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Andhra High Court · body

2009 DIGILAW 427 (AP)

Poluru Venkata Ratnam v. Mandava Venkateswara Rao

2009-07-06

L.NARASIMHA REDDY

body2009
Judgment :- The petitioner, who is a creditor, filed I.P.No.56 of 2006 against respondents 2 to 4 in the Court of II Additional Senior Civil Judge, Vijayawada under the provisions of the Provincial Insolvency Act (for short 'the Act'). During the course of proceedings, an item of immovable property owned by respondents 2 to 4 was attached and the official receiver, 5th respondent herein was entrusted with the administration of the property. In pursuance of the orders passed by the Court, the item of property was brought to sale on 14.02.2008 and the 1st respondent emerged as the highest bidder for Rs.10,02,000/-. The amount was deposited and sale deed was executed on 19.04.2008. The petitioner filed I.A.No.673 of 2008 with a prayer to set aside the sale and refund the amount, on the ground that the property was already sold by respondents 2 to 4, much before the I.P. came to be filed. The 1st respondent filed I.A.No.1099 of 2008 under Order 1 Rule 10 C.P.C. with a prayer to add him as a party to I.A.No.673 of 2008. The petitioner opposed the application both as to maintainability, and on merits. Through its order, dated 29.12.2008, the trial Court allowed the I.A. Hence, this civil revision petition. Sri A.P. Venugopal, learned counsel for the petitioner submits that the 1st respondent is already pursuing the remedy under Section 68 of the Act by filing I.A.No.674 of 2008 and either by direct operation or by implication, Section 5 of the Act excludes applicability of Order I Rule 10 C.P.C. to the proceedings. He contends that having regard to the scheme of the Act, Order I Rule 10 C.P.C. has no application, particularly for the situation mentioned above. He places reliance upon the judgment of Madras High Court in M.A.Jaleel Sahib vs. N.S.Srinivasan (AIR (38) 1951 MADRAS 665) and this Court in P.Gokari Sab vs. D.Sriramulu (1966(1) An.W.R. 177). Sri Ramatheertha, learned counsel for the 1st respondent contends that since there is no provision under the Act to enable a third party to get impleaded in the proceedings under the Act, Rule 10 of Order I C.P.C. is very much applicable. He submits that in an application filed for withdrawal of money deposited by the 1st respondent, he is a necessary party. He submits that in an application filed for withdrawal of money deposited by the 1st respondent, he is a necessary party. The 1st respondent is not a party to the I.P. He came into picture only as a highest bidder and on execution of sale deed in his favour. Pointing out certain facts and circumstances, he filed I.A.No.674 of 2008 under Section 68 of the Act with a prayer to set aside the sale, and for refund of the amount. It was urged that the insolvent sold the property before the proceedings were initiated. In the meanwhile, the petitioner filed I.A.No.673 of 2008 for withdrawal of the very amount that was deposited by the 1st respondent. On merits, several objections were raised as to the filing of the application by the 1st respondent. It is urged that the sale notice itself mentioned that highest bidder has to take steps for recovery of possession and that the official receiver would not be under obligation to do anything in this regard. Even assuming that the stipulations in the notification may be cited against the 1st respondent, it is too early to predict the outcome of that application. The immediate concern of the 1st respondent is to ensure that the amount deposited by him is not withdrawn by the petitioner, or any other creditor. It is true that Section 5 of the Act attaches precedence to the provisions of that Act in the matter of procedure that guides the proceedings under the Act. In other words, it excludes the application of the provisions of C.P.C to the extent the Act provides for any contingency. In the judgments relied upon by the learned counsel for the petitioner, the Madras High Court as well as this Court took the view that Order I Rule 10 C.P.C. cannot be invoked, in case the situation is already covered by the Act. In M.A.Jaleel Sahib's case (1 supra) the Madras High Court pointed out that Section 16 of the Act deals with the situation for transposition of creditors as petitioners and in that view of the matter, the application of Order I Rule 10 C.P.C. stands excluded. So is the case of the judgment of this Court in P.Gokari Sab's case (2 supra). So is the case of the judgment of this Court in P.Gokari Sab's case (2 supra). In the instant case, the petitioner is not able to cite any provision, through which the 1st respondent could have got himself added as a party to I.A.No.673 of 2008. The effort of the 1st respondent to ensure that the amount is not withdrawn at least till I.A.No.674 of 2008 filed by him is disposed of cannot be treated as without basis. If the Act has provided for any facility, through which the 1st respondent can become a party to I.A.No.673 of 2008, I.A.No.1099 of 2008 filed under Order I Rule 10 C.P.C. can certainly be rejected, by placing reliance upon Section 5 of the Act. However, no such provision is cited. In that view of the matter, it cannot be said that in the facts and circumstances of the case, the application under Order I Rule 10 C.P.C. is excluded. Therefore, the civil revision petition is dismissed. The trial Court shall hear I.A.Nos.673 and 674 of 2008 together and pass appropriate orders within six weeks from the date of receipt of a copy of this order. There shall be no order as to costs.