T. Venkatadri, JJ. N. Vaithilingam Chettiar v. S. N. Lakshmana Nadar
1964-04-15
S.RAMACHANDRA.IYER
body1964
DigiLaw.ai
S. Ramachandra Iyer, C.J.:- This appeal has been filed against the judgment of Kunhamed Kutti, J., on the strength of a certificate issued under clause 15 of the Letters Patent. The appeal arises out of a suit instituted to set aside a summary order in proceedings relating to the delivery of possession of property sold by an Official Receiver. The property in question is a house in Nagapattinam. It was purchased in the year 1910 by Muthukumaraswami Chettiar who died eight years later, leaving behind him two sons, Vaithilingam (the appellant) and Ramalinga. The former was employed in the railway and his duties compelled him to live in different places. His brother Ramalinga, who was a stamp-vendor, was in actual occupation of the house. In the year 1948 he was adjudicated an insolvant on his own petition. The Official Receiver of East Tanjore conveyed on 12th December 1952, the right, title and interest of the insolvant in the house to the respondent It appears that even earlier the Official Receiver had taken possession of the entire house. The purchaser had therefore no difficulty in obtaining an attornment from the tenants, Vaithilingam, coming to know of this, applied to the Insolvency Court under Order XXI, rule 100 of the Code of Civil Procedure, for re-delivery of the property to him ; but his application was dismissed. He then instituted the present action, purporting to do so under Order XXI, rule 103 of the Code of Civil Procedure, to set aside the summary Order, or in the alternative, for partition and separate possession of his half share in the house. Both the trial Court as well as the Court of Appeal accepted his case, for partition holding that what the respondent secured under the sale by the Official Receiver was only a half share which the insolvent possessed. A decree for partition and separate possession of a half share in the house was granted in favour of the appellant. On Second Appeal by the respondent, Kunhamed Kutti, J., set aside that decree on the ground that inasmuch as the order of the Insolvency Court on the re-delivery application filed by the appellant had become final, there having been no appeal as provided for in section 75 of the Provincial Insolvency Act (hereinafter, referred to as the Act), the present suit should be held to be barred by res judicata.
Before proceeding to consider the correctness of that view, we may point out that what the appellant sought and what was negatived in the application for redelivery was possession of the entire house. We do not see, how, even assuming that there was a final adjudication against the appellant of his right to possession of the entire house, his claim for partition and separate possession of a half share therein could be held to be barred by res judicata. It is, however, unnecessary to pursue that point, as we are not prepared to share the view taken by the learned Judge as to the effect of the order of the Insolvency Court on the application for re-delivery of possession. In Sinna Subba Goundan v. Rangai Goundan1, Chandrasekhara Aivar, J., held that in a case where the Insolvency Court gave a final decision on a question of title, a mere direction by that Court super-added to that decision that another proceeding could be taken for finally adjudicating the title would not make the adjudication any-the-less binding on the parties. Kunhamed Kutti, J., has relied on this decision to support his view that the dismissal of the appellant’s application for re-delivery by the Insolvency Court would have the effect of finally negativing his right to the suit property. Let us first look into the facts of that case. On the insolvency of a Hindu father, his properties were sold by the Official Receiver. The purchaser was obstructed by the sons of the insolvent when he went to take delivery of possession of the properties. The Insolvency Court ordered the removal of the obstruction, after deciding that the property sold constituted the self-acquired property of the father and that the sons had no right thereto. The order, though it was purported to be made on an application under section 5 of the Act, was however taken up in appeal. There the conclusions of the first Court was affirmed. Appellate Judge, however, added a rider, “..........if the appellants have got any case they may file a suit.” This appellate order was confirmed on Revision by this Court. Subsequently the sons put forward their title in a second litigation.
There the conclusions of the first Court was affirmed. Appellate Judge, however, added a rider, “..........if the appellants have got any case they may file a suit.” This appellate order was confirmed on Revision by this Court. Subsequently the sons put forward their title in a second litigation. Chandrasekhara Aiyar, J., held that, in substance, the decision of the Insolvency Court as well as the Appellate and Revisional Courts must be held to be one under section 4 of the Act notwithstanding the fact that in the judgment on appeal liberty was given to the appellants to establish their title in a separate suit. The adjudication in the former case was held to be final and operative as res judicata. In that case, therefore, there was, in substance, an adjudication of the title of the insolvent as against his sons and it was held that the mere fact that the petition was filed under a wrong provision of law would not alter the real character of the adjudication, which should be held to be one under section 4 of the Act nor would the liberty clause affect its conclusiveness. The learned Judge observed: “It is true that the Court thought that a separate suit would lie and this question of title may be agitated fully there; but this opinion expressed by the Insolvency Court cannot affect the rights of parties.” This is but an enunciation of the well-settled rule that a Court, while finally adjudicating upon a matter which was properly before it, cannot, at the same time, provide the disappointed party liberty to file a fresh suit; to recognise a contrary rule will be destructive of the principle of finality of judicial order. Similarly, it has been held by this Court in more than one decision that a Court cannot dismiss a suit and at the same time grant the plaintiff, liberty to bring a fresh suit on the same cause of action. But this principle cannot apply to a case where there is no final decision. For there can be no res judicata unless the matter had been finally decided. When, therefore, a Court states that it has not finally decided a matter, it will be a misnomer to call it a final decision and then apply the rule of res judicata. This was recognised in Parsotam Gir v. Narbada Gir1.
For there can be no res judicata unless the matter had been finally decided. When, therefore, a Court states that it has not finally decided a matter, it will be a misnomer to call it a final decision and then apply the rule of res judicata. This was recognised in Parsotam Gir v. Narbada Gir1. In that case, in a former suit between the same parties regarding the claim upon title, which was made in a latter suit, there was a decree dismissing the suit ; but the judgment stated that it was left open to the plaintiff to sue again and that no matters affecting the rights of parties could be held to be decided between them. That judgment was pleaded in bar to the subsequent suit. The Privy Council, while pointing out the essential requirements to sustain the plea of res judicata observed: “It would be a contradiction in terms to say that the Court had finally decided matters which is expressly left untouched and undecided.” The decision in the previous case therefore was not regarded as a final decision and the plea of res judicata was over-ruled. In the present case what the Insolvency Court purported to decide in the application for re-delivery filed by the appellant was, whether re-delivery should be ordered. It purported to do so only under Order 21, rule 100. It did not decide the question of title finally. The Court never proceeded to consider the question of the appellant’s rights to possession even as it was not concerned with that question in the summary proceedings. Therefore, such an order can never be regarded, as either actually or constructively, amounting to a final adjudication of the matter before the Court. We are unable to accept the contention that inasmuch as the provisions of Order XXI, of the Code of Civil Procedure will not apply to a sale by Official Receiver, every application filed by the purchaser for obtaining delivery (or by the person in possession for obtaining re-delivery), should only be regarded as an application under section 4 of the Act, an adjudication in which would be final and, therefore, not open to be challenged by a suit under Order XXI, rule 103 of the Code of Civil Procedure.
It is true that section 4 clothes the Insolvency Court with a power to investigate questions of title and the adjudication in those proceedings would, subject to the provisions as to appeals etc., contained in the Act, be final between the parties. But that cannot mean that every order passed by the Insolvency Court would attract the provisions of section 4 of the Act. Section 5 of the Act states that the Insolvency Court shall have the same powers and shall follow the same procedure as it follows in the exercise of its original civil jurisdiction. It is obvious that where the Insolvency Court does not purport to decide a matter under section 4, but proceeds only under section 5 the rules prescribed by the Code of Civil Procedure would apply to its decision. In other words, it would be competent for it to entertain an application under Order XXI, rule 100 of the Code of Civil Procedure and any order passed therein should by virtue of that statute be subject to the result of a suit under rule 103. It has no doubt been broadly stated in some decisions that Order XXI of the Code of Civil Procedure will not apply to sales by an Official Receiver. But that does not mean that after a sale has been made by the Official Receiver proceedings cannot be taken for effecting delivery of possession etc., through the Insolvency Courts under rules 95 to 102 of Order XXI. Indeed it has been authoritatively laid down that that if a purchaser is resisted in obtaining possession, the above-mentioned provisions would apply by reason of section 5 of the Act. In Ramaswami Chettiar v. Ramaswami Iyengar1, a Bench of this Court took the view that the Court of Insolvency could inquire into disputed title and order delivery of an insolvent’s property to a purchaser from the Official Receiver, removing the obstruction of a third party. Thus the jurisdiction to inquire into disputed title will arise by virtue of section 4 of the Act. Once the Court is held to have jurisdiction to adjudicate upon title, it must be conceded that there should be a further power in it to give effect to such adjudication. It is for the latter purpose that section 5 of the Act arms the Court with all the powers of a civil Court.
Once the Court is held to have jurisdiction to adjudicate upon title, it must be conceded that there should be a further power in it to give effect to such adjudication. It is for the latter purpose that section 5 of the Act arms the Court with all the powers of a civil Court. In the case cited above, it was observed that if an order for a warrant of possession was made in favour of the Official Receiver or a purchaser from him, the method of executing the warrant under Section 5 of the Act will be the same as that prescribed for execution of a warrant issued by a civil Court. It will therefore, follow that the procedure prescribed by Order XXI, rules 95 to 103 of the Code of Civil Procedure can be invoked, in appropriate cases, by the Insolvency Court. Consequently, if an order is made under any one of those provisions, it should be competent to the aggrieved party to file a suit under Order XXI, rules 103, because the very terms of the provisions relating to passing summary order prescribe that such orders will be subject to the result of the suit. A different note from the one expressed in Ramaswamy Chettiar v. Ramaswami Iyengar1, was a struck in Venkataram v. Chokkier2, where it was held that the Official Receiver would not be entitled to apply for delivery of possession of property. But a subsequent Full Bench decision has corrected that view. In Vandarguzhal Achi v. South India Corporation3, the Full Bench preferred to follow the view in Ramaswami Chettiar v Ramaswami Iyengar1, to the one expressed in the later case, observing that sections 4, 5 and 56 of the Act being wide in their import, would empower the Court to give possession to the purchaser of the property sold in insolvency proceedings, at the instance of the Official Receiver. The jurisdiction conferred by sections 4 and 5 are distinct, the former provision will apply where the Court purports to adjudicate finally the title of a person, and the latter provision arms the Court with certain powers. When, therefore, the Court merely assumes the powers conferred on it under section 5, it cannot be said that it has proceeded to decide the dispute finally under section 4.
When, therefore, the Court merely assumes the powers conferred on it under section 5, it cannot be said that it has proceeded to decide the dispute finally under section 4. In every case therefore it has to be seen whether there was an adjudication within the provisions of section 4, or, whether there was merely a summary order passed under any of the powers vested in the Insolvency Court by virtue of section 5 of the Act Mr V. S. Ramakrishnan has referred us to certain decisions where orders of a Court were held to be not appealable. In Deoshan Marsingji v. Shake1, a sale held by the Official Receiver under the directions of Court was held to be not an act of the Receiver so as to confer on the party a right of appeal under Section 68 of the Act. Again, in Nathuram v. Madan Gopal2, an attachment of property effected by an order of the Insolvency Court was held not to amount to a decision within the meaning of section 68 of the Act, so as to be capable of an appeal. These decisions, in our opinion, which turned on the question whether a particular order was that of the Court or merely an act of the Official Receiver have no bearing upon the question to be decided in the present case. In Pandu v. Woman3, there was an adjudication under section 4 of the Act and the Court directed the objector to deliver possession under section 56 (3). The Court observed that section 5 would not apply to cases where there is an order under section 56 (3). That proceeds on the well-known principle that where there is a specific provision in the Act itself for executing the order of the Insolvency Court, like the one contained in section 56 (3), there will be no need for the exercise of the powers of the civil Court under section 5, it was consequently held that the procedure prescribed by the Code of Civil Procedure would not apply to such proceedings. But it is obvious that where there is no such special procedure prescribed under the Provincial Insolvency Act, that Court can invoke its powers under the Code of Civil Procedure. There is ample authority for this.
But it is obvious that where there is no such special procedure prescribed under the Provincial Insolvency Act, that Court can invoke its powers under the Code of Civil Procedure. There is ample authority for this. By way of example we may refer to Ramnad District Central Co-operative Bank v. Official Receiver of Ramnad4, where it was recognised that the Insolvency Court has the same powers as a civil Court under section 5 of the Act; it would be competent for it therefore to grant an injunction in appropriate and justifiable cases. It would follow from what we have said above, that where there has been an adjudication of title under section 4 of the Act, the order of the Insolvency Court would be final and operate as res judicata in any subsequent dispute between the same parties. But it is not obligatory on the Insolvency Court to decide disputed questions of title, always. For example it will be open to it, in appropriate cases, to refer the parties to a separate suit, or it may pass such orders as it may like for the moment, taking advantage of the powers conferred on it under section 5 of the Act. If the latter course were to be adopted, its orders would be liable to be challenged by proceedings in the manner permitted by the statute. The question in every case will therefore ultimately resolve into this, namely, whether there has been an adjudication, in substance, by the Insolvency Court as regards the title of the rival claimants. In the determination of that question, the Court will not be influenced by the caption put upon the order. The substance has got to be looked into. Coming to the present case, it is evident that the Insolvency Court did not purport to decide the title between the appellant and the respondent. It declined to grant the appellant re-delivery of possession under its summary powers. That order cannot be deemed to negative the title of the appellant to the property. What the Court was then concerned was only as to who was in possession at the date of delivery thereof. The suit by the appellant for partition and separate possession of his half share would, therefore, be maintainable. The appeal, therefore, succeeds and is allowed with coss. K.L.B. --------- Appeal allowed.