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Dr. Syed Maqsood Ali Vs. Smt. Zahara Begum and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 128 of 1976
Judge
Reported inAIR1978All434
ActsProvincial Insolvency Act, 1920 - Sections 9 and 47
AppellantDr. Syed Maqsood Ali
RespondentSmt. Zahara Begum and ors.
Appellant AdvocateH.N. Tillhari, Adv.
Respondent AdvocateChief Standing Counsel for Respondents Nos. 3 to 6
DispositionPetition dismissed
Excerpt:
(i) civil - deferred dower - section 9 (a) of provisional insolvency act, 1920 - deferred dower payable on dissolution of marriage - become debt only when it is becomes payable - not included in petition for insolvency under section 9 (a). (ii) secured debt - section 9 (a) read with section 47 of provisional insolvency act, 1920 - secured creditor released the security - right accrues to the debtor to include secured debt in his insolvency proceeding. - - he also contended that even if it was a deferred dower, it still remains a debt and it was open to the husband to pay it any time if he so liked......secured by a mortgage of a house. 2. unsecured loans:(i) smt. zahra begum, wife of the applicant-dower debt ......rs. 5000/- (ii) siddiq ahmad on pronote datedjanuary, 1965 ......rs. 2000/- (iii) sales tax department ......rs. 400/- he further alleged that he was not in a position to pay debts from his assets, his income was also quite low.3. the opposite parties filed objections. their contention was that the applicant had sufficient means to pay and he had not disclosed his entire property.4. the learned insolvency judge held that dower debt had not become due as there was no judicial separation end the wife was still living. he also held that the debt shown due to siddiq ahmad was also not due because it was a time barred debt.5. as regards the other debts to the state government he.....
Judgment:
ORDER

Mahavir Singh, J.

1. This is a revision against the order of the 1st Additional District Judge Unnao dismissing his appeal against the order of the Insolvency Judge rejecting his application for being adjudged an insolvent.

2. Relevant facts are that the applicant filed a petition under Section 10/13 of the Provincial Insolvency Act (hereinafter referred to as the Act) for being adjudged an insolvent. His allegations were that he was indebted to the extent of Rs. 11,900/-which comprised of the following four (sic) (five ?) debts:--

1. U. P. State through Deputy Commissioner

(i) District Industries Officer for starting an industry ......Rs. 4000/-

(ii) District Live Stock Officer, Unnaofor starting poultry farm ...Rs. 500/-Both the debts were secured by a mortgage of a house.

2. Unsecured loans:

(i) Smt. Zahra Begum, wife of the applicant-dower debt ......Rs. 5000/-

(ii) Siddiq Ahmad on pronote datedJanuary, 1965 ......Rs. 2000/-

(iii) Sales tax Department ......Rs. 400/-

He further alleged that he was not in a position to pay debts from his assets, his income was also quite low.

3. The opposite parties filed objections. Their contention was that the applicant had sufficient means to pay and he had not disclosed his entire property.

4. The learned Insolvency Judge held that dower debt had not become due as there was no judicial separation end the wife was still living. He also held that the debt shown due to Siddiq Ahmad was also not due because it was a time barred debt.

5. As regards the other debts to the State Government he held that the house on the security of which loans were taken was shown worth Rs. 7500/- at the time of the mortgage in 1964 and so the present value must have increased. This according to him was about Rs. 20,000/-Thus, he held that his liability did not exceed his assets end so he dismissed the petition.

6. In appeal before the learned District Judge the point argued was about the secured debts alone. The learned District Judge held that in view of Section 47 of the Insolvency Act, proceedings in respect of secured debts were not entertainable. Accordingly he dismissed the same.

7. In revision it is contended that the learned lower court had taken a wrong view of Section 47 of the Act. He also held that the Insolvency Judge was also wrong in holding that no dower debt would be due until a divorce took place.

8. So far as the first contention is concerned, that has no force. A debtor has no right to include the secured debt in his petition for insolvency unless the secured creditor released the security. Section 47 of the Act authorises a creditor to take part in the insolvency proceedings and he has three options under this section. He may in accordance with law applicable proceed to realise his debt from the security and if anything is left due, then he may come before the Insolvency court to prove the balance. The second option is that he may give up his security and then may come to the Insolvency Court to prove his debt along with other creditors. The third option is that he may value his security and then come to the Insolvency Court and prove his debt. The court may redeem his security according to the valuation given. The creditor will be entitled to receive dividend only in respect of the balance due to him after deducting the value so assessed. So until a secured creditor makes any of these options, it is not open to a debtor to include his secured debt in the petition for insolvency. The learned lower court, therefore, was right in holding that the petition was not maintainable in so far as it included the secured debts.

9. There then remained only three unsecured debts. The major portion of these debts included a dower debt worth Rs. 5000/- to the wife of the applicant himself. The learned Insolvency Judge was of the view that this debt was not payable at the time when the petition was moved. It becomes payable either on the death of the husband or on the dissolution of the marriage but none of those contingencies had taken place.

10. As regards the second point, the contention of the learned counsel for the applicant is that a dower is presumed to be prompt and so it becomes payable on demand unless there is contract to the contrary and so the dower in this case being prompt it was payable and not either on the dissolution of marriage or on the death of husband as was the view of the learned Insolvency Judge. He also contended that even if it was a deferred dower, it still remains a debt and it was open to the husband to pay it any time if he so liked. These contentions also have no force. From the Nikahnama on record it is clear that the dower was described as a deferred one. Thus it was not prompt. A deferred dower according to Clause 290 of the Mahomedan Law by Mulla 18th edition is payable on the dissolution of marriage on death or divorce. None of these contingencies arises in this case. So it was not payable. A dower becomes debt only when it becomes payable. Even a prompt dower which is payable on demand does not become debt until demanded. So the learned lower court was right in holding that the dower amount was not a debt and so it could not be included in the petition for insolvency.

11. The applicant has not challenged the view of the learned lower court with regard to the time barred debt on the pronote of 1965 in his revision petition. Otherwise also it is clear that although a time barred pronote remains a debt it is not recoverable. So when it is not recoverable, there will be no pressure on the applicant and it cannot be included in the petition for insolvency.

12. Even if it could be so included, the property in possession of the applicant appears to be of a greater value than the debt. The house of the applicant was mortgaged to secure certain debts. So even after paying of the secured debts there would remain enough balance for payment of this time barred debt and some other small dues. So the petition was rightly dismissed.

13. In the result, the revision has no force and it is dismissed with costs.


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