1. Umrao Singh appeals from the order of the District Judge of Kanpur dismissing his application for getting the benefit of Section 17, U.P. Debt Redemption Act, No. XIII of 1940.
2. The appellant was adjudicated insolvent some years ago and the official receiver was ordered to administer his property. For some time, the proceedings for realisation of his assets remained stayed under the Temporary Postponement of Execution of Decrees Act [Act X of 1937]. On the expiry of that Act, the official receiver proceeded to sell the Zamindari property of the appellant Thereupon the appellant filed an application before the Court to obtain benefit of Section 17, Debt Redemption Act. This application was rejected by the Insolvency Judge on the ground that Section 17, Debt Redemption Act did not apply to insolvency proceedings and only applied to execution of Civil Court decrees. The appellant went in appeal before the District Judge who has upheld the order of the Insolvency Judge; hence this second appeal.
3. We are of opinion that the order of the Courts below is wrong. They have failed to consider the provision of Section 60(2), Provincial Insolvency Act, No. V of 1920. That sub-section reads as follows:
Nothing in this Act shall be deemed to affect any provisions of any enactment for the time being in force prohibiting or restricting the execution of decrees or orders against immoveable property; and any such provision shall be deemed to apply to the enforcement of an order of adjudication made under this Act as if it were such a decree or order.
4. It is clear that this provision in the Insolvency Act puts the adjudication order, on the basis of which the property vests in the official receiver, on the same level as a decree and, provides that any enactment for the time being in force prohibiting or restricting the execution of decrees would apply to the adjudication; order. We may, in this connection, refer to the case in Ram Rattan v. Fazal Haq 26 A.I.R. 1939 Lah. 346 in which also Section 60(2), Provincial Insolvency Act, came up for interpretation. The learned Judge observed as follows:
This sub-section is evidently intended to protect the interests of the insolvent by saving the application of enactments prohibiting or restricting the execution of decrees or orders against the immoveable property of the insolvent in the hands of the Receiver. If it were held that enactments prohibiting or restricting the execution of decrees or orders against the immoveable property of the insolvent will not apply to sale of property which has vested in the Receiver because the insovlvent is no longer the owner of the property, Section 60(2) will be practically rendered nugatory.
5. We agree with this view and hold that the application of the appellant should have been allowed.
6. We, therefore, allow the appeal, set aside the order of the Courts below and direct that the appellant should be given such benefit under Section 17, Debt Redemption Act as he is entitled to. In view of the fact that the respondents have not appeared, we order that the parties will bear their own costs throughout.