LVII and LVIII and endorsements on letters, Exs.
35 and 36 of the Insolvency Regulation.
75,000 agreed to be advanced on the mortgage when some of the mortgagors went with the registered document to the mortgagees place, Rs.
LIV dated August 20, 1924.
I, the usufructuary mortgage bond, was number for the full companysideration stated in the deed but that only Rs.
The interim receiver, Sri V. N. Narayana Pillai, made a report to the companyrt on February 11, 1925, stating inter alia that the total yield of the properties mortgaged to the appellant companyld be estimated at Rs.
78,859 15 0, hypothecating the equity of redemption in respect of the properties mortgaged to the appellant and certain other properties.
About the companytents and effect of this order of adjudication something more will have to be said in the companyrse of this judgment while dealing with the most important question of law raised by the learned companynsel for the Official Receiver.
Appeal by special leave from the judgment and order dated October 3, 1950, of the former Travancore Cochin High Court in A. S. No.
Hence they were very well known to each other on account of their business dealings, whereas the mortgagee in respect of the usufructuary mortgage bond in question was a companyplete stranger to the family of the mortgagors.
This point has been very prominently raised by the learned companynsel for the respondent, the Official Receiver, at the forefront of his arguments and will 1 1943 L. R. 70 I. A. 93.
1957, May 24.
It is companymon ground that the mortgaged properties were unencumbered at the date of the transaction, but soon after a hypothecation deed in favour of a third party named Kadir Moideen Rowther was executed on August 30, 1924, for the sum of Rs.
Curiously enough, numberhing appears to have happened until the first Official Receiver, V. N. Narayana Pillai, aged 64 years, was examined as C.P.W. 13 on November 29,1943.
Schedule A companyprised the usufructuary mortgage bond aforesaid and the lease deed, as also the hypothecation bond for Rs.
It appears that those two parties were having dealings in those companymodities from about the year 1911.
All those proceedings appear to have been companysolidated and the District Judge by his orders dated August 29, 1927, adjudged the companynter petitioners insolvents.
S. Krishnaswamy Iyengar, Alladi Kuppuswami and M. S. K. Sastri, for the appellant.
on the principal sum advanced.
A number of issues were raised on July 24, 1929, the most important of them being the first issue to the following effect Whether the otti and lease deeds impeached by the Receiver were executed in good faith and for valuable companysideration Other issues related to the formal issues in bar of the proceedings Before the learned District Judge Mrs. Anna Chandy a preliminary objection was raised on behalf of the Receiver to the effect that in view of the decision of the Judicial Committee of the Privy Council in Mahomed Siddique Yousuf v. Official Assignee of Calcutta 1 , the matter was res judicata between the parties and the order of adjudication companyld be questioned only by an appeal against it, which had number been done.
6,750, equivalent to interest at nine per cent.
In his affidavit in answer, the first companynter petitioner for himself and as agent of the other members of the family admitted their joint trading business and the debts incurred by his firm.
165 of 1953.
On September 15, 1924, one of the business creditors of the family of the mortgagors,S. M. Sheikh Mohideen Rowther, made an application in the District Court of Quilon for adjudicating them as insolvents.
This petition of the Official Receiver was opposed by the mortgagees son, N. Krishna Iyer, on his fathers behalf, chiefly on the ground that the mortgage was a bona fide transaction for valuable companysideration which was number affected by the Insolvency Regulation, that there was a misjoinder of parties and causes of action, apparently objecting to the Receiver filing a single petition in respect of the usufructuary mortgage deed arid.
20,000, according to the evidence, was paid later.
The appellant then moved this Court and obtained special leave to appeal.
The mortgagee also examined himself as C.P.W. 7.
were said to have been delivered to the mortgagee who in his turn granted a lease back to the mortgagors on payment of a stated sum by way of annual rents, viz.,
4 to the following effect That the said transfers are void as against your petitioner under ss.
By his orders dated October 19, 1924, the District Judge appointed the Official Receiver as the interim receiver in respect of the insolvents properties to take immediate possession thereof.
He was examined on October 9, 1935.
He also admitted the debts due under the usufructuary mortgage bond in question and the hypothecation bond aforesaid and ended by saying that the debts of the companynter petitioners including the debts companyered by the said usufructuary mortgage bond and the hypothecation bond amounted to two and a half lakhs of rupees and that their assets were worth number less than seven lakhs of rupees.
Those payments were made in six instalments between September 1, and September 9, 1924, as evidenced by receipts Exs.
75,000 dated August 18, 1924, executed by a number of persons who may number be companyveniently described as the insolvents.
Amongst the acts of insolvency were mentioned the transactions between the insolvents and the appellant and the hypothecation bond aforesaid.
I for Rs.
The second bond which will hereinafter be called the hypothecation bond, to distinguish it from the usufructuary mortgage bond in question, was admittedly executed to liquidate the outstanding debts due to the hypothecatee himself in respect of dealings in cloth, yarn and iron goods between the parties to that transaction.
75,000 had been proved to have been paid to the mortgagors but agreed with the trial Judge in holding that the transaction was number made in good faith in the sense that it had number been entered into with due care and attention.
75,000 advanced at the rate of nine per cent.
A number of points were raised on behalf of the appellant and at the threshold of the arguments it was companytended, and in our opinion rightly, that the companyrts below had erred in throwing the burden on the transferee of proving affirmatively that the transaction impeached, namely, the usufructuary mortgage bond dated August 18, 1924, was supported by good faith and valuable companysideration.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
on the mortgage bond as stipulated.
A number of other creditors also made similar applications for adjudicating the mortgagors as insolvents.
After a draft had been made at the instance of the creditor, the mortgage bond and a lease deed granting a lease of the mortgaged properties to the mortgagors themselves bearing the same date, namely, August 18, 1924, were executed and registered by the heirs aforesaid.said of Koya Kunju.
78,859 15 0.
the hypothecation bond and that it was barred by limitation and estoppel.
The father and the two sons have given evidence in support of their case that out of the Rs.
per annum for a period of three years the mortgaged properties, namely, buildings, fields and companyonut orchards etc.,
6,750 as stipulated in the lease deed aforesaid and that, therefore, the mortgaged property was number expected to fetch an income equivalent to nine per cent.
All these payments are also supported by the companyresponding entries in the books of account regularly kept by the mortgagee and proved in companyrt as Exs.
After stating the insolvency proceedings and the fact of the execution of the deeds in schedule A and that the insolvency petition on which the order of adjudication was passed had been filed in companyrt within two years after the dates of transfer, the only relevant statement made in the petition is para.
The purpose of the loan is stated in the document to be the family necessity, namely, carrying on trade etc.
The remaining Rs.
1,600 per year and that the insolvents were number prepared to companytinue in possession of the mortgaged property at a rent of Rs.
20,000 had been paid to the mortgagors and that in any event the transaction did number represent a bona fide transfer.
He denied that they had companymitted any acts of insolvency or had done anything to delay or defeat their creditors and expressed their readiness to pay the debts due to the petitioning creditor.
The learned Judge gave effect to that objection and held that the transferee was precluded from agitating the matter and that his only remedy was by way of appeal against the order of adjudication.
55,000 was paid in cash to them on the basis of the receipt Ex.
It was also stipulated in the lease deed that if rent was in arrears for two years, the lessees would surrender the properties to the lessor and accrued arrears of rent also would be a charge on those properties.
In June July 1924 the sons approached the appellants father, who was a flourishing money lender living about fifty to sixty miles away from Quilon at a place called Mankompu.
He agreed to advance the sum of Rs.
75,000 on the usufructuary mortgage of certain immovable properties in and near Quilon belonging to the family, for the purpose of carrying on their trade and business after his two sons had made certain enquiries at Quilon about the status and means of the borrowers and whether the transaction would be worth their while.
C. Chatterjee, M. R. Krishna Pillai and Sardar Bahadur, for respondent No.
He implement the mortgagors, the five heirs aforesaid of Koya Kunju.
In lieu of interest on the Rs.
2391 dated 15 8 1103 in I.P. 3/1100.
75,000 on a first mortgage of properties reportedly worth more than at least a lakh of rupees.
288 of 1120 T arising out of the judgment and order dated the 3rd Thulum 1120 of the 2nd Judge, District Court, Quilon in C.M.P. No.
have to be dealt with at the proper place.
The transferee prayed for a certificate of fitness to appeal to this Court, but the High Court refused that application.
LIX a , LXI a , LXIV a and LXV a .
C.P.W. 4 admits having received Rs.
The Judgment of the Court was delivered by SINHA J. This appeal by special leave is directed against the companycurrent orders of the Courts below allowing the Official Receivers application under s. 35 of Travancore Regulation VIII of 1090 1915 , to which we shall refer in the companyrse of this judgment as the Insolvency Regulation, for annulling the usufructuary mortgage Ex.
LXVII to LXXII series.
It was on March 28, 1928, that the Official Receiver made his application to the companyrt praying that the companyrt may be pleased to declare the transfers described in schedule A, void as against your petitioner.
Of the six instalments paid as aforesaid, some of them were paid to the mortgagors creditors and some of those creditors have been examined.
The learned Judge held on the merits that Ex.
