Case Note & Summary
The matter concerned a long-standing insolvency dispute dating back to 1959. Roopsingh Chainsingh Ture filed Insolvency Application No.12 of 1959 before the Civil Judge Senior Division, Nashik, and was adjudged insolvent on 14.10.1961. A receiver was appointed over his properties, including the suit land bearing Survey No.9/1-A, a 2-acre 10-guntha plot in Nashik. The insolvent consented to the sale of the suit land in 1964. The receiver sought to have his name entered in the revenue records, noting that the insolvent had fraudulently transferred the land to his wife and son, and that it was in the possession of one Vitthal Bhikaji Gaikwad, who claimed tenancy rights under the Bombay Tenancy and Agricultural Lands Act, 1948. The receiver questioned the applicability of the Tenancy Act as the land fell within municipal limits. Over the decades, the property was put to auction, and the appellant, Rambhau Ganpat Koshire, emerged as the auction purchaser. He filed applications (Exhibits 396 and 404) seeking confirmation of the sale, permission to prepare a final sale deed, deposit of stamp duty and registration charges, execution and registration of the deed through the court receiver, and delivery of possession. Meanwhile, the insolvent's heirs (respondent Nos.1 to 8) moved an application (Exhibit 378) under Section 35 of the Provincial Insolvency Act, 1920, for annulment of the insolvency adjudication, claiming all debts had been satisfied. The trial court, by a common judgment dated 28.01.2000, rejected the auction purchaser's applications and allowed the annulment, thereby dismissing the insolvency application (Exhibit 1). The auction purchaser's appeal (Civil Appeal No.131 of 2000) before the II Ad-hoc Additional District Judge, Nashik, was dismissed on 26.07.2004, confirming the trial court's orders. Against this, the auction purchaser filed Second Appeal No.1208 of 2004 under Section 100 of the Code of Civil Procedure, 1908, before the Bombay High Court, and a related Civil Revision Application No.90 of 2005. The High Court, noting the connected matters, clubbed them for hearing. By orders dated 05.10.2005 and 16.01.2006, the court directed final hearing at the admission stage due to the protracted litigation. After service of parties and deletion of certain respondents, the court heard parties on 26.04.2013 and reserved judgment. The second appeal was admitted on eight substantial questions of law, which included interpretation of various provisions of the Provincial Insolvency Act (Sections 4, 5, 27, 28, 35, 37, 41, 43, 56), the applicability of Order 21 Rule 92 CPC, limitation for annulment applications, the effect of annulment on the receiver's sale, and the res judicata impact of earlier findings on the tenant's claim under Section 70(b) of the Tenancy Act. The excerpt of the judgment ends before the court's analysis and final decision.
Issue of Consideration
(i) Whether the Courts below have properly interpreted and applied provisions of the Insolvency Act, and in particular, Sections 4, 5, 27, 28, 35, 37, 41, 43 and 56 in their proper perspective? (ii) Whether the Courts below were justified in holding that the insolvent, since deceased and respondent Nos.1 to 8 had satisfied all the debts of the creditors having regard to the material on record? (iii) Whether the Courts below were justified in holding that auction purchaser was not entitled to confirmation of sale in view of Order 21 Rule 92 of the C.P.C.? (iv) Whether the applications for annulment preferred by the insolvent and respondent Nos.1 to 8 at Exhibits 173 and 378 respectively are filed within limitation? (v) Whether the Courts below committed serious error in not dismissing applications at Exhibits 173 and 191 made by the insolvent? (vi) Whether Courts below were justified in holding that as adjudication is annulled, sale effected by the receiver became invalid and the suit land shall vest in respondent Nos.1 to 8 in view of Section 37 of the Insolvency Act? (vii) Whether findings recorded in the order dated 22.10.1969 passed by the learned trial Judge below Exhibit-148 and confirmed by the learned Joint Judge on 29.04.1971 in Civil Appeal No.107 of 1970 will operate as res judicata in the subsequent tenancy proceedings initiated by the tenant under Section 70(b) of the Tenancy Act? (viii) Whether in view of Section 4 of the Insolvency Act, the Insolvency Court could decide the tenancy issue that was raised by the tenant in application dated 22.04.1969 at Exhibit-148? And if the answer is in affirmative, whether the findings recorded by the Insolvency Court being final and binding for all purposes as between the insolvent on one hand and the tenant being the person claiming through or under the insolvent on the other will preclude Mr Gaikwad from claiming tenancy?
Case Details
2013 LawText (BOM) (06) 85
Second Appeal No.1208 of 2004
Ms Smita Gaidhani, Mr. P. N. Joshi, Mr. R. M. Haridas, Mr. M. S. Karnik, Mr. Gite, Mr. Inamdar
Rambhau Ganpat Koshire (since deceased) through his heirs and legal representatives 1. Smt. Fulabai Rambhau Koshire, 2. Shri Barku Rambhau Koshire, 3. Madhukar Rambhau Koshire, 4. Dr. Rajesh Rambhau Koshire, 5. Shri Dattatraya Rambhau Koshire, 6. Ms Nilima alias Jijabai Vasantrao Pekhale
1. Sardarshingh Rupsingh Ture, 2. Suratsingh Rupsingh Ture, 3. Gulabsingh Rupsingh Ture, 4. Kundansingh Rupsingh Ture, 5. Sundersingh Rupsingh Ture, 6. Kamalbai Rupsingh Ture, 7. Ashabai Rupsingh Ture, 8. Indirabai Rupsingh Ture, 9. Vitthal Bhikaji Gaikwad (dead) through legal heirs 9A. Tanhubai Vithal Gaikwad, 9B. Indubai widow of Madhumar @ Balasaheb Gaikwad, 9C. Avadhoot Madhukar @ Balasaheb Gaikwad, 9D. Devendra Madhukar @ Balasaheb Gaikwad, 9E. Rajesh Madhukar @ Balasaheb Gaikwad, 9F. Kum. Sarita Madhukar @ Balasaheb Gaikwad, 10. Bhimabai Meghraj Sancheti (dead) (deleted), 11. Pabudan Khubchand Chordiya (deleted), 12. Mohanlal Halabhai Gujrathi, 13. Radhamohan Hiralal Agrawal, 14. Madhavgovind Hiralal Agrawal, 15. Vasudeo Hiralal Agrawal, 16. Special Recovery Officer, Income Tax Dept., 17. Hirabai Bhagchand (dead), 18. Raghunath Bindraj Khatod (dead), 19. Fakira Tukaram Sope, 20. A. R. Deshpande, Advocate and Court Receiver
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Nature of Litigation
Challenge to rejection of applications for confirmation of auction sale and execution of sale deed in insolvency proceedings, and against annulment of insolvency adjudication.
Remedy Sought
The auction purchaser sought (i) permission to prepare final sale deed, deposit stamp duty and registration charges, and execution and registration through the court receiver; (ii) confirmation of auction sale and execution of sale deed in his favour; and (iii) reversal of the orders annulling the insolvency adjudication and dismissing the insolvency application.
Filing Reason
The trial court and the first appellate court rejected the auction purchaser's applications for confirmation of sale and allowed the insolvent's heirs' application under Section 35 of the Provincial Insolvency Act, 1920, for annulment of the insolvency adjudication.
Previous Decisions
The Civil Judge Senior Division, Nashik, by judgment and decree dated 28.01.2000, rejected applications Exhibits 396 and 404 and allowed application Exhibit 378, and consequently dismissed Insolvency Application No.12 of 1959. The II Ad-hoc Additional District Judge, Nashik, by judgment and decree dated 26.07.2004 in Civil Appeal No.131 of 2000, confirmed the trial court's orders.
Issues
Whether the Courts below have properly interpreted and applied provisions of the Insolvency Act, and in particular, Sections 4, 5, 27, 28, 35, 37, 41, 43 and 56 in their proper perspective?
Whether the Courts below were justified in holding that the insolvent, since deceased and respondent Nos.1 to 8 had satisfied all the debts of the creditors having regard to the material on record?
Whether the Courts below were justified in holding that auction purchaser was not entitled to confirmation of sale in view of Order 21 Rule 92 of the C.P.C.?
Whether the applications for annulment preferred by the insolvent and respondent Nos.1 to 8 at Exhibits 173 and 378 respectively are filed within limitation?
Whether the Courts below committed serious error in not dismissing applications at Exhibits 173 and 191 made by the insolvent?
Whether Courts below were justified in holding that as adjudication is annulled, sale effected by the receiver became invalid and the suit land shall vest in respondent Nos.1 to 8 in view of Section 37 of the Insolvency Act?
Whether findings recorded in the order dated 22.10.1969 passed by the learned trial Judge below Exhibit-148 and confirmed by the learned Joint Judge on 29.04.1971 in Civil Appeal No.107 of 1970 will operate as res judicata in the subsequent tenancy proceedings initiated by the tenant under Section 70(b) of the Tenancy Act?
Whether in view of Section 4 of the Insolvency Act, the Insolvency Court could decide the tenancy issue that was raised by the tenant in application dated 22.04.1969 at Exhibit-148? And if the answer is in affirmative, whether the findings recorded by the Insolvency Court being final and binding for all purposes as between the insolvent on one hand and the tenant being the person claiming through or under the insolvent on the other will preclude Mr Gaikwad from claiming tenancy?
Judgment Excerpts
On 17.08.1959, Roopsingh Chainsingh Ture (insolvent) filed Insolvency Application No.12 of 1959 before the learned trial Judge for adjudicating him as an insolvent.
Second appeal is admitted on the following substantial questions of law: (i) Whether the Courts below have properly interpreted and applied provisions of the Insolvency Act, and in particular, Sections 4, 5, 27, 28, 35, 37, 41, 43 and 56 in their proper perspective?
By order dated 05.10.2005, the Court directed that as the matter is dragged since the year 1959 onwards, the Second Appeal and Civil Revision Application shall be heard finally at the stage of admission and called for records and proceedings.
Procedural History
1959-08-17: Roopsingh Ture filed Insolvency Application No.12 of 1959. 1961-10-14: Adjudged insolvent, receiver appointed. 1962-04-10: Mr. M. A. Kachole appointed as receiver. 1964-08-18: Insolvent gave no objection for sale of suit land. 1965-02-12: Receiver filed report (Exh.91) seeking entry of his name in revenue records, alleging fraudulent transfer by insolvent and questioning applicability of Tenancy Act. 1969-04-22: Tenant filed application (Exh.148) claiming tenancy; later, insolvent filed applications Exh.173 and 191 for annulment? (not fully clear from text). 1969-10-22: Trial court passed order below Exh.148; confirmed in appeal on 1971-04-29. 2000-01-28: Trial Court rejected auction purchaser's applications Exh.396 and 404; allowed Exh.378 (annulment under Section 35); dismissed Insolvency Application. 2004-07-26: District Court dismissed Civil Appeal No.131 of 2000, confirming trial court. 2004: Second Appeal No.1208 of 2004 filed. 2005: Civil Revision Application No.90 of 2005 filed. 2005-08-02: Noted connection; transferred and clubbed by Chief Justice. 2005-10-05: Directed final hearing at admission stage. 2006-01-16: Service directions; matter listed for final disposal. 2010-02-17: Adjourned; interim order continued. 2013-04-26: Heard and reserved. 2013-06-10: Judgment pronounced (excerpt ends before decision).
Acts & Sections
- Code of Civil Procedure, 1908: Section 100, Order 21 Rule 92
- Provincial Insolvency Act, 1920: 4, 5, 27, 28, 35, 37, 41, 43, 56
- Bombay Tenancy and Agricultural Lands Act, 1948: 70(b)
