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Parasurama Mudaliar and ors. Vs. B. Ramanathan and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberC.R.P. 1620 of 1980
Judge
Reported inAIR1981Mad33
ActsProvincial Insolvency Act, 1920 - Seciton 44(1), 44(2) and 44(3)
AppellantParasurama Mudaliar and ors.
RespondentB. Ramanathan and ors.
Appellant AdvocateR. Gandhi, Adv.
Respondent AdvocateT.R. Rajagopalan, Adv.
Cases ReferredIn Seetharamayya v. Kesavayya
Excerpt:
- - 100 of 1968. it is obvious that the petitioner and ramaswami mudaliar were jointly bound to discharge the debt under the promissory notes as well as under the decree, which was later passed on 7-2-1972. the only question that has to be considered is, whether the order for absolute discharge of ramaswami mudaliar would make any difference in the matter of the executability of the decree obtained against the petitioners one of whom at least was jointly bound to pay the debt even on the date of presentation of the petition for adjudication of ramaswami mudaliar as an insolvent......the said balakrishnan against the petitioners who were impleaded as defendants 1, 3 and 4 and one ramaswami mudaliar, another son of the first petitioner and who was impleaded as the second defendant therein on the basis of the promissory notes dated 20-1-1966 and 17-7-1966 executed by the first petitioner and ramaswami mudaliar. pending suit, balakrishnan died and the respondents were impleaded as his legal representatives. on 7-2-1972, they obtained a decree against the petitioners and ramaswami mudaliar in the following terms -1. that the defendants 1 and 2 personally and that the defendants 1 to 4 out of the joint family properties in their hands do pay to the 2 to 4 plaintiffs the sum of rupees 7689-16 with interest on rs. 6,500 at 6 1/4 % p. a. from the plaint date and at 6% p......
Judgment:
ORDER

1. The defendants 1, 3 and 4 in O. S. No. 100 of 1968, Sub Court, Tirupattur, are the petitioner in this civil revision petition. The respondents herein are the legal representatives of the deceased plaintiff P. Balakrishnan in that suit. O. S, No. 100 of 1968 was instituted by the said Balakrishnan against the petitioners who were impleaded as defendants 1, 3 and 4 and one Ramaswami Mudaliar, another son of the first petitioner and who was impleaded as the second defendant therein on the basis of the promissory notes dated 20-1-1966 and 17-7-1966 executed by the first petitioner and Ramaswami Mudaliar. Pending suit, Balakrishnan died and the respondents were impleaded as his legal representatives. On 7-2-1972, they obtained a decree against the Petitioners and Ramaswami Mudaliar in the following terms -

1. That the defendants 1 and 2 personally and that the defendants 1 to 4 out of the joint family properties in their hands do pay to the 2 to 4 plaintiffs the sum of Rupees 7689-16 with interest on Rs. 6,500 at 6 1/4 % p. a. from the plaint date and at 6% p. a., from this date till the date of realisation towards the A promissory note due;

2. That the 2nd defendant personally and the defendants 1 to 4 from out of the joint family properties in their hands do pay to the plaintiffs 2 to 4 the sum of Rs. 143-48 with interest on Rs. 125 at 6 1/4 % p. a. from the plaint date to this date and at 6% p. a. from this date till the date of realisation towards the B promissory note.

Ramaswami Mudaliar, the second defendant in the suit was adjudicated as an insolvent in I. P. No. 17 of 1970, Sub Court, Vellore, and during the course of the administration of his estate by the Official Receiver, the respondents herein filed an. affidavit in proof of the decree obtained by them in O. S. No. 100 of 1968, Sub Court, Tirupattur. It was stated therein that the amount due to them was Rs. 10,265-80, and that all the three are decree-holders Pursuant to this claim, it is not in dispute that the respondents were paid on 21-11-1974 a sum of Rs. 1,384-29, by the Official Receiver, Vellore. On 5-2-1975, on an application made in I. A. No. 58 of 1974 in I. P. No. 17 of 1970 by Ramaswami Mudaliar, who was adjudicated an insolvent, an order of his absolute discharge was passed by Sub Court, Tirupattur. Thereafter, the respondents herein filed R. E. P. No. 10 of 1968 in O. S. 100 of 1968 praying for the attachment and sale of the properties. To that application, the second petitioner herein filed a counter stating that having regard to the receipt of, the sum of Rs. 1,384-29 on 21-11-1974 by the respondents from the Official Receiver in full satisfaction of the decree amount in O. S. No. 100 of 1968, it is not open to the respondents to file a petition for execution and claim that further amounts are still due. This objection was overruled by the learned Subordinate Judge, Tirupattur, who directed the further execution to be proceeded with. It is the correctness of this order that is challenged in this civil revision petition.

2. The learned counsel for the petitioners contends that the circumstance that a sum of Rs. 1,384-29 was paid by the Official Receiver on 21-11-1974, and received by the respondents towards the decree in O. S. 100 of 1968 on proof of the decree debt must be taken to have resulted in the discharge of the entire decree, especially after an order for absolute discharge was passed in favour of Ramaswami Mudaliar in I. A. No. 58 of 1975 in I. P. No. 17 of 1970 on 5-2-1975. On the other hand, the learned counsel for the respondents would contend that the mere discharge of one of the judgment debtor who had earlier been declared as an insolvent would not suffice to put an end to the liability under the decree, which according to him, will remain intact as against others and can also be executed against them. In the instant case. it has already been seen that the promissory notes had been executed by the first petitioner and Ramaswami Mudaliar on 20-1-1966, 17-7-1966 and these promissory notes have been sued upon in O. S. No. 100 of 1968. It is obvious that the petitioner and Ramaswami Mudaliar were jointly bound to discharge the debt under the promissory notes as well as under the decree, which was later passed on 7-2-1972. The only question that has to be considered is, whether the order for absolute discharge of Ramaswami Mudaliar would make any difference in the matter of the executability of the decree obtained against the petitioners one of whom at least was jointly bound to pay the debt even on the date of presentation of the petition for adjudication of Ramaswami Mudaliar as an insolvent. Section 44 of the Provincial Insolvency Act, provides an answer to this situation. After enumerating the debts in respect of which an insolvent shall not be. released in spite of an order of discharge under S. 44(1), S. 44(2) is specific and categoric in that excepting as provided by sub-section. (1) an order of discharge shall release the insolvent from all debts provable under this Act. It must be remembered that the statutory release of the insolvent as a result of an order for discharge is confined only to the insolvent and not the other co-judgment debtors. This view is reinforced by the provision made under Section 44(3) to the effect that an order of discharge shall not release any person who, at the date of the presentation of the petition, was a partner or a co-trustee with the insolvent, or was jointly bound or had made any join contract with him or any person who was surety for him. While, therefore, providing for the release of the insolvent only from the debts as a result of the discharge, Section 44(3) still preserves the liability of persons who had bound themselves to pay along with the insolvent. This is a pointer that the mere circumstance that amongst a set of judgment-debtors, one is adjudicated an insolvent and later obtains a discharge cannot absolve the other co-judgment-debtors also from their liability under the decree. In Seetharamayya v. Kesavayya, : AIR1952Mad108 a Division Bench had to consider this position. There the question that arose was, whether the release of an insolvent father under Section 44 of the Provincial Insolvency Act from all debts extinguishes the liability of the son who is liable under the decree along with the father in respect of his father's debts. In repelling an argument based on Sec. 44(2) of the Provincial Insolvency Act, that its effect is to extinguish the debt as such the Bench held thus -

'To give effect to this argument is to ignore sub-section 43). If under sub-sec. (2) the release of the insolvent from all debts provable under the Act operates as a complete extinction of the debt which the insolvent is jointly bound along with others to pay, then sub-section (3) has no meaning at all. On the other hand, the fact that subsection (3) provides for the continuance of the liability of persons jointly liable along with the insolvent indicates that the debt as such is not extinguished but it only releases the insolvent from all liability keeping alive the liability of the other debtors jointly liable with him. It. therefore, follows that the liability of a person jointly bound is not extinguished despite the discharge of the insolvent.'

3. In view of the aforesaid decision the argument of the learned counsel for the petitioners that on the receipt of a gum of Rs. 1,384-29 by the respondents from the Official Receiver, the entire decree in O. S. 100 of 1968 stood discharged even as against the petitioners cannot be accepted. The court below, though it did not advert to any of these aspects, was certainly right when it held that there was no substance whatever in this objection of the petitioners and that the further execution ought to proceed. There is absolutely no error whatever of jurisdiction in the order of the court below. The result is the civil revision petition fads and is dismissed. No costs.

4. Petition dismissed.


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