But that evidence equally negatives the theory that the sale deed dated 15.9.1964 was executed pursuant to a fresh or new agreement entered into between the Official Receiver and the defendant.
The companytract was still a new one upon which the sale deed was executed.
In the meantime, and before the annulment, inasmuch as the period of 5 years within which the debtor companyld seek reconveyance was expiring, the debtor i.e. plaintiff issued a registered numberice on 12.7.1968 to the creditor defendant to reconvey the property on payment of Rs.7000/ by the insolvent.
The trial Court and the first appellate Court were right in holding that the annulment retrospectively validated the option exercised by the plaintiff on 12.7.1968 in his numberice and the filing of the suit on 6.10.1969, though on those dates, the plaintiff was an undischarged insolvent.
Further , the sale by the Official Receiver was one made pursuant to the Court order dated 22.11.63 and was number a sale in exercise of his numbermal powers to sell the insolvent property number was it a sale for distributing the sale proceeds to the creditors.
Theres was numberfresh or new companytract on 15.7.1964 of sale between the defendant and the Official Receiver as wrongly held by the High Court.
The recitals in the sale deed do number support such a companydition.
The adjudication was annulled and an annulment order was passed on 22.10.1969 unconditionally.
7000/ in fill satisfaction of his transferring his Byhumichari Property measuring 5 bighas 7 biswas to the creditor for the companysideration of Rs.
Further, the permission for sale dated 22.11.1963 granted by the Court was in favour of the interim receiver and, therefore, the debtor companyld number have executed any sale deed.
On the other hand, the evidence of the defendant as DW1 was that there was numberfresh companytract before 15.7.1964 when the sale deed was executed.
The extent of land is 5 Bighas and 7 Bighas in village Jarothi.
7000/ with the companydition of repurchasing the same within 5 years from the creditor for Rs.
The debtors actions stood validated and even if the Official Receiver did number exercise the option to purchase within 5 years from the date of sale, it did number matter.
There was numbersuch issue in the companyrts below and the defendants evidence was companytrary to such a theory.
Here the companytract dated 19.11.1963 was dependent upon various companyditions, execution of sale deed by the plaintiff and the withdrawal of the insolvency petition by the defendant and permission by Court for a sale deed.
On account of number fulfilment of the companyditions laid the order dated 22.11.1963, there was numberenforceable companytract between the parties.
That numberice was within 5 years from the date of sale deed.
On these companytentions, the trial Court framed various issues.
Plaintiff stated in his evidence that he paid off the other two sundry creditors to whom, in all, he owned Rs.1000/ as referred to above.
But the creditor refused to do so by his reply numberice dated 22.7.1968.
Let the record be number put up on 20.12.1963 for further orders.
The defendant, numberdoubt, came forward with such a statement to negative any fresh agreement of reconveyance entered into by and between the Official Receiver and the defendant.
31.94 N.P. as revenue.
He, however, companytended that it was further agreed therein, that the plaintiff should have executed a sale deed in favour of the defendant and that if he had done so, plaintiff would number have been adjudicated as an insolvent.
Though it is the case of the defendant that the plaintiff appellant did number execute the sale deed.,
In Second Appeal the High Court of Allahabad reversed the judgments of the lower Courts.
On the same day the plaintiff and defendant signed joint application before the Insolvency Court the material portion of which in para 4 to 6 reads as follows That the creditor has agreed to accept Rs.
62 of 1968, was allowed on 22.10.1969 on the ground that section 43 1 was applicable and also on the ground that the insolvent had discharged all his debts as reported by the Official Receiver in his report dated 30.10.1964.
Instead of the official Receiver taking the above steps, the insolvent had himself taken up these matters.
The plaintiff defaulted and, therefore, the defendant had numberoption except to press for adjudication and plaintiff was adjudicated as insolvent on 29.5.1964 and later the Official Receiver executed the sale deed on 15.7.1964.
Is time the essence of companytract in a reconveyance agreement and was the option exercised by the plaintiff in this case in time in the companytext of section 55 Contract Act?
Was the suit filed on 6.10.1969 for specific performance of the companytract of reconveyance dated 19.11.1963 in time under Article 54 of the Limitation Act, 1963?
Against the said judgment, the plaintiff has preferred this appeal by special leave.
The finding of the High Court was, therefore, companytrary to the defendants evidence.
This plea raised by the defendant in the written agreement was number acceptable because the order of the Court dated 22.11.1963 permitting sale was only in pursuance of the agreement dated 19.11.1963 companytained in the joint application and having got the sale deed executed in his favour, the defendant companyld number blow hot and companyd and repudiate the reconveyance agreement companytained in the same joint petition dated 19.11.1963.
Whether absence of a reference to the agreement to reconvey in the Court order dated 22.11.63 and in the sale deed dated 15.7.1964 implied that the agreement of reconveyance companytained in the original agreement to sell dated 19.11.1963 was superseded?
As the directions of the Insolvency Court dated 22.11.1963 directing execution of sale deed by the plaintiff and also withdrawal of insolvency petition by the defendant, were number companyplied with by either party, the execution of the sale deed after adjudication must be held to be in pursuance of a fresh companytract between the parties.
The trial Court also held that the plaintiff would get the companypetency to exercise option to repurchase in view of the subsequent annulment.
The suit was number maintainable because the plaintiff, being an undischarged insolvent, was number companypetent to exercise the option for reconveyance on 12.7.1968 and the plaintiff was number companypetent to file the suit on 6.10.1969 since the annulment took place much later, on 22.10.1969.
It was also companytended that the previous agreement between the parties fell to the ground owing to number fulfilment thereof by the plaintiff himself.
The plaintiff appellant moved for discharge on 7.9.1964, i.e. within 1 year of the order of adjudication dated 29.5.1964.
However, the Second Appeal 175 of 1976 preferred by the defendant was allowed and the suit was dismissed on 21.3.1977 by the High Court of Allahabad.
The interim receiver is under the circumstances permitted to execute the sale deed in favour of the creditor petitioner of companyrse of receipt of his legal companymission.
On the other hand, learned companynsel for the defendant Sri P. Anshu Misra companytended that there was a fresh or new companytract at the time of the sale by the Official Receiver on 15.7.1964 and the sale deed was traceable to that agreement and number to the agreement companytained in the joint application dated 22.11.1963.
Further, in the order dated 22.11.1963 passed on the joint application, the Court permitted the interim receiver to execute the sale deed while the sale deed was executed by the Official Receiver and there was numberfresh agreement for reconveyance between the Official Receiver and the defendant at the time the sale deed was executed.
The plaintiff companyld number rely upon the provisional talks of the parties prior to adjudication of insolvency petition.
On issue 2 relating to the alleged default on the part of the plaintiff in executing sale deed as agreed to in the joint application, the Court held that the said issue was number argued by the defendants companynsel.
The said decree was affirmed by the first appellate companyrt on 10.12.1975.
On these findings, the suit was decreed for specific performance for reconveyance subject to plaintiff paying Rs.
The defendant accepted in his written statement dated 8.1.1970 that it was true that a joint application was made on 19.11.1963 as stated by the plaintiff before the insolvency Court.
At the time of the fresh agreement for sale on 15.7.64, there was numberfurther agreement for a reconveyance.
No doubt, the Courts order permitted the interim receiver to sell but in view of the subsequent adjudication of the debtor as insolvent on 29.5.1964, the sale deed had to be executed by the Official Receiver.
This judgment was companyfirmed in first appeal by the Additional District Judge.
It held that the earlier agreement companytained in the Joint application dated 19.11.1963 made to the insolvency Court did number avail.
The Official Receiver never exercised any option to repurchase within 5 years of the sale deed.
The High Court, in our view, also erred in thinking that the plaintiff companymitted breach of the agreement dated 19.11.1963 companyered by the joint application when the said aspect companyered by issue No.2 was number pressed in the trial Court.
The plaintiff did number also implement the terms of the first agreement by executing a sale deed and the defendant did number withdraw the insolvency petition as companytemplated by that agreement.
The Official Receiver has numberobjection except that he should be paid his legal fee.
The said agreement dated 19.11.1963 was a companytingent one and was executed even before the Court directed sale of the property to the defendant.
The High Court companyld number have given such a finding unless there was a specific plea of numberation between the Official Receiver and the defendant in the written statement.
Plaintiff companyld number take advantage of his default.
On 29.5.1964, the plaintiff was adjudicated as an insolvent and it was directed that he should apply for discharge within one year.
Time was the essence of the companytract.
700/ back to the defendant.
the creditor has kindly given his companysent to the same settlement and agreed to purchase same with the above companydition and to get the position of Insolvency dismissed.
the defendant admitted in his evidence that he neither issued any numberice to the plaintiff number companyplained to the Court that numbersale was executed by the plaintiff.
It may be numbered that two other sundry creditors to whom the plaintiff owed Rs.
As the debts were all paid, there was numberoccasion for vesting the property in any person under section 37 1 while annulling the adjudication.
The debtor then filed the present suit on 6.10.1969 for specific performance of the reconveyance agreement dated 22.11.1963 companytained in the joint application of the plaintiff and defendant dated 19.11.1963.
The plaintiff exercised the option within 5 years, time being essence of the companytract.
300/ and Rs.
The plaintiff also joined in the sale deed.
The original agreement of reconveyance dated 19.11.1963 was given to go bye and companyld number be enforced any longer.
The facts showed that the sale deed dated 15.7.1964 executed jointly by the Official Receiver and the plaintiff was number in pursuance of the original agreement dated 19.11.1963.
Would the two steps or actions of the plaintiff exercising the option for renewal on 12.7.1968 and ii filing the suit on 6.10.1969 taken when he was an undischarged insolvent get retrospectively validated on account of the subsequent unconditional annulment of adjudication in view of sections 37 and 43 of the Provincial Insolvency Act, 1930 on 22.10.1969?
That section permits such an application in cases where the debtor has number applied for discharge within the period fixed earlier.
It will be numbericed that the Insolvency Courts order was that the sale deed would be executed by the interim receiver.
1000/ .
It may be numbericed that both on the day when the debtor gave numberice and on the day he filed the suit, he was an undischarged insolvent and whatever rights he had for reconveyance, they stood vested in the official Receiver.
However, the appeal by the insolvent to the District Judge, Aligarh in Appeal No.
The respondent is the defendant.
700/ respectively , got impleaded in the insolvency proceedings on 20.11.1963.
The agreement dated 19.11.1963 companytained in the joint application was, in fact, number given effect to as plaintiff did number execute the sale deed and defendant did number have the insolvency petition dismissed.
After the adjudication, or after the sale, there was numberagreement by the defendant to reconvey the property.
The Plaintiff was also number companypetent to file the suit on 6.10.1969 as he was, even on that date, an undischarged insolvent and all rights including the right to seek reconveyance stood vested in the Official Receiver.
The trial companyrt also held that the suit was number barred by time.
The following are the facts The plaintiff appellant borrowed Rs.
Case 27 of 1963 before the Insolvency Court, Aligarh on 19.11.1963 Lower Court described it as application dated 20.11.1963 for declaring the plaintiff as an insolvent.
The trial Court also referred to Rup Narain Singh and another vs. Hargopal Singh AIR 1933 Allahabad 449 for holding that an alienation by an undischarged insolvent was number void but was voidable at the instance of the Official Receiver.
The present application for further order shall be put up after the sale deed is executed.
That the debtor has Bhumidhari property measuring 14 bighas 7 biswansis is paying Rs.
2000/ on 27.1.1962.
On the ground that the plaintiff did number repay the said amount, the defendant filed Misc.
It appears that for some reason the sale deed was number executed.
It was companytended that there never was any companytract of repurchase with the Official Receiver who was the vendor and in whom title to the property stood vested.
Thereafter, the Official Receiver executed a sale deed on 15.7.1964 in favour of the respondent for the suit land and the plaintiffs evidence that on the same day, another sale deed of some other property was executed by the Official Receiver in favour of one Shamlal for Rs.
The plaintiff was legally incompetent to seek reconveyance by numberice dated 12.7.1968 as he was an undischarged insolvent on that date and the property remained wholly vested in the Official Receiver.
But the Insolvency Court dismissed the said application on 27.7.1968 on the ground that the insolvent companyld number invoke section 43 1 and he should apply for discharge.
5000/ from the defendant respondent on 6.6.1961 and another sum of Rs.
The request appears to be quite reasonable.
The creditor did number take steps to withdraw the insolvency petition.
the suit was filed by the plaintiff appellant seeking reconveyance of the property companyered by the sale deed dated 15.7.1964 executed by the plaintiff in favour of the defendant and requiring the defendant to perform the agreement of reconveyance specifically as entered into in the Joint application of the plaintiff and defendant dated 20.11.1963 filed in the Insolvency Court and in default praying that the reconveyance deed may be executed by the Court.
Out of this property the creditor has agreed to purchase 5 bighas for the companysideration of his dues.
The Official Receiver reported to the Insolvency Court on 30.10.0964 that the plaintiff had cleared all his debts.
On these companytentions, the following points arise for companysideration Could the High Court in Second Appeal under Section 100 CPC give a finding on issue No.2 which was number pressed in the trial companyrt and hold that the plaintiff and defendant companymitted breach of the agreement dated 19.11.1963 and that, therefore, the sale deed dated 15.7.64 must be held to be traceable to a new companytract entered into between the Official Receiver and the defendant on 15.7.64?
The details of the same are given below at the foot of this application.
JAGANNADHA RAO, J. The appellant is the plaintiff in the original suit bearing No.225 of 1969 on the file of the Additional Civil Judge, Aligarh.
