Skip to content


Ajodhia Pershad Vs. Sari Ram and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1934All1011
AppellantAjodhia Pershad
RespondentSari Ram and anr.
Excerpt:
- - the endorsement showed that the judgment-debtor could not be found as his house in calcutta was shut up and his business had failed......8, either to a plaintiff or to an appellant, it is clear that the rule must apply to the case of a suit or an appeal which has already been filed before the insolvency occurs. in the present case the insolvency occurred before the appeal was filed and indeed before the suit was brought. the rule therefore cannot apply to the present case. further reference was made to the presidency towns insolvency act, section 52(2)(b). this merely provides for the official assignee exercise the powers of the insolvent over the property. in the case of mortgaged property the secured creditor has a right to deal with the mortgaged property without making any application to the insolvency court. the matter therefore of mortgage suits is one which lies apart from insolvency proceedings and although it.....
Judgment:

1. This is a first appeal from order by one Ajodhis Pershad against an order, dated 13th May 1933, by a learned Subordinate Judge of Aligarh refusing the applications of Ajodhis Pershad for restoration of a suit which had been decreed ex parte against him on 15th November 1932. A preliminary objection was taken by the decree-holder, the opposite party, to the effect that prior to the date of the suit the defendant had become an insolvent in Calcutta and an Official Assignee had been appointed to take charge of the property of the insolvent. The date of the order of the insolvency was 25th August 1932. The suit in question was a suit for recovery of money by sale on the basis of a simple mortgage. Now, learned Counsel for the respondent objector states that under Section 17, Presidency Towns Insolvency Act, on the making of an order of adjudication no creditor shall commence any suit without the leave of the Court. There is a proviso to that section which states:

Provided that this section shall not affect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with it is this section had not been passed.

2. For the decree-holder the argument is that the section requires that even in the case of a secured creditor, such as the decree-holder, he should bring a suit against the Official Assignee. The decree holder therefore according to the admission of his counsel broke the provisions of this Section 17, when he brought his suit against the mortgagor alone for enforcement of the mortgage by sale. He has now obtained a decree for sale. The objection, therefore, is that although the decree holder has broken Section 17, Presidency Towns Insolvency Act, he can still hold up that section as a bar against the defendant who desires to bring an appeal against the decision of the lower Court. It appears incorrect on general principles that a person who has broken a particular provision of law should be enabled by the same provisions of law to prevent the Courts of law from interfering in the matter. We refer to general principles because learned Counsel stated that he desired to argue on general principles. He also put up an argument on particular provisions of law and he referred to Order 22, Rule 8, Civil P.C. This rule provides that on the insolvency of a plaintiff in any suit which the assignee or receiver might maintain, the suit shall not abate unless the assignee or receiver declines to continue it. Under Rule 11, the provisions of the order apply 'so far as may be' to appellants. If however we apply Rule 8, either to a plaintiff or to an appellant, it is clear that the rule must apply to the case of a suit or an appeal which has already been filed before the insolvency occurs. In the present case the insolvency occurred before the appeal was filed and indeed before the suit was brought. The rule therefore cannot apply to the present case. Further reference was made to the Presidency Towns Insolvency Act, Section 52(2)(b). This merely provides for the Official Assignee exercise the powers of the insolvent over the property. In the case of mortgaged property the secured creditor has a right to deal with the mortgaged property without making any application to the insolvency Court. The matter therefore of mortgage suits is one which lies apart from insolvency proceedings and although it might be possible for an Official Assignee to apply to the Court to be made a party in a mortgage suit it would be seldom that it would be in the interest of the estate for the Official Assignee to take such action. Therefore on general principles if action is to be taken at all it is the insolvent himself who is the person to take action in regard to mortgage decrees. There is also the fact that in a mortgage decree there may ultimately be a personal liability imposed and that will be a matter with which the Official Assignee would not be concerned, but with which the insolvent would be concerned.

3. Learned Counsel desired to refer to certain rulings, but he admitted that none of those rulings deal with a question similar to the present case where the defendant, who was insolvent, desired to make an appeal. For these reasons we dismiss the preliminary objection. Now we come to the merits of the particular appeal. There are three grounds taken in the memorandum of appeal. Of these grounds appellant relies on : (1) that the application was not barred by time, and (2) that the Court below ought to have inquired into the question of mistake as alleged by the applicant and should have come to a definite finding on the point.

4. The circumstances are that the decree in question was passed ex parte on 15th November 1932. The decree-holder made an application for injunction on 10th January 1933, to prevent the judgment-debtor from transferring his property. On this it was ordered that notice should issue to the judgment-debtor and an endorsement on that notice shows that it was returned from Calcutta unserved by order of 2nd February 1933. In that notice the 16th February, had been fixed for hearing the application. The endorsement showed that the judgment-debtor could not be found as his house in Calcutta was shut up and his business had failed. On the 3rd March fees were deposited for service by registered post. We have not been able to find on the record the results of that service, but the judgment-debtor with his application of 13th May 1933, filed a copy of a notice which was served on him on 7th March 1933, according to his own account. The notice was issued on the 4th March and 23rd March was fixed. Now in the application for restoration filed by the defendant on 1st April 1931, and in the affidavits supporting that application the defendant has stated in para. 4 of each of these documents that it was on 7th February 1133, when he was served with a notice relating to the application of the decree-holders that he received information for the first time of the suit. On the 13th May, the defendant made an application to the effect that the 7th February, was written by error and that he meant to state that is was on the 7th March, that he was served with a notice and received information. On the same date of his application, 13th May 1933, the Court below passed an order on the subject in which it did not at all consider the effect of the notice produced by the defendant on that date which purported to show that the notice could not have been served on him on the 7th February, because the notice in question which he produced was dated the 4th March. We consider that it was the duty of the Court below to have taken evidence on this point and to have made an inquiry into the matter and to have come to a conclusion of fact as to whether the defendant had made a bona fide mistake or not. Instead of doing so the Court below based its decision on the admission of the defendant that he had knowledge on the 7th February, and as his application for restoration was dated the 1st April, the Court below held that the period of 30 days allowed by Article 164, Limitation Act, had elapsed and therefore that the application for restoration was time-barred. For these reasons we set aside the order of the lower Court and we return the case to the lower Court for inquiry and decision according to law. Costs hitherto incurred will abide the result.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //