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Rm. V. Vaithinatha Aiyar and ors. Vs. Kochi S. Vaithinatha Aiyar and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported in(1931)61MLJ544
AppellantRm. V. Vaithinatha Aiyar and ors.
RespondentKochi S. Vaithinatha Aiyar and anr.
Cases ReferredIn Marayya Chetty v. Sami Chetty
Excerpt:
.....contention were well founded. 108, where a partner sued for a debt due to the firm, making his partners defendants, it was held that the suit was effectively a suit by the firm, but that the plaint should be amended by describing the partnership firm as plaintiff. in that case the firm name was clearly used to indicate that it was a party, although in association with the name of one of the partners......partner of a firm of which vaithinatha aiyar is a member. that statement does not make vaithinatha aiyar a party to the petition. nor is he made a party by the fact that in the subsequent interlocutory applications in october and december to have viswanatha aiyar and vaithinatha aiyar made parties, 'the petitioner stated that he had instituted the insolvency proceedings as managing partner on behalf of his partners. reference has been made to three cases by the learned counsel for the creditors, viz., sheo lal sahu v. sagar mal (1917) 40 i.c. 108, marayya chetty v. sami chetty (1915) 2 l.w. 239 and in re hobbs (1892) 66 l.t. 144. but i do not think they serve to substantiate his point.13. in sheo lal sahu v. sagar mal (1917) 40 i.c. 108, where a partner sued for a debt due to the firm,.....
Judgment:

Cornish, J.

1. An Insolvency Petition was filed on the 27th August, 1929, against the debtors, who are the petitioners in this Civil Revision Petition. In the insolvency petition one Kochi S. Vaithinatha Aiyar is named as the petitioner. In para 4 of the petition it is stated:

Petitioner is the managing partner of a family firm consisting of himself and his first paternal cousins K. Vaithinatha Aiyar and Visvanatha Aiyar.

2. In para 9 are set out various acts of insolvency by the respondents on dates ranging from the 11th August to 13th August, 1929, within the period of three months from the date of the filing of the petition.

3. On the 16th September, K. Vaithinatha Aiyar made application under Section 16 of the Provincial Insolvency Act to be substituted for Kochi S. Vaithinatha Aiyar on the ground of Kochi's want of due diligence in proceeding with the petition; but this petition was dismissed as want of diligence had not been established.

4. On the 10th October Kochi applied to have his partner Visvanatha Aiyar added as a party to the petition, and this man was added as a respondent. On the 20th December Kochi made a further application to have his other partner Vaithinatha Aiyar made a party to the petition. This was dismissed on the ground that a creditor could not be made a party to the petition after the expiry of three months from the date of the act of insolvency.

5. The insolvency petition came on for hearing in March, 1930, and was dismissed, the Subordinate Judge holding that it was not maintainable on account of the non-joinder in the petition of all the partners of the firm to which the respondents were alleged to be indebted.

6. On appeal the Lower Court's order was set aside. The learned District Judge held that the power of the Court suo motu to add necessary parties in a fit case was unfettered, and he remanded the insolvency petition for re-hearing after the third partner, Vaithinatha Aiyar, had been made a party.

7. The principal question argued on behalf of the petitioners here (the debtors) is whether, having regard to Section 9 of the Provincial Insolvency Act, the amendment of the petition could be made. Section 9 (l) Clause (c) provides that a creditor shall not be entitled to present an insolvency petition against a debtor unless the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition. Reliance is placed on In re Maundy (1895) 1 Q.B. 194, where it was held, by a Divisional Court consisting of Vaughan Williams and Wright, JJ., that a petition will not be allowed to be amended by adding a petitioner after three months from the date of the act of bankruptcy. At page 197 Vaughan Williams, J., said:

It is perfectly clear that the Court aught not to allow, after three mouths, have elapsed from the date of the committal of the act of bankruptcy, the introduction of creditors, as petitioning creditors, who could not themselves present a petition.

8. And a little further on he observed:

Our attention was called to several cases which, it was said, established that the power of amendment could be exercised after the three months had elapsed. In all those cases, however, it will be seen that the person added was not essential to the petition by virtue of the requirement of the Act,, but only by virtue of the rules of practice of the Bankruptcy Court.

9. At page 195, in a remark made by the learned Judge in the course of the argument, he again refers to the difference between allowing an amendment in order to conform to some rules of practice and of allowing an amendment which would have the effect of dispensing with the statutory requirement that a creditor's petition must be filed within three months of the act of bankruptcy. This distinction was again emphasized in Re A Debtor (1902) 86 L.T. 688, where a petition not properly attested under the rules of practice was allowed to be amended, Wright, J., observing: 'This was not like a case where a new petitioning creditor is added.' The principle of In re Maund (1895) 1 Q.B. 194 was cited with approval by Sir Arnold White, C.J., in Gunnis & Co. v. Mahomad Ayyub Sahib I.L.R. (1913) 37 M. 555 : 24 M.L.J. 562, though it was not necessary to apply it in that case. Mr. Bhashyam Aiyangar has invited me to disregard In re Maund (1895) 1 Q.B. 194 and to follow L. C. T. R. M. S. Chettiar v. A.S. Chettiar Firm I.L.R. (1929) 7 Rang. 785 and Venkata Hanumantha Rao v. Gangayya I.L.R. (1928) 51 M. 594 : 55 M.L.J. 168 But these cases in no wise disagree or conflict with Maund's case (1895) 1 Q.B. 194. They distinguish it on the ground that its principle would have no application to cases where the validity of the petition was not in question.

10. The argument is that, assuming the petition to be invalid, as I think it was, on account of the non-joinder of all the creditor-partners, it is open to the Court to allow it to be amended, notwithstanding Section 9 (1) (c) of the Insolvency Act. It has, therefore, to be considered whether there is anything in the Provincial Insolvency Act, or in the provisions of the Civil Procedure Code, and of the Limitation Act which have been incorporated in the Insolvency Act, which enables the Court to make the amendment and so to virtually override the enactment of Section 9 of the Insolvency Act. The learned Counsel for respondents in the revision petition has relied first on Section 148, Civil Procedure Code. But Section 148 in terms applies to an enlargement of a time-limit fixed by the Court, and it can have no application to a time-limit fixed by Statute: Narasimha Aiyar v. Rangachari : AIR1926Mad689 . Nor do I think that the power to add parties conferred upon the Courts by the Civil Procedure Code enables this amendment to be made, in view of the limitations placed by Section 5 of the Insolvency Act upon the application of the Civil Procedure Code to proceedings in insolvency. Section 5 provides:

Subject to the provisions of this Act, the Court, in regard to proceedings under this Act, shall have the same powers and shall follow the same procedure as it has and follows, in the exercise of Original Civil Jurisdiction.

11. Therefore, there is not a complete but only a limited power of applying the provisions of the Civil Procedure Code to insolvency proceedings. To allow this amendment would have the effect of enlarging the time-limit fixed by Section 9 of the Insolvency Act. That would be to make the powers exercisable under the Civil Procedure Code superior to and not subject to the provisions of the Insolvency Act, and, having regard to the terms of Section 5 of the Insolvency Act, it cannot be done. It may be observed that if the delay of the creditor-petitioner in applying for the amendment had been occasioned by fraud, then there would be a case where, it has been said, 'the Court would strain its jurisdiction to the utmost'. See In re Maugham (1888) 21 Q.B.D. 21. But no fraud is imputed here. The failure by the creditor-petitioner to apply in time for the requisite amendment was due to his own dilatoriness. Then there is Section 5 of the Limitation Act which has been made applicable by Section 78 of the Insolvency Act 'to appeals and applications under this Act,' that is, the Insolvency Act. I am clearly of, opinion that an insolvency petition by a creditor or debtor is not an 'application'. A reference to Section 5 of the Limitation Act leaves no doubt upon the question: its language shows that the applications intended are applications of the description in Schedule I, Division III of the Limitation Act, which may arise in the course of or out of proceedings in insolvency. I hold, therefore, that it is not competent to the Court under the Insolvency Act or the incorporated provisions of the Civil Procedure Code and Limitation Act to allow this insolvency petition to be amended by the addition of the third creditor-partner when three months have expired since the act of insolvency.

12. But there is a further and alternative argument that the petition is sufficient as it stands. It is contended that inasmuch as the petition is substantially a petition of all the creditor-partners, and the proposed amendment a formality, the bringing of Vaithinatha Aiyar into the array of parties would not amount to the adding of a new party to the petition. This would be so, no doubt, if the contention were well founded. See Muthukrishna Pillai v. Rajam Aiyangar (1915) 30 M.L.J. 57 and Rajam Aiyangar v. Muthukrishna Pillai (1914) 25 I.C. 945. But the only place in the petition where Vaithinatha Aiyar's name is mentioned is in para. 4, where the petitioner says that he is the managing partner of a firm of which Vaithinatha Aiyar is a member. That statement does not make Vaithinatha Aiyar a party to the petition. Nor is he made a party by the fact that in the subsequent interlocutory applications in October and December to have Viswanatha Aiyar and Vaithinatha Aiyar made parties, 'the petitioner stated that he had instituted the insolvency proceedings as managing partner on behalf of his partners. Reference has been made to three cases by the learned Counsel for the creditors, viz., Sheo Lal Sahu v. Sagar Mal (1917) 40 I.C. 108, Marayya Chetty v. Sami Chetty (1915) 2 L.W. 239 and In re Hobbs (1892) 66 L.T. 144. But I do not think they serve to substantiate his point.

13. In Sheo Lal Sahu v. Sagar Mal (1917) 40 I.C. 108, where a partner sued for a debt due to the firm, making his partners defendants, it was held that the suit was effectively a suit by the firm, but that the plaint should be amended by describing the partnership firm as plaintiff. There all the partners were parties to the suit. In Marayya Chetty v. Sami Chetty (1915) 2 L.W. 239 the plaintiff had prefixed the firm name to his own, and it was held that the suit should be regarded as a suit brought on behalf of the firm. In that case the firm name was clearly used to indicate that it was a party, although in association with the name of one of the partners.

14. Re Hobbs (1892) 66 L.T. 144 was quite a different case. The petition was in the firm name and in the names of the two partners who had constituted the firm though they had dissolved partnership, and the petition was signed on behalf of the firm by one of its late members. Lord Justice Bowen described the position thus:

This petition is really a petition by two persons, and is signed by one of these two persons who asserts on its face that he is authorised to sign for himself and for the other person, by signing both names.

15. In the present case the petition is not in the firm name; it is not in the names of all the members of the firm; nor does it purport to be signed on behalf of the firm or its members by the petitioner signatory. In my opinion this petition cannot be regarded either in form or in substance as a petition by the creditor-partners. It was consequently unsustainable and was rightly dismissed by the learned Subordinate Judge.

16. The conclusions I have come to render it unnecessary to discuss the argument which was addressed to me on. the question whether the dismissal! of the petitioner-creditors' interlocutory application in December to have Vaithinatha Aiyar made a party was conclusive of this question, there having been no appeal from the order made on that application.

17. The result is that the Civil Revision Petition will be allowed with costs here and in the Lower Appellate Court, and the order of the Subordinate Judge dismissing the insolvency petition will be restored.


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