The Official Assignee of Madras representing the estate of M. K. Balakrishnier and Sons.

1951-02-11

P.V.RAJAMANNAR, PANCHAPAKESA AYYAR

body1951
The Chief Justice.-The Madurai Sadhu Seva Samajam, a Society registered under the Societies Registration Act, XXI of 1860, which is the appellant before us filed an application in the insolvency of M.K. Balakrishnier and Sons claiming a preferential payment of a sum of Rs. 8,056-1-0 being the amount due for principal and interest in respect of a sum of Rs. 7,000 deposited with the insolvent firm on 29th July, 1946. The society was certainly a charitable institution, but the learned Judge held that even assuming that the insolvent firm knew of the objects of the society and that the funds were in the nature of the trust funds, that would not be sufficient to create a deposit on trust which will entitle payment in priority over other creditors. He held that there was nothing to show that the insolvent firm received this deposit or held it on trust for the society. He therefore dismissed the application. It is not contended that on the facts as placed before him, the learned Judge erred in dismissing the application. But an application has been made to us to admit certain documents as additional evidence and it is contended that if such evidence is admitted, the society would be entitled to the relief for which they prayed in their application. The documents are intended to show that the insolvent firm was a member of the society. The argument is that if the firm was a member of the society, it must be deemed to be in law a trustee in respect of the amounts invested with the firm. Assuming that the insolvent firm was a member of the society, we fail to see how that fact by itself makes the firm a trustee. The society is a corporate body with a separate juristic personality which is distinct and separate from that of its members. The moneys and property belonging to the society are vested either in the trustees, if any, duly appointed under the provisions of the Act, or, in the absence of trustees, in the governing body. It is admitted that the insolvent firm was not a member of the governing body; nor was it one of the trustees under the Act. The moneys and property belonging to the society are vested either in the trustees, if any, duly appointed under the provisions of the Act, or, in the absence of trustees, in the governing body. It is admitted that the insolvent firm was not a member of the governing body; nor was it one of the trustees under the Act. It cannot therefore be said that the insolvent firm which at best was an ordinary member of the society was by reason of such membership in the position of a trustee in respect of moneys belonging to the society as such. Here was a plain case of an investment of moneys belonging to the society by the society with the insolvent firm which happened to be also a member of the society. In this view, as the appellant is not likely to succeed in establishing his claim, even after admission of the documents sought to be admitted, we think we should not admit them. The application (C.M.P.No. 776 of 1951) is therefore dismissed. The appeal also fails and is dismissed with costs. V.S. ----- Appeal and petition dismissed.