Skip to content


M.N.S.T. Chidambaram Chettiar Vs. A.L.M. Meyyappa Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1944Mad67; (1943)2MLJ510
AppellantM.N.S.T. Chidambaram Chettiar
RespondentA.L.M. Meyyappa Chettiar and ors.
Cases ReferredBenzon Bower v. Chetwynd
Excerpt:
- - 6. section 14 of the limitation act clearly has no application here. sub-section (1) applies only to a suit where the plaintiff has been prosecuting in good faith another civil proceeding founded upon the same cause of action and the court in which the other civil proceeding was instituted was unable to entertain it. when a receiver has been appointed, a creditor is not in a position to maintain a suit against a receiver without the leave of the court, but he is certainly at liberty to apply to the court for leave to sue, and if his claim is such that it will be better to decide it in a regular suit than in the course of the inquiries to be made by the receiver, the court will grant the request......should have done in the circumstances. the appellant was wiser and he must have the reward to which his care entitles him.14. the appeal will be allowed and the suit decreed with costs here and below.
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The suit which has given rise to this appeal was filed by the appellant under Section 73(2) of the Civil Procedure Code. The suit was dismissed by the Subordinate Judge on the ground that the claims of the contesting defendants for rateable distribution were not barred by the law of limitation as the plaintiff had contended The plaintiff says that the Subordinate Judge here erred and should have granted the decree sought. The question is one of considerable importance and there are no reported decisions which are directly in point, although there are authorities which have bearing.

2. In O.S. No. 34 of 1932 in the Court of the Subordinate Judge of Devakottai, the plaintiff obtained a decree against the estate of one P.L.T.A.R. Arunachalam Chettiar for the payment of the sum of Rs. 7,810-8-4. Arunachalam Chettiar was joint with his son, who was sued as the legal representative of his father. On the 20th October, 1932, another creditor of the estate, Ramaswami Chettiar, filed O.S. No. 397 of 1932 in the Court of the District Munsiff of Devakottai for the administration of the estate of P.L.T.A.R. Arunachalam Chettiar. Several creditors were impleaded as defendants. The plaintiff was the 22nd defendant, and the first, second and third defendants in the present suit were made the fifth, sixth and sixteenth defendants respectively. All these defendants had obtained decrees against the estate of Arunachalam, The plaintiff and the first, second and third defendants contended that a suit for the administration of the estate of Arunachalam did not lie, because he had left no separate property and his son had obtained an absolute interest in the joint family property by survivorship. This contention was rejected by the District Munsiff, who on the 28th April, 1934, passed a preliminary decree for administration. His decision was upheld by the Subordinate Judge on first appeal and by this Court on second appeal. In a further appeal under clause 15 of the Letters Patent, the contention was, however, accepted and consequently, on the 10th April, 1939, the District Munsiff passed a formal decree dismissing the suit.

3. After the District Munsiff had passed a preliminary decree for administration, he appointed a receiver to take charge of the properties forming the estate, and in accordance with the duties which had devolved upon him, the receiver took steps to realise the assets. As the result, he brought into Court the sum of Rs. 11,425-6-6. The plaintiff had taken the precaution of keeping alive the decree which he had obtained in O.S. No. 34 of 1932, and on the 4th March, 1939, he applied for the attachment of the Rs. 11,425-6-6. The amount due to him under his decree had then increased by reason of interest to Rs. 11,904-14-0. The first, second and third defendants allowed their decrees to become time barred. Nevertheless, on the 28th March, 1939, the first defendant applied for the attachment of the money in Court, and on the 26th April, 1939, and 6th July, 1939, the second and third defendants made similar applications respectively.

4. The question then arose whether the defendants were entitled to rateable distribution of the Rs. 11,425-6-6 with the plaintiff. The Subordinate Judge held that they were. In his opinion, the period which elapsed between the institution of the administration suit on the 20th October, 1932 and its dismissal on the 10th April, 1989, should not be taken into consideration in calculating whether the application of the first, second and third defendants were in time. As the Subordinate Judge had held that these defendants were entitled to share in the fund in Court, the plaintiff filed the present suit under Section 73(2) of the Code of Civil Procedure. The Subordinate Judge adhered to the opinion expressed in the attachment proceedings and passed a decree dismissing the suit. The respondents in the appeal are the first second and third defendants in this suit.

5. While concedil that the question of limitation would not have arisen if the administration suit had not been dismissed, the appellant says that regard can now only be had to the provisions of the Limitation Act, and Sections 14 and 15 on which the defendants rely have no application. Put in other words, he Says that as the administration suit has been dismissed as being incompetet, the Court must ignore the time taken up by it. We consider that this argument must prevail.

6. Section 14 of the Limitation Act clearly has no application here. Sub-section (1) applies only to a suit where the plaintiff has been prosecuting in good faith another civil proceeding founded upon the same cause of action and the Court in which the other civil proceeding was instituted was unable to entertain it. None of the respondents has filed a suit. Sub-section (2) relates to applications, but on the previous proceedings the respondents were not applying for the relief which they now seek. They strongly opposed the estate being administered by the Court.

7. Section 15(1) states that in computing the period of limitation prescribed for a suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuation of the injunction or order, the day on which it was issued or, made, and the day on which it was withdrawn, shall be excluded. The provisions of the Limitation Act must be construed strictly. Hardship is no consideration. There was no injunction or order of stay passed in the administration suit or in the suits of the respondents against the estate of Arunachalam, and therefore Section 15 does not help the defendants. It is true that, so far as the first defendant is concerned, an injunction prohibiting him proceeding in execution was passed at one stage but this was dissolved on the 30th October, 1933. When the injunction was dissolved he could have proceeded in execution and could have attached the assets in Court, but he took no steps and as the result of his neglect to do so, the Court directed the receiver to sell the properties on the 19th January, 1934.

8. The plaintiff in the administration suit did not ask for an injunction in his plaint and the preliminary decree which was drawn up on the 28th April, 1934, was in the usual form. There was nothing in that decree to prevent the defendants taking steps to keep their respective decrees alive, a precaution which the appellant did take. It has been suggested on behalf of the respondents that a preliminary decree in an administration suit operates automatically as an injunction restraining the creditors from proceeding to enforce their debts outside the administration suit. This is not, however, a correct statement of the position. When a receiver has been appointed, a creditor is not in a position to maintain a suit against a receiver without the leave of the Court, but he is certainly at liberty to apply to the Court for leave to sue, and if his claim is such that it will be better to decide it in a regular suit than in the course of the inquiries to be made by the receiver, the Court will grant the request. The injunction or order contemplated by Section 15(1) of the Limitation Act is an injunction or order which specifically stays the execution of the decree; and as we have indicated, we do not regard a preliminary decree passed in an administration suit as amounting to an injunction or order within the meaning of the section.

9. In Satyanarayana Brahman v. Seetkayya (1926) 52 M.L.J. 396 : I.L.R. Mad. 417 this Court held that so long as there is no legal impediment to the filing of a suit earlier, time cannot be excluded, and in Sundaramma v. Abdul Khadar (1932) 64 M.L.J. 664 : I.L.R. Mad. 319. it was held that no equitable grounds for the suspension of a cause of action can be added to the provisions of the Indian Limitation Act. In dealing with a case under Section 15 of the Limitation Act, the Allahabad High Court in Lakshmichand v. Bibi Kulsumunnissa I.L.R. (1939) All. 207. pointed out that there is no reference in the section to the case of the execution of one decree being 'Suspended or rendered impossible by a subsequent decree inconsistent with it in another suit.

10. The position here is analogous to the position under the Provincial Insolvency Act of 1907. In Ramaswami Pillai v. Govindasami Naicker (1918) 36 M.L.J. 104 : I.L.R. Mad. 319 this Court held that in calculating the period of limitation for a suit against a person after an order adjudicating him an insolvent under the Provincial Insolvency Act, 1907, had been annulled, Section 15 of the Limitation Act did not permit the deduction of the period between the date of the order of adjudication and the date of its annulment, as an order of adjudication did not effect an absolute stay of suits against the insolvent, but only made it necessary that leave to sue should be obtained from the Court before a suit could be filed against him while the adjudicating order remained in force. The Provincial Insolvency Act of 1920 altered the law in this respect. Section 78 now permits the time being excluded when computing the period of limitation. There is, however, no such provision with regard to administration suits. In respect of such suits, the position is exactly the same as it was under the Provincial Insolvency Act of 1907.

11. In Sidhraj Bhojraj v. Alli Haji I.L.R.(1922) 47 Bom. 244 the Bombay High Court held that when there had been an adjudication under the Presidency Towns Insolvency Act and the adjudication order was subsequently cancelled, the time during which the insolvency proceedings were pending could not be deducted in computing the period of limitation for a suit instituted by a creditor against the debtor to recover his debt. The reasoning was the same as that to be found in the judgment in Ramaswami Pillai v. Govindaswami Naickey (1918) 36 M.L.J. 104 : I.L.R. Mad. 319.

12. The principle enunciated in in re Benzon Bower v. Chetwynd (1914) 2 Ch. 68 also has bearing. In that case, the donee of a general testamentary power of appointment over a fund of 1 15,00.0. was adjudicated bankrupt in 1890 and again in 1892. He died in 1911, without having obtained his discharge. By his will, he exercised this power of appointment. An action for the administration of his estate was then commenced. The principal asset of the estate was the fund over which he had held the power of appointment. The creditors who had proved in the bankrputcies claimed in the administration suit to be paid out of this fund. The Court of Appeal held that while the appointment and the death of the appointor made a new fund available for the creditors and the administration suit provided a new method for enforcing payment, a creditor's cause of action remained the same, being on the old debt. The law of limitation had commenced to run before the adjudication, which did not interrupt time running so far as the administration suit was concerned, and as the claims had become time barred, they could not be enforced. In other words, the rule that limitation does not run in respect of claims against an estate which is being administered in bankruptcy, provided that they were enforceable at the date of adjudication, does not apply when a creditor is seeking to enforce payment in proceedings outside the bankruptcy. The same principle must apply in an administration suit. In this case, time did not run against the defendants in the administration suit; but as that suit has been dismissed and they are now seeking to enforce payment outside the suit, the law of limitation applies.

13. The defendants have only themselves to blame for the position in which they find themselves. They would have got their full rights if they had not objected to the institution of the administration suit. While insisting on the technical plea that the suit did not lie, they did not take the precaution to keep their decrees alive, which they certainly should have done in the circumstances. The appellant was wiser and he must have the reward to which his care entitles him.

14. The appeal will be allowed and the suit decreed with costs here and below.


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