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Kumari Rangappa Vs. Reddi Govinda Reddy and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.A.O. No. 124 of 1959
Judge
Reported inAIR1963AP228
ActsProvincial Insolvency Act, 1920 - Sections 28(2), 37, 43, 49, 72(2) and 78(2); Limitation Act, 1908 - Schedule - Article 182 and 182(5)
AppellantKumari Rangappa
RespondentReddi Govinda Reddy and ors.
Appellant AdvocateA.R. Krishna Swamy, Adv.
Respondent AdvocateC. Padmanabha Reddy, Adv.
DispositionAppeal dismissed
Excerpt:
.....by section 78 of the provincial insolvency act, two conditions have to be..........subsection. the appellant, he urged, had taken the objection that as the decree debt has not been proved in insolvency, there was left no occasion for the decree-holder to claim any exclusion of time under section 78(2). section 78 (2) is as follows :'where an order of adjudication has been annulled under this act, in computing the period of limitation prescribed for any suit or application for the execution of a decree (other than a suit or application in respect of which the leave of the court was obtained under sub-section (2) of section 28) which might have been brought or made but for the making of an order of adjudication under this act, the period from the date of the order of adjudication to the date of the order of annulment shall be excluded: provided that nothing in this.....
Judgment:

Syed Qamar Hasan, J.

1. This is a second appeal in execution preferred by the second judgment-debtor against the judgment and order dated 30-3-1959 of the Additional Subordinate Judge, Kurnool, who in his appellate jurisdiction affirmed the order of the District Munsif, Adoni, holding the E. P. 252/56 in O. S. No. 59/51 in time.

2. The facts are not much in dispute. O. S. 59/51 on the file of the District Munsif, Dhone resulted in a decree on 26-4-1952 against the appellant and the 3rd respondent and in favour of the 1st and 2nd respondents hereinafter to be referred to as decree-holders. Before any steps for execution were taken by the decree-holders, the appellant filed I. P. 26/53 in the Subordinate Judge's Court, Bellary. During the pendency of the insolvency proceeding, the decree-holder filed E. A. 18/53 on 27-1-1953 before the District Munsif, Dhone for transmission of the decree to the Court of the District Munsif, Adoni. The application was ordered and they filed E. P. 111of 1953 in the later but it was dismissed on 27-7-1953. The appellant was adjudged an insolvent on 13-10-1952 but the insolvency was annulled on 15-12-1954. Thereafter the decree-holders filed E. P. 252/56 on 23-4-1956. Despite receiving notice under Order 21, Rule 23 the first judgment-debtor preferred to remain ex parte. The appellant, however, resisted the application on the plea of limitation. That plea waselaborated by contending that E. A. 18/53 and E. P. 111/53 were filed during the pendency of the insolvency proceeding and no leave of the insolvency Court was obtained therefor as required by Section 28 (2) of the Insolvency Act; that the same cannot be regarded as an application in accordance with law or as step-in-aid of execution and therefore, E. P. 252/52 cannot be held to be within time. Further it was contended that the decree-holder was not entitled to the benefit of Section 78 (2) of the Insolvency Act since they had failed to tender evidence that he had proved his debt as required by the said Sub-section.

3. The District Munsiff held that Section 78 (2) of the Provincial Insolvency Act entitled the decree-holders to exclude the period from the date of the order of adjudication to the date of annulment. If the period is computed in the light of the said sub-section, E. P. 252/52 would be within time. With this view the Additional District Judge concurred. In the alternative he gave effect to the argument that since the E. P. was also against the first judgment-debtor, who was a solvent and not subject to any disability under the Provincial Act, Explanation I to Article 182 will also save time against the appellant.

4. The learned advocate argued that the Courts below have fallen into a manifest error in giving the benefit of Section 78 (2) of the Provincial Insolvency Act by ignoring the proviso to that subsection. The appellant, he urged, had taken the objection that as the decree debt has not been proved in Insolvency, there was left no occasion for the decree-holder to claim any exclusion of time under Section 78(2). Section 78 (2) is as follows :

'Where an order of adjudication has been annulled under this Act, in computing the period of limitation prescribed for any suit or application for the execution of a decree (other than a suit or application in respect of which the leave of the Court was obtained under Sub-section (2) of Section 28) which might have been brought or made but for the making of an order of adjudication under this Act, the period from the date of the order of adjudication to the date of the order of annulment shall be excluded: Provided that nothing in this section apply to a suit or application in respect of a debt provable but not proved under this Act. The scope of the sub-section has been considered in S. Sogmull Lachiram Firm, Tenali v. V. Parandhamayya, ILR 1941 Mad 136 : (AIR 1940 Mad 716). It has been held therein that before a party can claim the benefit of the exclusion enacted by Section 78 of the Provincial Insolvency Act, two conditions have to be satisfied: (1) the suit or application in which the limitation is pleaded must be in respect of a debt provable under the Act and (2) it must also have been proved under the Act. In a recent Bench ruling of our High Court reported in Yerramilli Radraraju v. Yavanamanda Suryanarayana Raju, : AIR1960AP257 the significance of the word 'proved' has been considered and it has been held that the word 'proved' in the proviso to Section 78 (2) is used in the technical sense of proof of debt for the purpose of claiming distribution in the assets of the insolvent before the Insolvency Court.

5. The learned advocate for the respondents-decree-holders was not able to show that any such proof as required by Section 49 of the Provincial Insolvency Act has been tendered in the Insolvency Court. In this state of affairs, it cannot be said that the decree-holders were entitled to take advantage of the time between the dates of adjudication and annulment orders. The finding of the Courts below on the question of exclusion of the time cannot be sustained. The other contention to bring the E. P. within limitation centered round the second part of the paragraph of Explanation I to Article 182 of the Limitation Act. That paragraph lays down that where the decree or order has been passed jointly against more persons than one, the application if made against one or more of them or against his or their representatives shall take effect against them all.

6. It is not disputed that no question of limitation arises so far as the first judgment-debtor is concerned. But it is argued that because the decree was joint the limitation would be saved by reason of the explanation above quoted against the second judgment-debtor, the appellant herein.

7. The learned advocate for the respondent relied upon Section 43 of the Act and referred to the pronouncement of the Full Bench in Subbaiah Goundan v. Ramasami Goundan, : AIR1954Mad604 . There it has been laid down that the effect of annulment is to vest the property retrospectively in the insolvent, in other words, the annulling of an order of adjudication is to wipe out altogether the insolvency and its effect except to the limited extent reserved under the Section. The argument on behalf of the respondent is that inasmuch as annulment is unqualified, the effect would be that both the judgment-debtors would be governed by the Explanation to Article 182. The contention on behalf of the appellant is that the Explanation is to be read with the provision of Section 78 (2) of the Provincial Insolvency Act because the same also prescribes how the period of limitation is to be computed when an order of adjudication has been annulled. No direct authority has been cited on one side or the other. The question is of sufficient interest and importance and I prefer to refer the case to Bench for an authoritative pronouncement instead of giving leave for a Letters Patent Appeal. Let the papers be placed before Bench.


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