Walsh and Ryves, JJ.
1. This is an appeal by a body of creditors against an order of the District Judge of Allahabad making a personal allowance to the insolvent out of his property for the support of himself and his family, under Section 66, Sub-section 2, of the Provincial Insolvency Act No. V of 1920. One difficulty in delivering a clear judgment in a case of this kind is that the enumeration of the appropriate sections has been altered from time to time by various Amending Acts. We will confine our observations to the sections of the present Act. Leave was required under the Act, as the counsel for the insolvent rightly objected, and was not applied for until a late stage of the proceedings, and the matter of leave was referred to the court hearing the appeal. As the case has been argued as one of principle, and appears to us to require careful consideration in view of certain existing decisions, we have granted the necessary leave, it being clearly a case in which it would have been granted if applied for at once by any court appreciating the point involved.
2. The insolvent is an engine driver on the East Indian Railway in receipt of a fixed salary of about Rs. 250 with various monthly allowances and accretions, due to over-time and other matters, which increase his monthly salary sometimes to nearly Rs. 500 and roughly to an average exceeding Rs. 400. The factors which must be taken into account in reducing this gross sum in order to arrive at the actual net income really enjoyed by the insolvent are not very clearly before us and, in the view which we take, do not become important. But these two facts may be stated as representing, at any rate, the minimum of what is shown, namely, that half his gross salary would be at least Rs. 200 and that the sum directed by the District Judge to be paid to the creditors, namely, Rs. 120, is certainly less than any just estimate of the actual half of the net income actually enjoyed by this engine driver. As will appear, when we come to consider the relevant sections, the expression, 'directed to be paid to the creditors', is not really an accurate method of expressing it. A more accurate method is that the learned Judge has granted an allowance, out of the property prima facie divisible amongst the creditors, amounting to such a sum as when deducted from, his half salary leaves a balance of Rs. 120 divisible amongst the creditors.
3. There is no doubt that in the case of a person in India in receipt of a salary or pension, the maximum which is divisible amongst the creditors is half. That maximum is fixed by statute. Section 28, the ordinary vesting section, makes the whole of the property of the insolvent, on adjudication, divisible amongst the creditors, but excepts, by Sub-section 5, from the property so divisible, any property which is exempted by the Code of Civil Procedure from attachment. Section 60 of the Code of Civil Procedure, in the case of this engine driver, exempts half his salary from attachment. The combined operation, therefore, of Section 28(5) of the Provincial Insolvency Act and Section 60(i)(iii) is to make only half his salary divisible amongst the creditors. The creditors in this appeal contend that that amount is not only the maximum but the minimum; in other words, that the personal allowance which Section 60 of the Code of Civil Procedure leaves to the enjoyment of the ordinary debtor by exempting it from attachment, is the only sum which a court in insolvency can allow an insolvent under its jurisdiction to enjoy for the support of himself and his family. So stated, the contention sounds reasonable. But the difficulty of accepting it is this. Section 66, Sub-section (2), of the Provincial Insolvency Act provides that the court may from time to time 'make such allowance as it may think just to the insolvent out of his property for the support of himself and his family, and such allowance may, at any time, be varied or determined by the court.' If both the maximum and the minimum are fixed by statute, this provision is nugatory and might as well be struck out, of the Act in every case in which a man is earning his income by salary to which Section 60 of the Code is applicable. Indeed the contention is that this sub-section of the Insolvency Act is unworkable in the case of a person paid by salary, and; therefore, cannot be held to apply to him at all. But if it was intended to fetter the discretion of the insolvency court in the case of a man who is earning his money by salary, and his half salary was already protected by the operation of Section 60 of the Code of Civil Procedure, the Legislature ought to have said so. The argument really invites us to legislate, rather than to 'interpret. The language of the sub-section itself, namely, the use of the word 'property' without qualification, clearly includes that part of his property, or, in other words, his half salary, which by the joint operation of the two sections already referred to becomes divisible amongst the creditors under Section 28 of the Insolvency Act. Three cases have been cited to us which seem to support the contention of the creditors, although they may, if one were disposed to enlarge upon fine distinctions, be said to be not strictly in point. But in substance it does appear to have been decided that the amount which an insolvent may be allowed for maintenance is irrevocably fixed by Section 60 of the Code of Civil Procedure. We are not satisfied that either of the courts in the cases cited really intended to go to that length, although they used language which appears to produce that result. If they meant-that the amount fixed by Section 60 of the Code of Civil Procedure so fettered the discretion of the learned Judge that he could not depart from it, we find ourselves unable to agree with that view, because we think that it is equivalent to a refusal to apply the express language of Section 66, Sub-section (2). But really the argument pushed to its logical conclusion must come to this that, inasmuch as Section 60 fixes the sum both as regards maximum and minimum in all cases of salary, the Court of Insolvency has no jurisdiction under Section 66, Sub-section (2) to touch the matter. In other words, Section 60 has removed it from the Insolvency Court's cognizance, and that any attempt by the Insolvency Court to alter it by one pice would be ultra vires. That is the contention of Mr. L.M. Banerji, who is always logical, in pressing the view of the appellants, and that is the inevitable result of the argument, hut we are not satisfied that the Courts in the cases relied upon intended to go to that length.
4. It is only necessary to refer to the decision of our brother Rafiq in a revision case reported in Debi Prasad v. J.A.H. Lewis (1918) I.L.R. 40 All. 213. In that decision he followed and adopted the view taken in the two previous cases mentioned by him in his judgment, holding that section-60 of the Code of Civil Procedure had fixed the proportion immutably at half, and he did not consider what, under these circumstances, was the meaning which ought to be given by an Insolvency Court to Section 66, Sub-section (2). We hold that the law in India is precisely the same as in England on this matter. Indeed historically it is correct to say that the sub-section in question, namely, Section 66(2), is taken direct from the English legislation on the subject, and that the Insolvency Courts in this country, in spite of the fact that they cannot attach the half salary which is removed from the grasp of the creditors by Section 60, have an absolute discretion to make a further reasonable allowance, appropriate to the condition and the circumstances of the insolvent, out of the remaining half which is otherwise divisible amongst the, creditors, and that, on this ground,, the appeal fails.
5. We think it right to add that we entirely approve of the thoroughness and of the methods and considerations applied to the decision of the question, and of the result arrived at, by the learned Judge in. this case. In any event he is the best, and indeed, almost the only Judge, provided he has all the materials before him. His notes and his order alike show that he examined into the position very closely. He found, as is the case, that if the insolvent keeps up the payment, which he has hitherto done regularly, of Rs. 120 per month, all the creditors will receive payment in full within a period very little more than two years from the order of adjudication. If this ' happens, they will have done extremely well. It is very rare that in an insolvency creditors ever get paid in full at all, and it is largely due to the salutary provisions by which salary can be attached and deducted in this country, that in this particular case the creditors have a reasonable hope of being paid in full. It is not suggested that the insolvency has been brought on by any misconduct, or reckless conduct in the insolvency sense of these words, on the part of this engine driver. It looks as if he had fallen into the somewhat easy temptation towards extravagance in the ordinary affairs of life, such as dress and necessaries, although it is true there is one large claim by a money-lender, as the result of the conduct of the creditors themselves. Trades people who, either in the stress of business, or out of kindness of heart, encourage persons in a humble condition of life to go on purchasing on credit in a way which they must know is beyond their means, have only themselves to thank if, in the end, they lose their money altogether, and if they are merely delayed in payment, as these creditors seem likely to be, they suffer no loss, because the ordinary risks of trade which occur through bad debts and unwilling payers fall, as a rule, as every body knows, upon the honest customers who pay promptly, and whose charges must include the loss of the tradesman who would otherwise have to shut up shop. Nobody wishes to discourage a tradesman from giving credit, or such credit as he is satisfied the customer can stand, but a tradesman who continues to supply goods after it is obvious that the customer is unable to pay or unwilling to pay for the arrears which are due, brings upon himself such loss as he may suffer, and in our view a Judge, sitting in insolvency, has to consider these matters, that is to say, the conduct of the creditors, as well as the conduct of the debtor, in the general public interest, to serve which the bankruptcy law has been devised. On the whole we think the order complained of in this case was really generous to the creditors. At any rate there is nothing to complain about in it, and the appeal must be dismissed with costs.