Judgment :- 1. A. No.316 of 2010 has been filed to grant an interim stay of the proceedings by the Official Assignee the Respondent herein from taking steps to sell the schedule mentioned property for sale in Public Auction pending disposal of the main Petition. 2. A. No.317 of 2010 has been filed to direct the sale of the property to the Applicant-Seva Chakkara Samajam, a Charitable Registered Institution in pursuance to the Agreement of Sale between the House owners and the Ashram, free from the Mortgage in favour of the State Bank of India with their consent, the 5th Respondent herein on condition that their due whatever amount arrived, will have a change on the Net Sale proceeds. 2-A. These Applications have been filed by the Seva Chakkara Samajam, as a third party to Insolvency proceedings. 3. In the Affidavit filed in support of the Applications A. Nos.316 and 317 of 2010, Honorary Secretary of the Samajam, stated that the Applicant Samajam was a registered one under the Societies Act and it is also recognised by the State Government. Thus Samajam is a Tenant at No.89/41, Samipillai Street, Choolai, Chennai – 600 112 occupying the first floor and the terrace constructed as a kitchen with a water tank and a sump in the ground floor. The monthly rent is Rs.7,000/- and a sum of Rs.1,75,000/- was paid as advance to the owners who are Petitioners in the I.P.No.73 of 2005. 4. The owners of the property were running a Private Limited Company and they raised loan from State Bank of India, Fifth Respondent herein by mortgaging the above said property. Since the loan was not repaid, the Fifth Respondent filed A. No.159 of 2001 before the DRT II, Chennai for the recovery of a sum of Rs.28,48,483.65/- with interest at 15.81%. 5. Considering the financial difficulties of the owners Seva Chakkara Samajam came forward to purchase the property and was taking all efforts to collect donations for this purpose. The Seva Chakkara Samajam entered into a Sale Agreement with the owners of the property on 14.08.2002. The sale price was fixed at Rs.37,10,000/-. Along with the advance amount of Rs.1,75,000/- already paid by the Seva Chakkara Samajam, they paid a further sum of Rs.50,000/-. Thus Seva Chakkara Samajam paid Rs.2,25,000/- as advance for the proposed sale. 6. The Seva Chakkara Samajam entered into a Sale Agreement with the owners of the property on 14.08.2002. The sale price was fixed at Rs.37,10,000/-. Along with the advance amount of Rs.1,75,000/- already paid by the Seva Chakkara Samajam, they paid a further sum of Rs.50,000/-. Thus Seva Chakkara Samajam paid Rs.2,25,000/- as advance for the proposed sale. 6. When DRT ordered auction sale of the property by fixing the upset price at Rs.26 Lakhs, they filed I.A.No.705 of 2005 and 707 of 2005 and obtained stay of the sale. They also approached the 5th Respondent for a compromise. They also paid a further sum of Rs.3 Lakhs to the Bank through the house owners. Seva Chakkara Samajam in the meanwhile were able to collect a sum of Rs.37 Lakhs and the same was remitted in the Bank by way of term deposit. 7. At that time the house owners filed I.P. No.73 of 2005 and they were adjudicated as insolvents by order dated 16.06.2005. The Seva Chakkara Samajam received a letter from Official Assignee and thereafter they have been paying the rent of Rs,7,000/- per month to the Official Assignee. According to Seva Chakkara Samajam, it was founded in the year 1986. It is a charitable society with the main object of uplifting the poor and differentlyabled persons. At present there are 107 inmates, out of which 4 members are studying in colleges, 39 inmates are studying in higher secondary schools. There are 36 inmates in the age group of 11 months to 30 months and after attaining the age of 2-1/2 years they would be sent to K.G. Schools. Among the 26 elders some are widows, senior citizen and some are disabled persons. The Seva Chakkara Samajam is also housing mentally retarded persons who are sent to special schools run by Southern Railway. 3 of the inmates are studying in ITI’s. It receives donations from respectable citizens including AG & OT and Sridhi Sai Baba Trust. Only in the interest of the above said persons the Seva Chakkara Samajam wanted to purchase the property and the sale price was fixed at by taking into consideration the market value of the property that too, after obtaining the value from a qualified valuer. 8. Only in the interest of the above said persons the Seva Chakkara Samajam wanted to purchase the property and the sale price was fixed at by taking into consideration the market value of the property that too, after obtaining the value from a qualified valuer. 8. According to the Seva Chakkara Samajam, the 5th Respondent is willing to compromise the matter and they would accept Rs.25.10 lakhs as full and final settlement amount of their mortgage loan. This amount was already deposited by the Seva Chakkara Samajam/ the Applicant. As the Applicant is doing Yeeman Service, if the property is sold to the Applicant pursuant to the agreement dated 14.08.2002 it would be very much in the interest of the inmates of Seva Chakkara Samajam. Hence, they filed the above Applications for the aforesaid prayers. 9. A common Affidavit was filed to on behalf of the 5th Respondent-Bank opposing the Applications in March 2010 and seeking their dismissals. However, there was a change of heart and mind by the 5th Respondent and on 20.09.2010 the AGM of the Bank/ the 5th Respondent sent a letter to the Secretary of the Seva Chakkara Samajam acknowledging the receipt of Rs.30 Lakhs offered by them towards the compromise settlement without prejudice and subject to the terms and conditions of the compromise proposal and undertaking cum indemnity dated 18.09.2010 executed by the Seva Chakkara Samajam. 10. The Official Assignee filed a report dated 12.03.2010 wherein it was mentioned that the insolvents did not disclose any subsisting agreement of sale. On the other hand the Applicant herein was shown as an unsecured creditor for a sum of Rs.5,25,000/-. The Bank was shown as a creditor for Rs.25,10,000/-. The Official Assignee is not accepting the agreement or its enforceability. The Official Assignee was not aware of any of the DRT proceedings as he had no notice of the same. According to the Official Assignee the present day valuation will be more than Rs.1 Crore and the sale price of Rs.37,10,000/- is detrimental to the estate of the Insolvent. Hence the Official Assignee submits that the property must be sold by him under the supervision of the Court. 11. The Official Assignee filed First Additional Report dated 29.10.2010 stating that insolvent disclosed in their petition to the extent of Rs.2,31,31,742.74/- as debts. Hence the Official Assignee submits that the property must be sold by him under the supervision of the Court. 11. The Official Assignee filed First Additional Report dated 29.10.2010 stating that insolvent disclosed in their petition to the extent of Rs.2,31,31,742.74/- as debts. 46 creditors have filed their claims for a sum of Rs.54,92,018 and 21 claims were admitted for a sum of Rs.8,99,103/-. A sum of Rs. 15 Lakhs was deposited by the Applicant on 13.10.2000 and the property value is higher than that of Rs.15 Lakhs. 12. A reply Affidavit was filed by the Applicant for the Official Assignee’s report dated 12.03.2010. In the reply it is stated that the Applicant carried out all their obligations as contemplated under the Sale Agreement and the right of the Applicant under the Sale Agreement is subsisting and binding on the Official Assignee. It was pointed out that the One Time Settlement was entered into by them with the Bank prior to the filing of the Insolvency proceedings. They have also paid a sum of Rs.35,25,000/- so far towards the agreed sale consideration. Not only the Applicant got possession of the property pursuant to the Sale Agreement but also discharged the mortgaged amount. As the agreement is fully acted upon, the Sale Deed is to be executed in favour of the Applicant. Hence, they prayed for a direction to the Official Assignee to execute the Sale Deed in favour of the Applicant. 13. Heard the learned Senior Counsel Mr. M.S. Krishnan appearing for the Applicant, learned Senior Counsel Mr. R. Krishnasamy appearing for the Official Assignee and Mr. Om Prakash, the learned Counsel appearing for the Bank. I have also gone through the documents available on record. 14. The learned Senior Counsel for the Applicant while narrating the averments contained in Affidavit and reply Affidavit submits that the Applicant is a charitable society and not a business house. To protect and promote the interest of the downtrodden people only they approached the owners to purchase the property in August 2002. After obtaining qualified experts opinion only the sale price was fixed at Rs.37,10,000/-. After the payment of the advance amount, their possession is not a Tenants’ possession but a possession protected by Section 53 of Transfer of Property Act. After obtaining qualified experts opinion only the sale price was fixed at Rs.37,10,000/-. After the payment of the advance amount, their possession is not a Tenants’ possession but a possession protected by Section 53 of Transfer of Property Act. The learned Senior Counsel further submits that when the owners are before the DRT, they approached the Bank and because of their efforts a compromise was arrived at and the Bank came forward to offer One Time Settlement. Only thereafter, the insolvency proceedings were initiated by the owner. The learned Senior Counsel points out that so far as they have paid a sum of Rs.35,25,000/- and considering the special circumstances and also in the interest of the weaker sections of the society, a Sale Deed should be executed in favour of Seva Chakkara Samajam. The learned Senior Counsel points out that if the Application is not considered sympathetically, then the 5th Respondent-Bank would take steps to sell the property as secured creditor and the entire sale consideration would be appropriated by the bank towards their loan amount and in that event nothing would be left out and the Official Assignee also cannot question the same. On the other hand the learned Senior Counsel urges that the Bank has graciously come forward to settle the amount considering the fact the Applicant is a charitable society and is doing Yeeman Service to the poor and needy. The learned Senior Counsel further adds that by allowing this Application no real prejudice would be caused to the estate of the insolvent and on the otherhand, the Bank claims would be settled and the Seva Chakkara Samajam would continue to cater to the needs of the downtrodden people. Before winding up his arguments the learned Senior Counsel relied on the following judgments in support of his submissions: 1. R.M. Nagarathna Mudaliar and others v. S.M. Chidambaram Chettiar and others, AIR 1920 Mad. 860; 2. P.V.S. Krishnamurthy Pillai and another v. P.V.S. Sundaramurthy Pillai and others, AIR 1932 Mad. 381 . 15. The learned Senior Counsel for the 5th Respondent –Bank submits that eventhough Bank had initially opposed the Applicants, after finding out that the Seva Chakkara Samajam is rendering a selfless service to the really affected particularly destitutes and differently abled children and mentally challenged persons, they have decided to scale down their demand considerably and to accept the compromise put forward by the Applicant. The learned Counsel hastens to adds that this good gesture on the part of the Bank came out as the Bank, being a public sector organization, should support institutions espousing the public cause. Therefore if the Court does not permit the Official Assignee to execute the Sale Deed in favour of Seva Chakkara Samajam, then the Bank will proceed as per their statute by selling the property in the public auction to recover the Bank’s entire dues. The learned Counsel for the Bank also agreed with the learned Senior Counsel for the Applicant that if the Bank proceeds with the property as per the statute, then the sale proceeds would not be even sufficient to wipe out the entire dues of the Bank and nothing would be there to send to the estate of the insolvent. 16. Per contra, the learned Senior Counsel appearing for the Official Assignee submits that in spite of the noble activities of the Applicant still it is not feasible to execute the Sale Deed in favour of the Applicant. The learned Senior Counsel submits that in so far as the Insolvency proceedings are concerned, what is important is to sell the property at the best possible price, bring the money to the estate and distribute the same to the creditors proportionately. The learned Senior Counsel submits that the proposal made by the Applicant and the Bank is not in consonance with provisions of the Insolvency Act and therefore the Official Assignee must be permitted to sell the property under the guidance of this Court. 17. I have considered the rival submissions carefully with regard to facts and citations. 18. At the outset, I make it very clear that the facts of the present case are special and peculiar and the Applicant/ Seva Chakkara Samajam deserves sympathetic consideration considering the selfless service they are rendering to the poor, needy, disabled and downtrodden. The Applicant has produced enough materials to prove their claim that they are rendering services and after going through these documents I cannot but appreciate and admire their noble and selfless services. The photographs of the children and other inmates of the Seva Chakkara Samajam will move the heart of any one and all their future and welfare depend upon the outcome of these Applications. The photographs of the children and other inmates of the Seva Chakkara Samajam will move the heart of any one and all their future and welfare depend upon the outcome of these Applications. From the records I have also found that all respected persons including Governors and High Court Judges have paid a visit to the Seva Chakkara Samajam and appreciated their good work. In fact the office of the AG & OT High Court Campus, Chennai, on the basis of the order dated 12.10.1999 sent a cheque for a sum of Rs. 1 Lakh towards donation to conduct the charitable purposes. Further this Seva Chakkara Samajam has been registered under relevant Acts and a certificate of recognition was also granted under the Orphanages and other Charitable Homes (Supervision and Control) Act, 1960. I also find enough commendation letters and letters of appreciation given by the dignitaries who visited the Seva Chakkara Samajam. Therefore I am of the considered view that as a charitable organization rendering services to humanity and mankind especially marginalized section of the society, this Applicant deserves consideration. 19. Apart from that the 5th Respondent-Bank, who initially opposed the Application, had a big change of heart and mind after seeing the charitable activities of the Seva Chakkara Samajam/ Applicant and the beneficiaries. 20. I also find force in the submissions made by the learned Senior Counsel for the Applicant and the learned Counsel for the Bank. It is an undisputed fact the Bank’s fine gesture has come out openly for the sake of inmates of the Samajam and but for that the Bank would not have come forward to settle the amount. Further, if these Applications are not considered then the Bank as a secured creditor would stand outside the Insolvency proceedings, auction the property and the entire sale proceeds would be appropriated by them for the loan amount. In such an event also, the estate of the insolvents would get nothing out of the sale proceeds. Instead it would be justifiable to execute the Sale Deed in favour of Seva Chakkara Samajam especially when the Seva Chakkara Samajam is ready to pay another Rs.5 Lakhs apart from the Rs.15 Lakhs already paid by Seva Chakkara Samajam on 13.10.2010 to the Official Assignee. 21. Even on merits I find that the Applicant is entitled to get the Sale Deed in their favour as prayed for. 21. Even on merits I find that the Applicant is entitled to get the Sale Deed in their favour as prayed for. From the records, it is very clear that the insolvents entered into a Sale Agreement with the Applicant on 14.08.2002 itself. After paying the advance amount the nature of possession is also changed from that of tenant alone to that of tenant under agreement holder. Only on 15.06.2005, the owners who declared as insolvents in I.P. No.73 of 2005. It is an admitted case that the Bank is a secured creditor and as per Section 17 of the Presidency Town Insolvency Act, the mortgaged properties do not vest with the Official Assignee excepting the equity of redemption. The Applicant already approached the Bank for a compromise and a request for one time settlement was made by the Applicant on 20.02.2005, the Bank also agreed to receive a sum of Rs.21 Lakhs in full and final settlement of debts to be paid on or before 31.03.2005. If only parties have acted swiftly as per the compromise proposals, the Applicant would have got the property before 15.06.2005 itself, on which date the owners were declared as insolvents by this Court. It is also not in dispute that during the pendency of Appeal proceedings before DRAT, the Bank agreed to receive a sum of Rs. 30 Lakhs from the Applicant in full and final settlement of his mortgage debt. Accordingly, this was complied with by the Applicant on 20.09.2010. It is also not disputed that the Applicant has been depositing with the Official Assignee a sum of Rs.7,000/- every month from July 2005 as a tenant of the property. 22. In R.M. Nagarathna Mudaliar and others v. S.M. Chidambaram Chettiar and others, AIR 1920 Mad. 860, the Division Bench of this Court held as follows: “It was argued by Mr. Jayarama Ayyar for defendant 5 that the Court ought not to give specific performance because of the insolvency and the vesting of the properties in the Official Receiver. His argument shortly is that the Official Receiver is not representative-in-interest of the insolvent, that a decree for specific performance can only be granted against the persons entering into the contract or their representatives-in-interest and, not falling within those two categories, the Court ought to refuse specific performance. His argument shortly is that the Official Receiver is not representative-in-interest of the insolvent, that a decree for specific performance can only be granted against the persons entering into the contract or their representatives-in-interest and, not falling within those two categories, the Court ought to refuse specific performance. I find it difficult to follow this argument the result of which will be that all contracts enforceable against the insolvent at the date of his insolvency would cease to be enforceable against the Official Receiver in whom the properties vest by reason of the insolvency. Section 55, Insolvency Act, I think, makes the matter quite clear and, if any authority were needed, I may refer to Purushotham Naidu v. Ponnurangam Naidu, 1913 M.W.N. 897, where a similar question was decided by Sir Arnold White, C.J., and Oldfield, J., where it was held that specific performance of an agreement can be enforced against the trustee in bankruptcy of a vendor. No authority has been cited to support the view that specific performance ought not to be granted simply because a person becomes insolvent and the property vests in the Official Receiver.” 23. In P.V.S. Krishnamurthy Pillai and another v. P.V.S. Sundaramurthy Pillai and others, AIR 1932 MS 381, a Division Bench of this Court observed that contracts enforceable against an insolvent may be enforceable against the Official Assignee, though even then there is a discretion in the Court. 24. From the judgment, it is very clear that it is not as if the prayer sought for by the Applicant could not be granted at all and it is left to the discretion of the Court. It is true that when a discretion is vested with the Court, the Court has to exercise the same in a manner known to law and without any room for any arbitariness. I have already narrated the entire facts in detail and how I am impressed with the selfless service rendered by the Applicant to the needy, orphans, destitutes, downtrodden, handicapped and old aged persons. The Bank, being a public sector undertaking, is also aware of the same and only on that basis it has shown the fine gesture settling the matter with the Applicant to enable the hundreds of inmates to lead a decent life. The Bank, being a public sector undertaking, is also aware of the same and only on that basis it has shown the fine gesture settling the matter with the Applicant to enable the hundreds of inmates to lead a decent life. Therefore, it is a fit case wherein, the discretion vested with the Court is to be exercised in favour of the Applicant. 25. The learned Senior Counsel for the Applicant has given an undertaking that the Seva Chakkara Samajam would pay further sum of Rs.5 Lakhs and the 7% Government commissions charges to the Official Assignee within 15 days from the date of receipt of a copy of the order. The undertaking of the learned Senior Counsel is placed on record. 26. Therefore, I have no hesitation at all in directing the Official Assignee to execute the Sale Deed in favour of the Applicant/ third party/ agreement holder after receiving a sum of Rs.5 Lakhs with 7% Government commission from the Applicant as stated above. 27. The learned Senior Counsel representing Official Assignee shall be paid a sum of Rs. 50,000/- by the Official Assignee towards his remuneration from the payment of Rs. 5 Lakhs to be made by the Applicant. 28. I place it on record the valuable assistance rendered by Thiru M.S. Krishnan, the learned Senior Counsel for the Applicant, Mr. Om Prakash the learned Counsel for the 5th Respondent-Bank and Mr. R. Krishnasamy, the learned Senior Counsel for the Official Assignee to decide the issue involved in these Applications. 29. In the result, O.A. No.317 of 2010 is allowed in the above terms and O.A. No.316 of 2010 is closed as no orders are necessary.