Insolvency proceedings and money suits: Official Assignee need not be impleaded in a promissory note recovery claim.

A money suit on a promissory note against defendants who later became insolvents did not, by that fact alone, become a proceeding relating to the insolvent property under Section 68(1)(d) of the Presidency Towns Insolvency Act. The Madras HC noted that the Official Assignee may institute, defend or continue proceedings only where the dispute concerns the insolvent's property, and distinguished ordinary money claims provable in insolvency from proceedings directly affecting assets vested in the Assignee. On that reasoning, the suit could proceed against the debtors without impleading the Official Assignee, who was neither a necessary nor a proper party.

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Issues: Whether, after the defendants in a money suit were adjudicated insolvents, the Official Assignee was a necessary or proper party to the suit under Section 68(1)(d) of the Presidency Towns Insolvency Act.

Analysis: The provision authorises the Official Assignee to institute, defend or continue legal proceedings only when they relate to the property of the insolvent. A suit for recovery of money on a promissory note against persons who later became insolvents does not, by itself, constitute a proceeding relating to the insolvent's property. The Court distinguished proceedings directly concerning assets of the insolvent from ordinary money claims provable in insolvency, and held that such a claim can be pursued against the debtors without impleading the Official Assignee. The Official Assignee is not made a necessary or proper party merely because the defendants' estate has vested in him.

Conclusion: The Official Assignee was neither a necessary nor a proper party, and the order directing impleadment was unsustainable.

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