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Alamelu Ammal Vs. T.S. Venkatarama Aiyar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1927Mad919; (1927)53MLJ422
AppellantAlamelu Ammal
RespondentT.S. Venkatarama Aiyar
Excerpt:
- .....the insolvency proceedings have come to an end since the respondent applied for and was refused a final discharge on 30th october, 1923. the petitioner put in a petition for review of that order which was dismissed on 15th march, 1924. the present execution petition was put in on 30th april, 1925. it is admitted that the respondent's adjudication has not been annulled.2. the question for decision is, does the refusal, under section 42 of the provincial insolvency act, of a final discharge ipso facto determine the insolvency proceedings? the lower court has held that it does not, and 1 agree. it is the order of adjudication which vests the property of the insolvent in the court or in the official receiver (see section 28). it would follow that until and unless that order is annulled the.....
Judgment:

Wallace, J.

1. This Civil Revision Petition is against the order of the Lower Court in a matter of execution. The petitioner put in an execution petition praying for the arrest of his judgment-debtor (respondent). The respondent urged that he is still an insolvent and that the proceedings in insolvency are still pending, that the petitioner has not got permission of the Insolvency Court to open execution proceedings against him and that therefore the petition is not maintainable. The respondent was adjudicated insolvent on 6th January, 1921. The petitioner, however, claims that the insolvency proceedings have come to an end since the respondent applied for and was refused a final discharge on 30th October, 1923. The petitioner put in a petition for review of that order which was dismissed on 15th March, 1924. The present execution petition was put in on 30th April, 1925. It is admitted that the respondent's adjudication has not been annulled.

2. The question for decision is, does the refusal, under Section 42 of the Provincial Insolvency Act, of a final discharge ipso facto determine the insolvency proceedings? The Lower Court has held that it does not, and 1 agree. It is the order of adjudication which vests the property of the insolvent in the Court or in the Official Receiver (see Section 28). It would follow that until and unless that order is annulled the property continues to vest in Court, and so long as that vesting remains, the insolvency proceedings cannot have come to an end. It would be absurd to hold that it was open to an execution-creditor without the permission of the Insolvency Court to arrest his judgment-debtor for not satisfying his decree-debt, when the assets of the judgment-debtor are not vested in him or under his control, and when the Official Receiver is still holding them for the benefit of the judgment-debtor's general body of creditors. Further, an order of refusal of a final discharge is not in itself necessarily final. There are cases in which it may not be final. For example, the final order of discharge may be refused because the insolvent's assets are less than eight annas in the rupee but the insolvent may subsequently come into property which would enable a dividend of more than eight annas to be paid and the Court might on that finally grant him an absolute order of discharge. Obviously, the insolvency proceedings must in such a case be pending after the first refusal to grant an absolute order of discharge. It is true that Act V of 1920 does not provide that the pendency of an insolvency proceeding shall be terminated in every case by annulment of adjudication. Such annulment is provided for by Sections 35, 36, 39 and 43. But these sections do not cover every possible case. It is clear from the scope of the Act that if a Court intends to bring the insolvency proceedings to an end and restore the status quo ante it must annul the adjudication. In every case where an order under Section 42 has been passed the Court might suo motu or on the motion of a creditor annul the adjudication, but until it is annulled the insolvency proceedings are still pending.

3. Another indication that this is the correct view is, that while under Section 37 the order annulling an adjudication must be published, there is no section which says that the order of refusal to discharge must be published. The purpose of publication is obviously to notify to the public that the insolvency has come to an end. If it came to an end by an order of refusal to discharge then it would be equally necessary to direct the publication of that order, That the Insolvency Court in the present case did not close the proceedings is clear from the fact that the petitioner himself received a dividend from the Official Receiver on 26th November, 1924, five months before his execution petition and 11 months after the order refusing absolute discharge. It is now suggested that the payment might have been sanctioned long before the order of refusal, but there is nothing on the record to warrant that suggestion..

4. There is a surprising lack of authorised reported rulings on this point of law. A case in Rangoon has been cited to the contrary. The ruling is by a single judge reported in Maung Po Take Maung Po Gyi (1925) ILR 3 Rang. 492. Another learned judge of the same Court has ruled to the contrary effect in Rowe & Co. Tan Thean Taik ILR (1924) Rang. 643, and 1 find myself in agreement with the latter's view.

5. It is not necessary to go into the further question as to whether the execution petition is barred by limitation. The Lower Court has made no error of law in holding that the insolvency proceedings were pending at the time of the execution petition and that Section 28 barred the application as no permission of the Insolvency Court was obtained. I therefore refuse to interfere and I dismiss the C.R.P. with costs.


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