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Kantilal Bapubhai Vs. Rajnikant Babubhai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberSecond Appeal No. 349 of 1939
Judge
Reported in(1942)44BOMLR132
AppellantKantilal Bapubhai
RespondentRajnikant Babubhai
DispositionAppeal dismissed
Excerpt:
.....to insolvency proceedings.;no second appeal lies to the high court from an order passed in appeal by a district judge setting aside an order of adjudication made by a subordinate court.;gopikabai v. chapsi (1934) 36 bom. l.r. 1236 and dattatraya chandraya v. bawachekar (1939) 41 bom. l.r. 1258, considered.;alagirisubba naik v. official receiver of tinnevelly (1931) i.l.r. 54 mad. 989, maung po sai v. the bank of chettinad, ltd. (1935) i.l.r. 13 ran. 717, and kallukutti parambath perachan v. puthen peetikakkal kuttiali (1925) 49 m.l.j. 595, referred to.;the right to contest in appeal an order of adjudication of a person as an insolvent is not a purely personal right of the insolvent with the effect that the appeal abates on his death. the maxim actio personalis moritur cum persona..........babubhai sakerlal, who was the father of the present opponents, was adjudicated insolvent, but in appeal the district judge set aside the order of adjudication. pending the appeal to this court, which was brought by the petitioning creditors against the order of the district judge, babubhai died, leaving two sons who have been brought on record as his heirs. the learned advocate who appears for these heirs has taken a preliminary objection that the appeal is not competent. he argues firstly that the appeal has abated, and secondly, that no second appeal lies under the provisions of the provincial insolvency act.3. order xxii, rule 4, civil procedure code, 1908, provides, so far as is material, that when a defendant dies and the right to sue survives, the court, on an application made in.....
Judgment:

Broomfield, J.

1. This is a second appeal which purports to be bfought under Section 75 of the Provincial Insolvency Act.

2. One Babubhai Sakerlal, who was the father of the present opponents, was adjudicated insolvent, but in appeal the District Judge set aside the order of adjudication. Pending the appeal to this Court, which was brought by the petitioning creditors against the order of the District Judge, Babubhai died, leaving two sons who have been brought on record as his heirs. The learned advocate who appears for these heirs has taken a preliminary objection that the appeal is not competent. He argues firstly that the appeal has abated, and secondly, that no second appeal lies under the provisions of the Provincial Insolvency Act.

3. Order XXII, Rule 4, Civil Procedure Code, 1908, provides, so far as is material, that when a defendant dies and the right to sue survives, the Court, on an application made in that behalf, shall cause the legal representative of the deceased defendant to be made a party. If the right to sue does not survive, then the suit abates. In the case of an appeal the question is whether the right to appeal survives, and prima facie, apart from authority, it would seem to be clear that the right to appeal does survive in a case like the present. If the appeal were to succeed, the effect would be to hold that the insolvent was properly adjudicated by the trial Court. So that, even supposing that there were any difficulty about adjudicating a man insolvent after his death, no such question would logically arise.

4. Mr. Choksi, however, cited two decisions of the Lahore High Court in support of his view that the appeal abated. In Narain Singh v. Gurbakhsh Singh (1927) I.L.R. 9 Lah. 306, it was, held that an appeal preferred against the adjudication of an insolvent abates on his death, the reason given being that an order of adjudication is purely personal to the insolvent. Reference was made in the judgment to the provisions of Section 17 of the Provincial Insolvency Act which are as follows:

If a debtor, by or against whom an insolvency petition has been presented, dies, the proceedings in the matter shall, unless the Court otherwise orders, be continued so far as may be necessary for the realisation and distribution of the property of the debtor.

5. On the face of it that provision would seem to make it perfectly clear that proceedings in insolvency are not matters purely personal to the insolvent, and we understand that the English practice is that an order of adjudication may be made after the death of an insolvent. For some reason which is not clear to us the Court in Narain Singh v. Gurbakhsh Singh was of opinion that Section 17 had no bearing upon the question whether the appeal had abated. This case was followed by a single Judge in Attar Chand V. Mohammad Mobin (1931) I.L.R. 13 Lah. 396.

6. A different view has been taken by the Allahabad High Court in Piare Lal V. Muhammad Salamatullah Khan [1937] All. 616, where it was held that the right to contest an order of adjudication was not a purely personal right of the insolvent with the effect that the appeal would abate on his death. The maxim actio personalis moritur cum persona, it was said, had no application to insolvency proceedings. Reliance was placed on Section 17 of the Act and also on the English practice. We have no hesitation in accepting the view of the Allahabad High Court in preference to that taken in the cases cited from Lahore, and we think that there is no substance in the argument that the appeal has abated.

7. In order to understand the argument that no second appeal lies it is necessary to refer to two sections of the Act, viz. Section 75 and Section 4, the provisions of which are as follows:-

75. (1) The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District Court may appeal to the District Court, and the order of the District Court upon such appeal shall be final:

Provided that the High Court, for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit:

Provided, further, that any such person aggrieved by a decision of the District Court on appeal from a decision of a subordinate Court under Section 4 may appeal to the High Court on any of the grounds mentioned in Sub-section (1) of section 100 of the Code of Civil Procedure, 1908.

(2) Any such person aggrieved by any such decision or order of a District Court as is specified in Schedule I, come to or made otherwise than in appeal from an order made by a subordinate Court, may appeal to the High Court.

(3) Any such person aggrieved by any other order made by a District Court otherwise than in appeal from an order made by a subordinate Court may appeal to the High Court by leave of the District Court or of the High Court.

(4) The periods of limitation for appeals to the District Court and to the High Court under this section shall be thirty days and ninety days, respectively.

4. (1): Subject to the provisions of this Act, the Court shall have full power to decide all questions whether of title or priority, or of any nature whatsoever, and whether involving matters of law or of fact, which may arise in any case of insolvency coming within the cognizance of the Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case.

(2) Subject to the provisions of this Act and notwithstanding anything contained in any other law for the time being in force, every such decision shall be final and binding for all purposes as between, on the one hand, the debtor and the debtor's estate and, on the other hand, all claimants against him or it and all persons claiming through or under them or any of them.

(3) Where the Court does not deem it expedient or necessary to decide any question of the nature referred to in Sub-section (1), but has reason to believe that the debtor has 'a saleable interest in any property, the Court may without further inquiry sell such interest in such manner and subject to such conditions as it may think fit.

8. It is clear from the second proviso to Section 75(i). that no second appeal lies unless the order appealed against can be said to be an order passed under Section 4.

9. A similar question was considered by Mr. Justice Divatia in Gopikabai v. Chapsi : AIR1935Bom80 . He took the view that Section 4 comprises adjudication of those questions which, to speak in the language of English law, arise in bankruptcy and not outside bankruptcy.

10. 'In other words', he said, 'in my opinion, it covers questions such as disputes between the debtor's estate represented by a receiver on the one hand and the claims of one or all of his creditors on the other or other questions of priority or title' (p. 1239). .

He referred to the provisions of Sub-section (2) of Section 75 which indicate the sort of questions intended to be covered by orders under Section 4, viz. questions between the debtor and the debtor's estate on the one hand and, on the other hand, all claimants against him or it and all persons claiming through or under them.

11. In our opinion the words 'in any case of insolvency' in Section 4 lend considerable support to this view. According to the ordinary and natural use of language, no case of insolvency properly arises until after an order of adjudication, and the question whether such an order should or should not be made is not, properly speaking, a case of insolvency. Mr. Justice Divatia was of opinion that the words 'of any nature whatsoever' in Section 4 are to be read as ejusdem generis with the preceding words 'questions of title or priority '. That view, with respect, we find ourselves unable to accept, and in Dattatraya Chandraya v. Bawachekar : AIR1940Bom51 , Mr. Justice N.J. Wadia and Mr. Justice Indarnarayan held, following Alagirisubba Naik v. Official Receiver of Tinnevelly (1931) I.L.R. 54 Mad. 989, that these words 'of any nature whatsoever' are incompatible with the ejusdem, generis rule of interpretation. This, however, does not affect the main grounds of decision in Gopikabai's case. Dattatraya Chandraya v. Bawachekar was a case in which the question was whether a second appeal lay from an order made by a Subordinate Judge under Sections 53 and 54 of the Provincial Insolvency Act. The Court held that no second appeal lay, the reason being that Section 4 is subject to the other provisions of the Act, as expressly stated therein, and therefore was not intended to apply to cases which are specifically provided for by other sections, for instance Sections 53 and 54. The same view has been taken by the Madras High Court in Alagirisubba Naik v. Official Receiver of Tinnevelly where it was held that 'subject to the provisions of this Act' in Section 4 mean 'excluding questions otherwise provided for by the provisions of this Act', and that ruling was followed in Maung Po Sai v. The Bank of Chettinad, Ltd. (1935) I.L.R. 13 Ran. 717. That was a case in which a second appeal was presented against an order of adjudication passed on appeal by the District Court under Section 27. That is the converse of the present case, and Mr. Justice Dunkley said that the appeal did not lie and that where an order is made and can be lawfully made under some other section of the Act Section 4 has no application to that order. The reasoning in these cases would seem to apply just as much to an order under Section 27 as to one under Section 53 or 54 of the Act.

12. Learned counsel for the appellants has not been able to cite any authority in support of the view that a second appeal does lie in a case of this kind. He mentioned some observations in the judgment of Mr. Justice Ramesam in Kallukutti Parambath Perachan v. Puthen Peetikakkal Kuttiali : AIR1926Mad123 . The learned Judge said (p. 598):

The words' of any nature whatsoever' in Section 4 of the new Act show that all questions which arise in the course of insolvency may be dealt with by the Court for the purpose of doing complete justice and in such a case a Second Appeal lies to the High Court on a question of law.

13. The expression 'in the course of insolvency' presumably means the same as 'in any case of insolvency' in Section 4, and we find nothing in these observations which is inconsistent with the view taken by Mr. Justice Divatia in Gopika-bai v, Chapsi.

14. On either of these views, viz. the view that Section 4 refers to questions in bankruptcy and not outside bankruptcy, that is to say to questions arising after an adjudication has been made, and the view that Section 4 is limited to matters not otherwise specifically provided for in the Act, no second appeal would lie in the present case. It is perfectly true that the expression in Section 4 'questions of any nature whatsoever' is in wide and general terms, but obviously they must be limited in some way; otherwise the first clause of Section 75 which states that the order of the District Court upon appeal shall be final would be rendered nugatory. We think that the generality of the words must be limited as laid down in the cases to which I have referred and that the orders with which we are concerned in the present case cannot be regarded as orders made under that section.

15. Finally on behalf of the appellants reliance was placed on the first proviso to Section 75, which is that the High Court for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such orders with respect thereto as it thinks fit. this Court therefore has power in a proper case to interfere with appellate orders of the District Court in revision. But we have looked at the judgment of the District Judge which shows what the issues were. We think that, though some questions of law might arise, it was substantially a dispute as to matters of fact and we cannot see any sufficient reason why, when no appeal lies, this Court should interfere in revision.

16. The preliminary objection is therefore allowed and the appeal dismissed with costs as incompetent.


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