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Shankar Ganesh Vs. Satara Swadeshi Commercial Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 624 of 1943
Judge
Reported inAIR1945Bom374; (1945)47BOMLR352
AppellantShankar Ganesh
RespondentSatara Swadeshi Commercial Co. Ltd.
Excerpt:
provincial insolvency act (v of 1920), sections 82 (b) and 9 - dekkhan agriculturists' relief act (xvii of 1s79), section 24-civil procedure code (act x of 1877), sections 344 and 349- decree-holder-application to adjudicate agriculturist debtor insolvent.;a decree-holder is entitled, under section 9 of the provincial insolvency act, 1920, to present an insolvency petition against an agriculturist judgment-debtor, notwithstanding section 82(6) of the act. - - 300. the next section 26 reads thus :notwithstanding anything contained in section 351 of the code of civil procedure, the court shall declare an agriculturist an insolvent if it is satisfied that he is in insolvent circumstances, and that the application to have him declared an insolvent has been properly made under section 344 of..........that the, application by his creditor to have him adjudged an insolvent was untenable under the dekkhan agriculturists' relief act as it was barred by section 82(6) of the provincial insolvency act. the learned subordinate judge accepted this contention and held that he had no jurisdiction to entertain the application. section 82(b) of the provincial insolvency act says that nothing in the act shall apply to cases to which chap. iv of the dekkhan agriculturists' relief act, 1879, is applicable. on appeal to the district court the learned assistant judge who heard the appeal held that the subordinate judge had jurisdiction and he accordingly remanded the case to the original court to be tried on merits. the argument of the learned assistant judge was on these lines. section 24 of the.....
Judgment:

Sen, J.

1. This is a revision application by a judgment-debtor against an order made by the Assistant Judge of Satara on appeal from an order made by the Subordinate Judge of Islampur in an insolvency petition made by the opponent, who is the assignee of a decree obtained in Suit No. 10 of 1930 against the applicant. The said assignee filed a darkhast in 1941. During the pendency of that darkhast he also filed an application (No 2 of 1941) in insolvency against the applicant judgment-debtor who is an agriculturist. The present applicant contended; that the, application by his creditor to have him adjudged an insolvent was untenable under the Dekkhan Agriculturists' Relief Act as it was barred by Section 82(6) of the Provincial Insolvency Act. The learned Subordinate Judge accepted this contention and held that he had no jurisdiction to entertain the application. Section 82(b) of the Provincial Insolvency Act says that nothing in the Act shall apply to cases to which Chap. IV of the Dekkhan Agriculturists' Relief Act, 1879, is applicable. On appeal to the District Court the learned Assistant Judge who heard the appeal held that the Subordinate Judge had jurisdiction and he accordingly remanded the case to the original Court to be tried on merits. The argument of the learned Assistant Judge was on these lines. Section 24 of the Dekkhan Agriculturists' Relief Act preserved to every Subordinate judge the powers conferred by Sections 344 to 359 of the old Code of Civil Procedure as modified by Sections 25 to 33 of the Dekkhan Agriculturists' Relief Act in dealing with applications under the Civil Procedure Code or under the Dekkhan Agriculturists' Relief Act to have an agriculturist debtor declared an insolvent. Those sections of the old Code were repealed by the Provincial Insolvency Act of 1907 which has now been replaced by the Provincial Insolvency Act of 1920. Accordingly the reference to Sections 344 to 360A of the old Civil Procedure Code in the Dekkhan Agriculturists' Relief Act must be construed as applying to the corresponding provisions of the Provincial Insolvency Act. The old Section 344 corresponded to Section 9 of the Provincial Insolvency Act under which a creditor can present an insolvency petition against a judgment-debtor on fulfilling certain conditions. All that Sections 25 to 33 of the Dekkhan Agriculturists' Relief Act amounted to was to give certain advantages to agriculturist debtors and they did not take away any of the powers of the Subordinate Judges in dealing with insolvency petitions. Relying on these arguments the learned Assistant Judge thought that Section 82(b) of the Provincial Insolvency Act was no bar to the present petition being entertained by the Subordinate Judge.

2. Mr. Dharap on behalf of the present applicant has contended, firstly, that no appeal to the District Court from the order of the Subordinate Judge lay, and, secondly, that it was not competent to the creditor opponent to present an insolvency petition against the judgment debtor. On the first point he has relied on Section 33 of the. Dekkhan Agriculturists' Relief Act, which says that no appeal shall lie from any order passed under Chap. IV except orders passed in exercise of the power conferred by Section 359 of the Code of Civil Procedure (corresponding to Section 69 of the Provincial Insolvency Act). The section undoubtedly says that no appeal from the order of the Subordinate Judge was competent to the District Court, but under Section 53 of the Dekkhan Agriculturists' Relief Act a revision lay to the District Judge on a question of legality or propriety of any order passed by a Subordinate Judge in any matter falling under Chapter IV of the Dekkhan Agriculturists' Relief Act. The question before the Assistant Judge was a question of jurisdiction of the trial Court and could very properly, therefore, form the subject-matter of revision. The order of the learned Assistant Judge may, therefore, be regarded as an order in revision and there was nothing irregular in his dealing with the question that was raised before him.

3. The second question is more important and difficult. Section 82(b) of the Provincial Insolvency Act makes it clear that the provisions of the Act will not apply, at least primarily or initially, to cases to which Chap. IV of the Dekkhan Agriculturists Relief Act is applicable, That Chapter is headed 'On Insolvency,' and is meant to apply to the cases of agriculturist debtors. Section 24 of the Dekkhan Agriculturists Relief Act is in these terms :

24. Every Subordinate Judge shall have the powers conferred by Sections 344 to 359 (both inclusive) of the Code of Civil Procedure, as modified by the provisions next hereinafter contained, for the! purpose of dealing with applications under the Code of Civil Procedure or under this Act to have agriculturists residing within the local limits of his ordinary jurisdiction declared insolvent and proceedings taken under orders passed under the second clause of Section 19 ; and, except as provided in Chapter VII of this Act, no such application or proceeding shall be dealt with by any other Court.

So far as the powers of the Subordinate Judges, therefore, are concerned, what is intended by this section is that they are to be found in Sections 344 to 359 of the old Code of Civil Procedure of 1877 and the sections of the Dekkhan Agriculturists' Relief Act under Chapter IV read together. The section speaks of the powers of the Subordinate Judge conferred by Sections 344 to 359 of the Code of Civil Procedure as modified by the provisions contained in Chapter IV. It is to be noted here that in connection with the said powers applications both under the Code of Civil Procedure and under the Dekkhan Agriculturists' Relief Act to have agriculturists declared insolvent are mentioned. Section 25 deals with applications made by agriculturist debtors to be declared insolvent, the provisions therein being more liberal than those contained in the old Code of Civil Procedure of 1877 or 1882 in that an agriculturist whose debts amount to fifty rupees or upwards is allowed to apply to a Subordinate Judge for being declared insolvent, the limit stated in the Code being Rs. 300. The next Section 26 reads thus :

Notwithstanding anything contained in Section 351 of the Code of Civil Procedure, the Court shall declare an agriculturist an insolvent if it is satisfied that he is in insolvent circumstances, and that the application to have him declared an insolvent has been properly made under Section 344 of the said Code or Section 25 of this Act.

The provisions of this section, again, are more favourable to an agriculturist debtor than those in Section 351 of the old Code wherein certain conditions are stated regarding which the Court had to be satisfied before it could declare the judgment-debtor an insolvent. The following sections, namely, Sections 27 to 32, deal with matters, like the Nazir's appointment as Receiver, proof of debts, management of the insolvent's property without the appointment of a receiver for the benefit of his creditors, secured debts, the insolvent's incompetence to alienate the property dealt with in Sections 29 and 30 and the discharge of the claims of the creditors. Section 33, the last section in Chapter IV, as I have already pointed out, relates to the bar of appeal from orders passed under Chapter IV.

5. In the year in which the Dekkhan Agriculturists' Relief Act was passed, namely in 1879, the Code of Civil Procedure in force was that of 1877. Sections 344 to 360 therein were the sections contained in Chapter XX, the heading of which was ' On Insolvent judgment-debtors'. Those sections provided the law in force at the time with regard to insolvency. Section 344 read thus :

Any person arrested or imprisoned in execution of a decree for money may apply in writing to be declared an insolvent.

Such application shall be made to the District Court which ordered his arrest or imprisonment, or when the District Court did not make such order, then to the District Court to which the Court that made the order is subordinate.

6. It will be seen that this section only enabled a judgment-debtor against whom a money decree had been passed to apply to be declared an insolvent, no corresponding power to apply having been given to the decree-holder. But by Act XII of 1879 Section 344 was amended, the following being substituted therefor:

Any judgment-debtor arrested or imprisoned in execution of a decree for money, or against whose property an order of attachment has been made in execution of such a decree, may apply in writing to be declared an insolvent.

Any holder of a decree for money may apply in writing that the judgment-debtor may be declared an insolvent.

Every such application shall be made to the District Court within the local limits of whose jurisdiction the judgment-debtor resides or is in custody.

This amendment, therefore, gave the right to the holder of a money decree for the first time to apply that the judgment-debtor' might be declared an insolvent. It should be noticed that the enactment of this amendment was prior to the enactment of the Dekkhan Agriculturists' Relief Act, which is Act No. XVII of 1879. Section 345 described the different matters which an application in insolvency should set forth, and Section 346 provided for the signature and verification of the applicant. The subsequent sections provided for service of the copy of the application, the powers of the Court, the procedure to be observed, the conditions on which the Court could declare a judgment-debtor to be an insolvent and other matters to be inquired into by the Court. Section 360 provided that the Local Government might, by notification in the official Gazette, invest any Court other than a District Court with the power conferred on District Courts by Sections 344 to 359 (both inclusive), and that the District Judge might transfer to any Court situate in his district and so invested any case instituted under Section 344.

7. Mr. Dharap has conceded that under Section 24 of the Dekkhan Agriculturists' Relief Act read with Section 344 of the old Civil Procedure Code a Subordinate Judge undoubtedly had power to entertain an application in insolvency, including applications made by creditors, and he has further conceded that so long as Sections 344 to 359 of the old Code remained in force and had not been repealed by the Provincial Insolvency Act of 1907, creditors had power to make applications in insolvency against agriculturist-debtors. But his contention is that after the passing! of the Insolvency Act of 1907, which has now been replaced by the Act of the same title of 1920, the power of decree-holders to apply against agriculturist-debtors by insolvency petition has been taken away. This contention rests on the following line of reasoning. We first start with the general bar provided by Section 82(b) of the Provincial Insolvency Act, namely that nothing in that Act, which has now taken the place of the provisions as to insolvency under the old Codes of Civil Procedure, applies to cases to which Chapter IV of the Dekkhan Agriculturists' Relief Act is applicable. When Sections 344 to 359 of the old Code were repealed by the Insolvency Act of 1907, the effect of Section 24 of the Dekkhan Agriculturists' Relief Act was that the reference therein to the said sections of the old Codes had to be read as reference to the corresponding provisions of the Insolvency Act. Now the reference in Section 24 of the Dekkhan Agriculturists' Relief Act to those sections is in these terms : 'Every Subordinate Judge shall have the powers conferred by Sections 344 to 359 (both inclusive) of the Code of Civil Procedure as modified, etc.' There is no reference there to the capacity of a decree-holder to apply in insolvency against an agriculturist debtor. That being so, Mr. Dharap has contended that though the Courts of Subordinate Judges had the power to entertain applications in insolvency including applications from decree-holders, the decree-holders ceased to have the power or capacity to make such applications. It seems to us, however, that on examination this argument will be found to be wanting in substance. This line of reasoning has led Mr. Dharap to contend that even where under the provisions of Chapter IV of the Dekkhan Agriculturists' Relief Act there may be some reference to the capacity of the decree-holder to apply in insolvency, as for instance in Section 26, it cannot be said that the creditor has at present got any right to proceed in insolvency against the agriculturist debtors. He has, therefore, been obliged to contend that the expression 'to have him declared an insolvent has been properly made' in the said section means an application by the debtor agriculturist and that the reference therein to Section 344 of the old Code is merely a remnant that has remained in the Dekkhan Agriculturists' Relief Act from the days prior to the passing of the Provincial Insolvency Act of 1907 when it did have some actual meaning in that it was competent then for decree-holders to make an application against an agriculturist debtor.

8. It seems to us clear, however, that the Legislature in enacting Chapter IV of the Dekkhan Agriculturists' Relief Act had not the intention of superseding any of the provisions of the Civil Procedure Code of 1877, but intended that several of those provisions should be modified in favour of the agriculturist judgment-debtor. It is true that in no part of Chapter IV of the; Dekkhan Agriculturists' Relief Act is the power of a decree-holder to file an insolvency petition against an agriculturist debtor expressly mentioned, the reason being that at the date of the enactment of the Act such a creditor had the power under the general provisions of the Code to file such a petition. It is clear, therefore, that Chapter IV was not intended to be a self-contained piece of legislation on the subject of agriculturist debtors' insolvency. This is shown by the reference to applications both under the Code and under the Act in Section 24. It is also shown by the language of Section 26 which refers to applications properly made under Section 344 of the Code or Section 25 of the Act. If it was the intention of the Legislature that decree-holders' right to file an insolvency petition should be taken away, one would have expected the Legislature (even bearing in mind the fact that the language of the Act has been repeatedly declared to be unhappy and cumbersome) to make a clear statement to that effect in one of the sections of Chapter IV; and it has been conceded by Mr. Dharap that for some years after the passing of the Dekkhan Agriculturists' Relief Act the power of the creditor to proceed in insolvency against an agriculturist debtor was a reality. Mr. Dharap has contended that though the Court may have the power to entertain a particular kind of application, still it is possible that the applicant may not be given or may not have the power or right to make an application of that kind. Such a contention appears to us to be clearly untenable. It seems to us that where a certain Court is invested with powers to entertain certain kinds of applications it necessarily implies that applications of that nature may be presented to that Court. If, therefore, Section 24 of the Dekkhan Agriculturists' Relief Act refers to powers under the old Civil Procedure Code relating to insolvency and says that such powers in relation to agriculturist debtors, as modified by the provisions of subsequent sections of that Chapter, will be exercisable by every Subordinate Judge, we do not think that it would be open to a party to contend that because there has been no express reference to the capacity of such party to make applications requiring the exercise of such powers, the making of such applcations is not warranted by Chapter IV. In our opinion, Section 26 in terms applies to the facts of this case. The reference to applications made under Section 344 can only mean that a decree holder is entitled to make an application that his agriculturist debtor be declared an insolvent. We do not think that this reference to Section 344 can be held to have become obsolete or to be the remnant of the piece of legislation which has become inoperative. If this part of Section 26 is to be given effect to, it must be because the judgment-creditor in this case could make the application that he has made. If the intention was that a decree-holder should not have the right to apply in insolvency, it would have been sufficient to state, in the latter part of Section 26, that the application to have the debtor declared insolvent has been properly made under Section 25 of the Act. The expression ' properly made ', in our opinion, must be held to mean under the provisions of Sections 345 and 346 of the Codes of 1877 and 1882, i.e. that the application must set forth the kind of contents mentioned in Section 345 and must be signed and verified in the manner required by Section 346.

9. There is no doubt that initially there is the bar of Section 82(b) of the Provincial Insolvency Act. But Sections 344 to 359 of the old Code being repealed, by operation of s, 8 of the General Clauses Act and Section 83(2) of the Provincial Insolvency Act references to old Code must be construed as applying to the corresponding provisions of the Provincial Insolvency Act. We think that such references cannot be considered as references merely to the actual words used in Section 24 and other sections of the Dekkhan Agriculturists' Relief Act. The references undoubtedly in Chapter IV to Sections 344 to 359 of the old Code are references to the whole law of insolvency as contained in those sections. In this view, the power of the creditor to make applications in insolvency must be regarded as saved by the present provisions of the Insolvency Act. We are, therefore, of opinion that the decree-holder was entitled under Section 9 of the present Insolvency Act to present an insolvency petition against the applicant. The learned Assistant Judge, therefore, was right in the view that he took regarding the jurisdiction of the original Court. The rule will, therefore, be discharged with costs. Costs in the trial Court will be costs in the cause.


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