Upendralal Waghray, J.
1. This writ petition has been referred to a Bench by Amareswari J., as there is no direct decision of this Court on the question raised, and there is conflict in some decisions of the Madras High Court and also a judgment of the Kerala High Court.
2. The principal question for consideration is 'whether a person who was adjudicated an insolvent and subsequently due to his failure to apply for discharge in time, the said adjudication was annulled, is disqualified for election as a Councillor of Municipal Council in terms of Section 15 (2) (b) of the Andhra Pradesh Municipalities Act 1965?'
3. The facts giving rise to this writ petition lie in a very narrow compass. The writ petitioner and the 2nd respondent were the only contestants for the election of a Councilor from a general seat of the Ninth Ward of Tuni Municipality in the election which took place on 9th Aug. 1981. After a poll, the writ petitioner was declared to have been elected. Thereafter, the 2nd respondent herein challenged the said election under the provisions of the Andhra Pradesh Municipalities Act 1965 by filing Original Petition 217 of 1981 on the file of the Election Tribunal viz., the Court of the Principal Subordinate Judge, Kakinada. The election was challenged on the ground that the returned candidate was disqualified from contesting the election in view of the provisions of Section 15 (2) (b) of the Andhra Pradesh Municipalities Act 1965 because he was an undischarged insolvent. The returned candidate was adjudicated an insolvent in O. P. 20 of 1976 on the file of the Court of the Subordinate Judge, Kakinada by its order dated 1-4-1977. He did not apply for a discharge and subsequently, by an order dated 27-9-1980 (Ex. A-4), the Court annuled the insolvency under Section 43 of the Provincial Insolvency Act, since he did not apply for discharge within the stipulated time nor did he apply for extension of time. In addition to this, some corrupt practices were also alleged against the returned candidate in the election petition. The election petition was contested by the returned candidate on various grounds including that he was not an undischarged insolvent within the meaning of the Provincial Insolvency Act and he was, therefore, not disqualified. It was further contended by the returned candidate that, as the objection about disqualification was not raised at the time of scrutiny of the nomination papers, the election-petitioner was precluded from raising this dispute in the election petition.
4. The Election Tribunal, after enquiry, by its order dated 23rd August 1982 held that the returned candidate was disqualified and hence his election was set aside, and as there were only two contestants, it gave a further declaration that the election-petitioner was elected to the said seat. On the question of corrupt practices, the Tribunal found against the election-petitioner. The returned candidate has challenged the said order in the present writ petition.
5. Sri Poornaiah, the learned counsel for the writ petitioner, has urged three grounds in support of the writ petition viz., (i) the conclusion of the Election Tribunal that the returned candidate was disqualified under Section 15 (2) (b) of the Andhra Pradesh Municipalities Act 1965 is not correct; (ii) in view of the fact that the objection about disqualification of the returned candidate was not raised at the time of scrutiny, the said objection cannot be raised in the election petition; and (iii) the Tribunal has erred in granting a declaration that the election-petitioner was declared to have been duly elected.
6. We shall first deal with the principal contention viz., whether the election of the returned candidate is liable to be set aside on the ground he is disqualified in terms of Section 15 (2) (b) of the Andhra Pradesh Municipalities Act?
7. The learned counsel for the petitioner has referred to the relevant provisions if the Andhra Pradesh Municipalities Act particularly, S. 15 and the provisions of the Provincial Insolvency Act particularly Sections 27, 35, 37, 41, 43, 44 and 73 thereof. He has relied upon the decisions reported in Kamireddi Thimmappa v. Devasi Harpal, AIR 1929 Mad 157, and Chinniya Pillai v. Sunnarathnam Pillai, (1940) 52 Mad LW 527 : ( AIR 1941 Mad 22). Both these cases are under the Insolvency Act, and deal with the effect of an order of annulment. The ratio of the said cases is that, once an insolvency is annulled, whether under Section 35 or Section 43 of the Provincial Insolvency Act, the state of insolvency of the person adjudicated an insolvent comes to an end. The submission of the learned counsel for the returned candidate is, in view of the fact that the state of insolvency of the returned candidate had come to an end by an order of annulment, there is no question of his answering the description of an undischarged insolvent within the meaning of Section 15 (2) (b) of the Andhra Pradesh Municipalities Act, for suffering any disqualification.
8. Election to the Municipal Council being a statutory right, the disqualification as well as the challenge to the election will have to be looked into and worked out only in the light of the statutory provisions. Any other concept will not be germane for the same. The Andhra Pradesh Municipalities Act 1965 deals with the subject of local bodies, which is a State subject and the Act having received the assent of the President of India by virtue of the provisions of Article 254 of the Constitution of India, it will prevail over any Central Laws in the Concurrent List like the Insolvency Law.
9. The learned counsel fro the writ petitioner brought to out notice two cases of the Madras High Court reported in H.R. E. Board v. Nallathami Ayyaswami, AIR 1954 Mad 88 and Narayanaswami v. Srinivasan, (1966) 2 Mad LJ 315 as well as the decision of the Kerala High Court reported in Koman Nambiar v. Narayanan Mabiar. ILR. (1958) Ker 215 and has submitted that they have been wrongly decided. The later two eases rely upon the first case reported in H. R. E. Board v. Nallathami Ayyaswami (AIR 1954 Mad 88) supra, All the said cases deal with the question of disqualification of a candidate for appointment as a hereditary trustee or for a local body election, and the provisions regarding disqualification are similar to the provisions, under the Andhra Pradesh Municipalities Act. Those cases have taken the view that, if unsolvency has been annulled because of the default on the part of the insolvent to apply for discharge in time, he appropriate to give him any advantage. Unfortunately, none of the three cases have referred to the earlier two decisions of the Madras High Court referred to above.
10. On the other hand, Sri M.S.R. Subrahmanyam, the learned Counsel for the election-petitioner, contends that the view taken by the Madras High Court in H.R.E. Board;s case (AIR 1964 Mad 88) and the two subsequent decisions relying upon the said decision, is correct. The Election Tribunal has also relied upon the said judgement. He has further contended that, in addition to the disqualification under Section 15(2) (b) of the Andhra Pradesh municipalities Act, the returned candidate is also disqualified in view of Section 73 of the Provincial In solvency Act.
11. So far as the second submission or the Counsel for the respondent regarding the disqualification under Section 73 of the Provncial Insolvency Act is concerned, we find that it has not been raised in the election petition. Moreover, it is matter which required further investigation including the effect of the State Law; which has received the Predident's assent, in the previous Central Law in Concurrent List, and questions whether the Ahdhra Pradesh Municipalities Act containg a complete code and wanted to narrow down the scope of disqualification.
12. In view of the above and because this plea was not raised in the election petition, nor was it the subject matter in issue or decision by the Election Tribunal, we do not think it appropriate to allow it to be raised at this stage.
13. The question of disqualification has to be decided with reference to the Pradesh Municipalities Act 1965, The preamble of the Act shows that it is an Act to consolidate and amend the law of Municipalities within the State. It should be looked at as a Code for the Law relating to the Municipalities in the State. It provides for various matters including election of Councillors, their disqualification, and mechanism for deciding election disputes. Section 15 provides for the disqualification of candidates for being elected as municipal Councillors. These mentioned is Section 14 of the Act. According to Section 15, a person who is sentenced by a criminal court for certain offences and undergone imprisonment is also disqualified. However, the same Section provides that the disqualification shall be limited for the period during which the person undergoes the sentence of imprisonment and for the period of five years thereafter. This implies that some specified period or time-frame is also contemplated while providing for certain disqualifications. A person being a debtor, or his incapacity to pay debts is not a disqualification under the said Section. However, a person who is a debtor who has applied to be adjudicated an insolvent and also an undischarged insolvent are disqualified under Section 15(2)(b) of the Andhra Pradsh Municipalities Act.
14. the provisions of Section 16 of the Andhra Pradesh Municipalities act have also to be noticed. It provides that a Councillor, who has already been elected and is holding the office, shall cease to hold his office on the happening of certain events, Section 16(j)(d) provides that if a Councillor applies to be adjudicated an insolvent or is adjudicatied an insolvent, he shall cease to hold the office. This shows that the conduct of a persons who is holding an office of the Council in moving the Court for being adjudicated as an insolvent, as well as the circumstance that a Councillor has been adjudicated an insolvent is alos a the distinction which the Act has maintained in prescribing disqualifications for being a candidate for an election and disqualifications which will render an elected Councillor to case office. The difference in language in the two provisions is significant and would not support the contention that Section 73 of the Provcincial Insolvency Act would help in throwing light on the interpretation of the Municipalities Act. The Legislature appears to be conscious of the difference for disqualifications of differenf scope and nature than contemplated by Section 73 of Provincial Insolvency Act.
15. Under the Provincial Insolvency Act, a debtor whose debts amount to Rs. 500/- or who is under arrest or imprisonment in execution of a decree for payment of money or against whom and order of attachments in execution of a decree for payment of money or against whom an order of attachment in excution of such decree has been made, may apply to the Court for being adjudicated and insolvent, After a debtor is adjudicated and insolvent, his assets come within the control and purview of the Insolvency Court and he is afforded certain protection and immunities form arrest and his property being proceeded with in execution of decrees. Remedies by way of suits etc., cannot be taken against him. The state of insolvency begins from the date of adjudication and ends a) when a discharge is given by the Insolvency is annulled under the Act. An order of annulment of adjudication of insolvency may be passed under Section 35 or Sec. 43, of the Act, annulment under Section 35 is ordered where a debtor cught not to have benn adjudicated as insolvent, or incase debts of the insolvent have been paid in full. According to Section 43 of the Act, if debtor does not apply for an order or discharge within the period specified by Court, or does not appear when application for discharge comes up for hearing, the Court may annul the insolvency. The latter provision is apparently a measure of penalty for any default on the part of insolvent so that he does not enjoy any immunities or safeguards provided by his continuing as an insolvent. However, the effect of annulment, whether made under the provisions of Section 35 or Section 43 of the Act, is the same, viz., those provided under Section 37 of the Act. The person is restored back to the original position of a debtor before he was adjudicated and insolvent. It has also been so held in the two cases of the Madras High Court reported in Kamireddi timmappa v. Devasi Harpal, (AIR 1929 Mal 157) and Chiniya pillai v. Subbaratnam Pillai (AIR 1941 Mad 22) (supra). The annulment does not have any other effect; it may be where properties have been taken possession of by receiver pursuant to an order of adjudication, insolvency proceedings may continue for that limited purpoe of dealing with the property. But the debtor will not be an insolvent under the Act. Once it is held that a question of his answering the description of an undischarged insolvent. The disqualification under Section 15 (2) (b) of the Act, in its second part, is attached to an undischarged insolvent. A perosn who is not and insolvent cannot answer the description of being and undischarged in solvent. In view of this, it cannot be said that he is disqualified under the said provisions. Unfortunately, this aspect of the matter and the said two cases of the Madras High Court, one of which is a Division Bench decision, were not brought to the notice of the learned single Judge who decided the case reported in H.R.E. Board v. Nallathambi Ayyaswami, (AIR 1954 Mad 88) (supra). It was a case relating to disqualification arising from being and undischarges insolvent for being a hereditary trustee. In that case also, the debtor was adjudicated and insolvent and subsequently his insolvency was annulled because of the default on his part to apply for discharge in time. The learned Judge has made an distinction between the annulment as result of an order under S. 35 and and annulment as a result of an order under Section 43 of the Act. We are afraid, the Act does not make any such distinction between the two. The learned Judge alos felt, probably on moral grounds
' I consider it very irregular, to say the least of it, in this view of annulment under Section 41, Presidency Towns Insolvency Act, for the Board ever to appoint as a hereditary trustee a person who has been adjudicated an insolvent and whose adjedication has been annulled because he has not performed his elementary obligation under the Act of even applying for his discharge within the time prescribed'.
This view of the learned Judge of the Madras High Court has been followed in another judgment of the Madras High Court reported in Narayanaswami v. Srinivasan, (1962-22 Mad LJ 315) (supra, and a judgement of the Kerala High Court reported in Koman Nambiar v. Narayanan Nambiar, ILR (1958) ker 215 (supra). The learned judges of the Kerala High Court observed :
' It would shock the Court's conscience to hold that a person whose adjudication has been annulled under Section 43 will so far as the civil or citizenship rights are concerned be in a better position than a person whose application for adjudication is pending or whose application for discharge is pending or to whom an order for discharge absolute or conditional, has been granted without a certificate as contemplated by the latter part of Section 73(2)(b)'.
16. We do not think it appropriate to import the concept of disqualification under Section 73 of the Act, or to seek guidance form the said section for interpreting disqualification imposed by Section 15 (2) (b) of the Municipalities Act. As already stated, we are concerned with the disqualification imposed by the terms of Section 15 (2) (b) of the Municipalities Act. When a Law dealing with the subject of Local Bodies and which has received the assent of the President, has made a specific provision regarding disqualification, it may not be appropriate to look for its interpretation to an enlarged area of disqualification that what is permissible by statute. Election to local bodies is a creature of statute. Right to contest and right to hold office are all creatures of statute. There is no scope for ethical values to be involved in ascertaining what the scope and meaning of the disqualification under the statutory provisions are. It is for the Legislature to provide disqualifications having wider or narrower scope and also to provide for time-frame during which disqualification is to operate. Having regard to the terms of Section 15 (2) its is difficult to hold that a person who is not an insolvent can answer the description of a specie of 'insolvent' viz., and undischarged insolvent. An annulment of the order or adjudication of insolvency, passed under whatever section of the Act, has the same statutory effect of effacing the State of insolvency. It may be that a debtor continues to be in a position of not discharging his debts or that his actions which led to his indebtedness may by reprehensible but the same would not be relevant for deciding the question whether he is disqualified to contest for the election being held under the statute. As already observed, the earlier two decisions of the Madras High Court have not been noticed by any of the three judgments which have taken the view that an annulment of insolvency under Section 43 of the Provincial Insolvency Act will still make a person disqualified for contesting election. We therefore, do not agree with the view expressed in those three cases. The writ petitioner, who is the returned candidate, is not disqualified form contesting the election as Municipal Councillor under the provisions of Section 15 (2) (b) of Ahdhra pradesh Municipalicities Act. In view of this the conclusion reached by the Election Tribunal has to be set aside. As we have held that the petitioner is not disqualified, we have not gone into the two other questions raised by the learned counsel for the writ petitioner viz., whether in view of the fact that this objection as to disqualification was not raised by the election-petitioner at the time of scrutiny, he ought not to be permitted to raise the same now; and that, in the circumstances of the case, the Election Tribunal was not justified in granting the relief that the election petitioner is entitled to a declaration that he is duly elected.
17. In the result, the writ petition is allowed and the order of Election Tribunal in O.P. No. 217 of 1981 is quashed. The Election Petiton viz., O.P. No. 217 of 1981, filled by the 2nd respondent herein, is dismissed.
18. In view of the conflict of judicial decision which has given rise to this controversy, we do nit award any costs in this writ petition. Advocate's fee Rupees 200/-
19. Petition allowed.