TaxTMI 
TaxTMI 
2007 (6) TMI 584
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....his own petition by this Court on 25.4.1996. At the commencement of the insolvency the 1st respondent was found residing in the schedule property which is premises bearing Door No. 387, Plot No. 412, N.S.K. Nagar, 21st Street, Arumbakkam, Chennai-106. This property without the superstructure was originally allotted to the insolvent by the 3rd respondent-Board in the year 1984 and according to the insolvent, he put up a building consisting of 3 floors (ground +2 floors) on the lands in the year 1988. Though the entire cost was paid to the Board, the sale deed is yet to be executed in favour of the insolvent. In his examination, the insolvent deposed that for a meager sum of Rs. 22,088/-, one Krupakaran, the 2nd respondent herein coerced the insolvent to transfer the ownership in his name (2nd respondent). Thereafter the 2nd respondent approached the Board to cancel the original allotment made in the year 1984 in favour of the 1st respondent/insolvent and to re-allot the same in favour of 2nd respondent. The further case of the insolvent is that he was residing in that house and he was threatened by 2nd respondent to deliver vacant possession. Therefore, the insolvent requested the O....
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....e insolvent to challenge the cancellation as well as reallotment. 8. It is further stated by the 2nd respondent that the insolvent executed an unregistered deed on 25.12.1998 in favour of the 2nd respondent. According to the 2nd respondent, the Tamil Nadu Slum Clearance Board cancelled the allotment made in favour of the insolvent on 1.11.1995 for having violated the condition of lease-cum-sale deed and thereafter the schedule property was allotted, to the 2nd respondent by order dated 15.11.1995. Only When the officials of the Official Assignee attempted to seal the property, he came to know about the insolvency proceedings. He filed an Application in A. Nos. 191 and 192 of 1996 to implead him as a party in the above I.P., and sought for an order of injunction not to disturb his possession. This Court-dismissed the Application Nos. 191 and 192 of 1996. Aggrieved by the dismissal of the Application Nos. 191 and 192 of 1996, the 2nd respondent filed O.S.A. Nos. 260 and 261 of 1996 and the same is pending with an order of injunction in favour of the 2nd respondent. An offer was made by the 2nd respondent to purchase the property as mentioned by him in his memo filed before the Off....
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....Clearance Board to the insolvent for putting up superstructure on the lands allotted to him (Ex.P-13), the Corporation tax receipts, to show that property tax was paid by the insolvent for the period 1989-90, to 1994-95 (Ex.P-14) and the Plan showing the additional construction (Ex.P-25), submitted that all along the insolvent had been in possession of the property after putting up the entire superstructure and he had been forcibly removed from his property by the 2nd respondent. Therefore the learned Senior Counsel submitted that the 2nd respondent had no rights to be in possession of the property and the property is to be sold, in public auction by the Official Assignee. The learned Senior Counsel further relied on an unreported judgment of this Court dated 17.12.1971 made in A. No. 589/1971 in I.P. No. 39/1979 to submit that the lessee of a lease-cum-sale agreement acquires an interest in the property and he is entitled to get a conveyance from the Board on his fulfilment of the obligations undertaken by him and such a right in a property, which on the adjudication of lessee, vest with the Official Assignee. 12. Per contra, the learned counsel for the 2nd respondent vehementl....
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....he sale consideration towards the Plot allotted to him and to execute the sale deed in his favour and submitted that this suit was dismissed on 19.8.1993 as not pressed by the insolvent and therefore the insolvent and consequently the Official Assignee could not ask for a sale deed from the Board. 13. I have considered the rival submissions carefully with regard to facts and citations. 14. The facts which are not in dispute are: (1) the 1st respondent was adjudicated as insolvent on his own Petition by order dated 25.4.1996 in I.P. No. 33/1996; (2) The insolvent in I.P. No. 33/1996 mentioned that the schedule property was allotted to him by the Board and the Board is yet to execute the sale deed though the entire cost was already paid; (3) In Annexure 'C' of the Petition, the schedule property was not shown as one of the assets of the insolvent by the insolvent; (4) when examined on 26.4.1996, the insolvent admitted that he was residing in the property and he had to hand over possession to 2nd respondent on or before 25.4.1996. On 6.5.1996 the insolvent informed the Official Assignee that he has been forced by the 2nd respondent to deliver vacant possession and requested the ....
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....interest in the property and he is entitled to get the conveyance and this right is in the nature of a right to get a sale deed and such a right is a property which will vest with the Official Assignee on the adjudication of the lessee. 20. The above order dated 17.12.1971 in Application No. 589/1971 in O.P. No. 39/1970, was challenged before the Division Bench in O.S.A. No. 2/1972 and the Division Bench agreed with the learned Single Judge by holding that the lessee's rights are valuable rights which could well be treated as property, which on adjudication would vest with the Official Assignee. 21. Therefore the insolvent has certainly got a right as a lessee under a lease-cum-sale agreement executed between him and the Slum Clearance Board. But in the present case, the 1st respondent was adjudicated as insolvent on 25.4.1996, but the Tamil Nadu Slum Clearance Board cancelled the allotment itself on 1.11.1995 and thereafter reallotted the same to the 2nd respondent by entering into a fresh lease-cum-sale agreement. This fact was very much known to the insolvent but he did not take any steps in this regard till 25.4.1996. In view of the subsequent cancellation and the con....
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....ion 36 of the Act. 27. This Section 7 is different from Section 4 of the Provincial Insolvency Act, 1920, which empowers the Court to decide all questions whether of title or priority or of any nature whatsoever and whether involving matters of fact and law for distribution of property in any such case. Section 7 of the Presidency Towns Insolvency Act is narrower than Section 4 of the Provincial Insolvency Act, in the sense that it does not confer jurisdiction on the Court to go into the question of title. In such a case the remedy of Official Assignee will not be to file an Application under Section 7 of the Act but to take other appropriate legal proceedings which includes a Suit. Further remedy under Section 7 of the Act is a discretionary remedy and it is open to the Court in the exercise of its discretion to refer the Official Assignee to a regular Suit or other legal proceedings. 28. Under Section 36(5) of the Presidency Towns Insolvency Act if the Official Assignee on his examination of any person finds that such person admits that he has in his possession any property belonging to the insolvent, then the Court may order him to deliver to the Official Assignee that pro....