1. In this case the plaintiff sued for specific performance of a contract of sale or in the alternative to recover Rs. l,550 as damages. The learned Subordinate Judge, on December 22, 1923, held that the contract sued upon was for a sum of Rs. 7,000, and, therefore, he had no jurisdiction to try the suit, and ordered the plaint to be returned to the plaintiff. The plaintiff presented the plaint in the Court of the First Class Subordinate Judge on January 3, 1924. The First Class Subordinate Judge called upon the plaintiff to pay the deficit Court fees and granted time till January 10, 1924, and on that day the plaint was rejected with costs as the deficit Court-fees were not paid. On January 23, 1924, the plaintiff, through the same , Pleader who had filed the plaint in the First Class Subordinate Judge's Court, filed Miscellaneous Civil Appeal No. 5 of 1924 against the order dated December 22,1923, returning the plaint for presentation to the proper Court. The District Court was not informed of the fact that the plaint was returned to the plaintiff and was, as a matter of fact, filed in the First Class Subordinate Judge's Court, and was rejected for non-payment of the deficit Court-fees. The defendant was also ignorant of the fact that the plaint was rejected by the First Class Subordinate Judge, In the District Court the plaintiff confined his claim to the alternative relief of refund of Rs. 1,550. On July 10, 1924, the learned District Judge held that the alternative relief was within the pecuniary jurisdiction of the Second Subordinate Judge, and remanded the case for decision on the alternative claim. On remand the learned Second Class Subordinate Judge hold that, if the District Judge had been informed that the plaint was rejected by the First Class Subordinate Judge's Court on January 10, 1924, the order of remand would not have been passed, that it was on account of the fraud practised upon the District Court that the order had been obtained from that Court, that the plaint having been rejected by a Court having jurisdiction to entertain it, could not be proceeded with, and that the remedy of the plaintiff was to appeal against the order rejecting the plaint, which amounted to a decree, passed by the First Class Subordinate Judge. On appeal, the learned Assistant Judge held that the order of the Appellate Court not having been appealed against must be considered to be final, and the Subordinate Judge could not go behind the order of the superior Appellate Court, and was bound to proceed with the alternative claim. Against the order of remand an appeal has been filed in this Court.
2. A preliminary objection is taken on behalf of the respondent that the appeal filed by the defendant is a nullity as the appellant, who was adjudged an insolvent in October, 1926, was not competent to file an appeal on June 17, 1927, against the order of the Assistant Judge dated January 19, 1927. On October 8, 1928, by an interlocutory judgment of this Court, notice was served on the Official Assignee to ascertain whether he elected to be added as a party to this appeal. It appears from the communication of the Official Assignee that the order of adjudication was annulled on July 3, 1928. It is urged on behalf of the appellant that there is no objection to his proceeding with the appeal as the adjudication order has been annulled. The adjudication order was passed by the Bombay Insolvency Court and a reference is made to Section 18 of the Presidency Towns Insolvency Act under which power is given to stay proceedings against an insolvent by Sub-section (3). The appellant in this case was the defendant in the original suit and was the respondent in the lower Appellate Court. By reason of the adjudication of the defendant as an insolvent, the plaintiff ought to have made an application under Order XXII, Rule 10, of the Civil Procedure Code. See Puninthavelu Mudaliar v. Bhashyam Ayyangar 25 M. 406 . No provision has been pointed out to us which would prevent a person who has been adjudged an insolvent from filing an appeal against a decree passed against him. Under Section 17 of the Presidency Towns Insolvency Act, III of 1909, corresponding to Section 28, Clause (2), of the Provincial Insolvency Act, V of 1920, the property of the insolvent vests, in the Official Assignee on the making of the order of adjudication. It was, therefore held in Sayad Daud Sayad Mahomed v. Mulna Mahomed Sayad : AIR1926Bom366 that nothing is left in the insolvent to give him a cause of action and that a suit by an insolvent in his own name after his adjudication is not maintainable. The law with regard to the actions pending by or against an insolvent has been stated in Halsbury's Laws of England Vol. II, pages 135-136.
3. Under Order XXII, Rule 8, of the Civil Procedure Code, the insolvency of a plaintiff in any suit which the assignee or Receiver might maintain for the benefit of his creditors, shall not cause the suit to abate, unless such assignee or Receiver declines to continue the suit or (unless for any special reason the Court otnerwise directs) to give security for the costs thereof within such time as the Court may direct; and on the neglect or refusal of the assignee or Receiver to continue the suit or to give such security, the defendant may apply for the dismissal of the suit on the ground of the plaintiff's insolvency, and the Court may make an order dismissing the suit and awarding to the defendant the costs which he has incurred in defending the same to he proved as a debt against the plaintiff's estate. Order XXII, Rule 8, corresponding to a. 370 of the old Code, would apply to the case where there is actual bankruptcy or insolvency and in which an assignee or a Receiver is appointed and would not apply to a case where there has been an application for a declaration of insolvency and a vesting order is made but the proceedings are subsequently annulled and the plaintiff is not declared either a bankrupt or an insolvent: see Amrita Lal Mukerjee v. Rakhali Dassi Debi 27 C. 217 . Where, however, the plaintiff's name is struck off and the Official Assignee is substituted for the insolvent plaintiff and the adjudication is thereafter annulled, it was held in Khunni Lal v. Rameshar A.I.R. 1922 All. 361 that there being no limitation provided for the Official Assignee to appear and apply for substitution, or for the debtor to appear and apply for the restoration of his name on the record after the adjudication is annulled, the proceedings cannot, abate and must be deemed to continue. We think, therefore, that the appellant in this case after the annulment of the order of adjudication is entitled to continue the appeal. When an appellant after filing an appeal becomes insolvent, the Receiver may prosecute the appeal under Order XXII, Rule 8, read with Order XXII Rule 11. An insolvent may proceed with an appeal if it involves a personal question as to his status, or if the order appealed from prevents him from earning his living. See G. v. M (1885) 10 A.C. 171 . It has, however, been held in Kondapalli Tatireddi v. Biduvani Ramachcmdra Rao 62 Ind Cas. 854 that if during the pendency of a suit a party is adjudicated an insolvent, he is not disqualified by reason of his insolvency from appealing.
4. The insolvent was resisting in this appeal the alternative claim of Rs. 1,500. It was, therefore, for the benefit of his creditors that he was prosecuting the appeal in case there was a completed insolvency in which an assignee or a Receiver was appointed. In the present case, the adjudication of insolvency was annulled. We think, therefore, that the appellant is entitled to prosecute the appeal.
5. On the merits, we think that the plaint having been presented in the First Class Subordinate Judge's Court and having been rejected with costs, the Subordinate Judge, on remand, was justified in holding that there was no plaint in existence which could be proceeded with. The remedy of the plaintiff was to appeal against the order of the First Glass Subordinate Judge, rejecting the plaint which amounted to a decree. It is no doubt true that the District Judge remanded the case to the Subordinate Judge for disposal on the alternative claim with regard to the damages of Rs. 1,550. The plaintiff or his Pleader ought to have informed the District Court of the rejection of the plaint by the First Class Subordinate Judge, and the District Court passed the order in appeal in ignorance of this fact. Though the Subordinate Judge was bound to carry out the order of the District Judge, there was no plaint which could be proceeded with as it had already been rejected by the First Class Subordinate Judge on January 10,1924. We think, therefore, that the view of the Subordinate Judge, after remand, was correct.
6. We would, therefore, reverse the order of remand of the learned Assistant Judge and restore the decree of the Subordinate Judge with costs of this appeal and of the lower Appellate Court of the respondent-plaintiff.
7. Plaintiff's suit was for specific performance of a contract to sell him some property of Rs. 7,000 and in the alternative, for the return of his earnest money for Rs. 1,500 and the plaint was presented to the Court of a Second Class Subordinate Judge. It was returned for presentation to the proper Court, and on this being done, the plaintiff was given time to make up the requisite Court-fee and on his failure to do this, his suit was dismissed.
8. Plaintiff next appealed from the order of the Second Class Subordinate Judge, not disclosing the fact that his plaint had been dismissed by the First Glass Subordinate Judge, to the District Judge. He was successful in obtaining a remand to the Second Glass Subordinate Judge's Court, which it was held had jurisdiction to try his claim in the alternative, for return of the Rs. l,500 earnest money.
9. On the papers coming to the Second Class Subordinate Judge's Court, that Court held that, since plaintiff's claim as a whole had been dismissed by the First Class Subordinate Judge, and a fraud had been perpetrated on the District Judge by suppression of this fact, the order of remand was void and the plaintiff's remedy was to appeal from the First Class Subordinate Judge's order. There was another appeal to the District Court, which held that the Subordinate Judge was not empowered to enquire behind that Court's order. This is the finding now before us in appeal.
10. There is, however, a further complication. The defendant, now the appellant, was adjudged an insolvent in October, 1926. Notice was served on the Official Assignee, who has since informed this Court that the adjudication order was annulled on July 3,1928. It has been objected to the appeal that it does not lie, as when he made it the appellant was incompetent.
11. A preliminary question as to the competency of the appeal, therefore, arises. The proper course was to file an application under Order XXII, Rule 10, of the Civil Procedure Code, but this was not done.
12. The relevant sections are Sub-section (3) of Section 18 of the Presidency Towns Insolvency Act and Section 17 and Section 28, Clause (2), of the Provincial Insolvency Act. There is power under the former Act to stay civil proceedings against an insolvent, and under the latter his property vests in the Official Assignee, and it has been held in the case of Sayad Daud Sayad Mahomed v. Mulna Mahomed, Sayad : AIR1926Bom366 that an undischarged insolvent is not legally competent to file a plaint. The other cases on the point such as Khunni Lal v. Rameshar 64 Ind. Cas. 52 and Amrita Lal Mukerjee v. Rakhali Dassi Debi 4 C.W.N. 294 involve other points and are not exactly adjacent. But since a Receiver may prosecute an appeal, where an appellant is adjudged an insolvent after filing one, it would seem that a person adjudged an insolvent may also himself file an appeal. This has been held to be so in the Madras case of Kondapalli Tatireddi v. Biduvani Ramachandra Rao 62 Ind. Cas. 854 . It was there held by Spencer, J. that there is no authority for the assertion that an insolvent cannot file an appeal, and though there are words in Section 16 of the Provincial Insolvency Act which may be read as making insolvency the equivalent to civil death, it does not follow that an insolvent has no locus standi in civil proceedings. Ramesam, J., who concurred, based his decision on the fact that a person who is a party to proceedings in his own right, does not become disentitled to continue them, merely because his right has devolved on another, a principle which he considered was recognised in Order XXII, Rule 10, of the Code, the only exception being in Rule 8 of the same Order, which is limited to suits (see Rule 12) when the events there mentioned happen. Though this case has not been authoritatively reported, the reasoning above set out appears to me to be correct, and I agree that the appeal has been properly made.
13. On the main point, it seems clear that the plaint as a whole having been finally dismissed for non-compliance with the First Class Court's order, there was no further possibility of proceeding with it, and that the District Court's order was for this reason of no effect, having been made in ignorance of this fact. 1, therefore, agree that the learned Assistant Judge's order be reversed, and with the order as to costs.