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Anumula Achiah Vs. Perumalla Papiah and ors. - Court Judgment

LegalCrystal Citation
Subject limitation
CourtChennai
Decided On
Reported inAIR1945Mad73
AppellantAnumula Achiah
RespondentPerumalla Papiah and ors.
Cases ReferredTownsend v. Deacon
Excerpt:
.....the official receiver to sell the shares of the sons as well while the suit was pending, but the official receiver was properly restrained by an injunction from selling anything beyond the shares of the insolvents. 460 of 1940 asking the court to decide that the debts included in the schedule of creditors were not incurred for illegal or immoral purposes and to direct the official receiver to sell the shares of the sons as well. the insolvency court said that the official receiver had failed to take advantage of the partition suit to have this question tried and that the insolvency court had no right to sell the sons' shares after the partition suit had been filed. it is well established that the attachment of the sons' shares in hindu joint family property automatically prevents the..........the 2/9th share and to deliver possession of the same to them. on 14th september 1936 those two sons filed a partition suit, o.s. no. 1055 of 1936, in the court of the district munsif of kurnool for partition and separate possession of their share. in that suit they imp leaded not only the other non-insolvent members of the coparcenary entitled to the respective shares, but also the insolvents and the official receiver. an attempt was made by the official receiver to sell the shares of the sons as well while the suit was pending, but the official receiver was properly restrained by an injunction from selling anything beyond the shares of the insolvents. the shares of the insolvents were accordingly sold by' the official receiver and a dividend was declared and the plaintiff in this.....
Judgment:

1. The question involved in this second appeal is whether the suit is either premature or barred by limitation. The suit is filed to recover a sum of Rs. 600 borrowed from the plaintiff by defendant 1, Papiah, on 3rd February 1925, with interest. Defendants 2 to 6 are the, coparceners of Papiah. Defendant 2 is his younger brother and defendants 3, 4 and 5 are the sons of defendant 1, Papiah, and defendant 6 is the son of defendant 2. These are respondents 1 to 6 in the second appeal. As Papiah was adjudged an insolvent the Official Receiver of Karnool has been added as defendant 7 and he is respondent 7 in the appeal. The suit was filed on 11th February 1941 and it is said that the suit is not barred by reason of the insolvency proceedings in I.P. No. 27 of 1927 in which defendant 1, Papiah, was adjudged an insolvent and by reason of the fact that those proceedings are still pending. Defendant 2 Narasimiah was also adjudged an insolvent in I.P. No. 24 of 1929. That also is said to be pending. The plaintiff says that he proved his debt in the insolvency and that the sons of defendants 1 and 2 are liable to pay the debts of their father by reason of the rule of pious obligation and that so long as the claim against the father is alive, the suit against the sons is also in time. The first Court held that as there has been no annulment of the adjudication of defendants 1 and 2, Section 78, Provincial Insolvency Act, which was pressed into service by the appellant would not apply as in his view that section enables a creditor to deduct the time between the date of the adjudication and the date of the annulment only if the suit was filed after the annulment. He also took the view that if the suit was filed before the annulment of the adjudication the ordinary period of limitation applied and the suit would be barred. Under the circumstances he allowed the plaintiff to withdraw the suit with liberty to file a fresh suit after the adjudication is annulled. The lower appellate Court has in substance upheld this view.

2. In second appeal it is urged that the view taken by the lower Courts is wrong and that the suit is in time. In the alternative it is said that there are two prayers in the plaint: (1) a declaration that the entire debt of the suit amount, court expenses and subsequent interest was incurred by defendants 1 and 2 for 1 tie benefit of the family of all the defendants and (2) enabling the plaintiff to recover the amount from the defendants' joint family properties and also from the properties belonging to the shares of defendants 3 to 6. This is a prayer which we do not generally come across, but it was necessitated by the following circumstances. This Official Receiver of Karnool who was appointed Receiver in both the insolvencies had to take various proceedings in order to set aside several alienations which had been effected shortly before the insolvency with a view to shield the property from the creditors. After succeeding in those attempts, the Official Receiver advertised the properties for sale. But on the eve of those sales, ho received a notice from the two sons of Papiah on 8th September 1936, whereby they declared that they have 2/9th share in the joint family estate, that the debts contracted by the insolvent were not binding on their shares and called upon the Official Receiver not to sell the 2/9th share and to deliver possession of the same to them. On 14th September 1936 those two sons filed a partition suit, O.S. No. 1055 of 1936, in the Court of the District Munsif of Kurnool for partition and separate possession of their share. In that suit they imp leaded not only the other non-insolvent members of the coparcenary entitled to the respective shares, but also the insolvents and the Official Receiver. An attempt was made by the Official Receiver to sell the shares of the sons as well while the suit was pending, but the Official Receiver was properly restrained by an injunction from selling anything beyond the shares of the insolvents. The shares of the insolvents were accordingly sold by' the Official Receiver and a dividend was declared and the plaintiff in this suit also received a dividend. The Official Receiver contested the partition suit O.S. No. 1055 of 1936 and pleaded that the various debts contracted by the insolvents were binding on the sons, the plaintiffs, that the debts were neither illegal nor immoral and that the creditors were also necessary parties to the suit. On these contentions an issue was raised, namely, whether the creditors of the insolvent were necessary parties to the suit. The Official Receiver also filed a petition requesting the Court to frame an additional issue in the suit whether the debts contracted by the insolvents were or were not binding on the sons. But the plaintiffs contended that the additional issue was unnecessary and that it did not arise in the suit. The District Munsif dismissed the petition saying that as the plaintiffs had alleged in the plaint that the debts incurred by the insolvents were avyawaharika debts, they were bound to prove the same in the suit. But after saying this he proceeded to add that the creditors were not parties to the suit and that any declaration regarding the illegal or immoral nature of the debts would not be binding on the creditors. A revision petition filed by the Official Receiver in this Court proved ineffective. The Official Receiver ought to have pressed for an adjudication of the question as to what were the debts binding on the whole family and for provision being made for the discharge of all the debts binding on the plaintiffs in that suit before a partition was made of the family properties. It was not really necessary to have the creditors as parties to that suit as the Official Receiver represented them. It is very unfortunate that the Official Receiver did not press upon the attention of the Court that an enquiry should be made as to what debts were payable by the plaintiffs and that provision should be made for the discharge of those debts before effecting a partition. One of the creditors applied in the insolvency Court Under Section 4, Provincial Insolvency Act, in M.P. No. 460 of 1940 asking the Court to decide that the debts included in the schedule of creditors were not incurred for illegal or immoral purposes and to direct the Official Receiver to sell the shares of the sons as well. The insolvency Court said that the Official Receiver had failed to take advantage of the partition suit to have this question tried and that the insolvency Court had no right to sell the sons' shares after the partition suit had been filed. It was also observed that each creditor would have to file a suit to enforce the pious obligation of the sons to discharge the father's debts. The present suit was then filed.

3. Now, it is said that so long as the adjudication is not annulled the provisions of Section 78 do not apply and that as things stand at present, the suit should be dismissed as barred, and that if the suits are filed after the adjudication is annulled, they may have a remedy against the sons. Before the Provincial Insolvency Act, 5 of 1920, there was no section corresponding to Section 78 of the present Act. Under the Act as it then stood it was held by this Court in Ramasami Pilial v. Govindasami Naicker A.I.R. 1919 Mad. 656 that an adjudication does not prevent time running and that limitation is not suspended by reason of the adjudication, If a creditor did not file a suit with the necessary leave of the Court Under Section 16 of the Act of 1907 and the adjudication was annulled before the administration' was complete, the creditor found that his remedy became barred if by the date of the annulment and by the time he filed a suit, the suit upon the original cause of action was barred. It is to remedy this situation that Section 78 was enacted. Does Section 78 which enables the deduction of time between the date of the adjudication and the date of the order of annulment enable a creditor to say that a suit filed before annulment is not barred. In Official Receiver Guntur v. Lalchand Kushalchand : AIR1943Mad94 this Court had to deal with the effect of Section 78, Clause (2) Provincial Insolvency Act. The plaintiff got a decree on 16th December 1930 against the father who was adjudged an insolvent. The adjudication was made in 1932. The decree-holder proved his debt in the insolvency. On 31st August 1936 the insolvency Court annulled the adjudication. On 24th September 1936 one of the creditors applied praying for the revesting of the property in the Official Receiver. While that application was pending, the plaintiff filed an execution petition to attach the funds in the hands of the Receiver and the attachment was made. A month later, the insolvency Court passed an order revesting the properties and the fund in question in the Official Receiver so that they could be utilized for the benefit of the creditors in the insolvency Court. The Official Receiver claimed that the attachment made by the creditor was ineffective and the executing Court upheld the contention. Thereupon the suit which came up before the High Court was filed for establishing the plaintiff's right, to proceed against the fund attached which involved a setting aside of the order passed on the Official Receiver's claim. With reference to the father's share of the proceeds, it was held that even though there was a valid attachment prior to the revesting order, as an attachment does not create a charge, the decree-holder could not proceed against the father's share after the revesting order which amounted to a fresh adjudication and vested that share in the Official Receiver. Dealing with the sons' shares in the funds the learned Judges (Wadsworth and Patanjali Sastri JJ.) said this:

With reference to the sons' shares we have listened to very elaborate arguments, but the matter seems to us to be comparatively simple. It is well established that the attachment of the sons' shares in Hindu joint family property automatically prevents the father from exercising over those shares his power to sell the property and utilize the proceeds for the discharge of his own just debt. Similarly when the shares of the sons have been attached by a creditor before the father's assets vest in the Official Receiver, the vesting in the Official Receiver of the power of the father to dispose of his son's shares for the payment of his own debts cannot enable that power to be exercised over the properties so attached.. It seems to follow that at the time of the revesting order, the sons' shares being under an attachment by the plaintiff, the revesting order would give to the Official Receiver no power to sell those shares or to use the proceeds of those shares for the satisfaction of the other debts of the father to the extent of the attachment.

4. Then they dealt with the question whether the claim of the plaintiff to execute his decree against the shares of the sons was barred by limitation. It was admittedly a decree against the father alone and the contention of the appellant was that so long as the claim was alive as against the father, it was also alive as against the sons. The learned Judges said this:

It was admittedly a decree against the father alone which was alive as against the father by reason of the provisions of Section 78, Provincial Insolvency Act.. There is clear authority for the general proposition that when the debt is alive against the father, it is alive against the son in the absence of special circumstances, such as that created by a renewal after a partition between the father and son or perhaps the position when the father and son were both defendants and the father alone was an insolvent against whom limitation is saved Under Section 78, Provincial Insolvency Act. But on the facts of the present case we have no doubt that the execution of the plaintiff's decree against the father by the attachment of the proceeds of the sale of the sons' shares was not barred by limitation.

5. In that case the execution petition was against the father and sons and the attachment was after the adjudication of 1932 was annulled by the order of 31st August 1936. That would be a case to which Section 78, Clause (2) in terms applies and the period between the date of the adjudication and the date of the annulment has to be excluded. But the learned advocate for the appellant relies upon the reasoning of the learned Judges where they said:

There is clear authority for the general proposition that when the debt is alive against the father, it is alive against the son in the absence of special circumstances.

6. and on the observation that the decree before them was admittedly one against the father alone which was alive as against the father by reason of the provisions of Section 78, Provincial Insolvency Act. The principle laid down by them appears to me to be this. If after an adjudication is annulled, a claim against the father is enforceable, it really means that all along during the pendency of the insolvency proceedings the claim against the father was alive. To put it in other words, it is not a new right that is created on the order of annulment, but it is the old right that is enforced in the suit or execution proceedings filed after annulment. The statutory provision that the time between the date of the adjudication and the date of the annulment should be excluded necessarily involves the position that during the interval, the claim was not really barred If this is the correct principle, then it would follow that the claim against the sons can be enforced even during the insolvency of the father and as the requisite leave of the insolvency Court has been obtained in this case the further condition laid down by Wadsworth and Patanjali Sastri JJ. that the creditors could proceed against the sons' share only with the leave of the insolvency Court has boon fulfilled.

7. The provision in Section 78, Clause (2) 'other than a suit or application in respect of which the leave of the Court was obtained Under Sub-section (2) of Section 28' really refers to the suit or application against the insolvent. If the creditor wanted to proceed against the sons, it appears to me that no leave of the Court was really necessary though I notice that Wadsworth and Patanjali Sastri JJ. say that as it is the right against the father which is being enforced against the sons, leave of the insolvency Court should be obtained even then. As observed by me that had been obtained in this case and it is not, therefore, necessary to go into that question further. The point to be determined is whether the provisions that the period between two given events should be excluded does not necessarily mean that during that interval the cause of action was not barred. The provision is not that on the happening of the latter event a now right is created, but the provision is one providing for the exclusion of the period between the two events. Under the Limitation Act, we have got similar provisions in Part III beginning with Section 12. Under Section 12, Clause (2), in computing the period of limitation prescribed for an appeal, an application for leave to appeal arid an application for a review of judgment, the day on which the judgment complained of was pronounced, and the time requisite for obtaining copy of the decree, sentence or order appealed from or sought to be reviewed shall be excluded. Let us take a case where an application is filed for copies of both decree and judgment and while that application is pending an appeal is filed owing to an urgency beyond the prescribed period for an appeal computing the time from the date of the judgment: can the appeal be said to be barred? Very often one gets a copy of the decree alone while the copy of the judgment is not yet given and files an appeal. Though rarely sometimes an appeal is filed without certified copies of either the decree or the judgment with a request to excuse their production and for permission to file them later on. If such MI appeal is filed during the pendency of the application for grant of the copies, I should hesitate very much to say that the appeal is barred if it happened to be filed more than the prescribed period for an appeal counting it from the date of the judgment. The decision of the Allahabad High Court in Gaekwar Baroda State Railway v. Mahamed Habibullah : AIR1935All258 decides that the appeal would in such cases be in time. Similarly, Section 13 provides that in computing the period of limitation prescribed for any suit, the time during which the defendant has been absent from British India shall be excluded. If after one year after the cause of action accrues, the Defendant 1eaves British India and is absent and the suit is filed more than three years after the cause of action arose, but at a time when the defendant had not yet returned from abroad, Section 13 would enable the plaintiff to say that his suit is not barred. The decision in Forbes v. Smith (1855) 11 Ex. 161 is in point. At the time when the cause of action arose in that case, the defendant was beyond the sea and not in the United Kingdom of Great Britain and Ireland and more than six years elapsed after that date. The defendant did not return to the United Kingdom and continued in foreign parts beyond the seas. The suit was filed more than six years after the cause of action arose, that being the period of limitation prescribed by 21 Jac. 1, Chap. 16, Section 3, and before the return of the defendant to the United Kingdom. Under 4 Anne. c. 16:

if any person or persons against whom there shall be certain causes of action shall be, at the time the cause of action accrued, beyond the seas, then such person or persons who is or shall be entitled to any such suit or action, shall be at liberty to bring the said actions against such person or persons, after their return from beyond the seas, so as they take the same after their return from beyond the seas within such times as are respectively limited for the bringing of the said actions before by this Act, and by the said other Act made in the 21 Jac. 1.

8. The defendant took up the question by way of demurrer and argued that the enactment made the return of the defendant and the commencement of the action within six years thereafter conditions precedent to the maintainability of the suit. Chapter 16, Section 7 of 21 Jac. had provided for the case of the plaintiff's being out of the United Kingdom. The learned Judges dealt with the question this way:

We ought to put the same construction on the 4 Anne. Chap. 16, Section 19, as has been put on the 21 Jac. 1, Chap. 16, Section 7 and the case of Townsend v. Deacon (1849) 3 Ex. 706 certainly justifies a departure from the strict language of the statute, because if an action may be brought by the personal representative of a person who has never returned from abroad, it follows in this case, that although the defendant has never returned he is liable to be sued, yet that is inconsistent with the notion that the 4 Anne. Chap. 16, Section 19, gives a new cause of action on the defendant's return. No doubt the argument of Mr. Quain is, as to the letter, perfectly correct; and if the statute is to be construed without reference to the subject-matter or other statutes and decisions, and without regard to the construction which should be given to it in order to make it consistent with law and common sense, his argument ought to prevail. If the mere language is to be taken without reference to its meaning and general intention, it would certainly seem as if the being at liberty to bring an action after the defendant's return was inconsistent with the power to bring it before his return. But that is not the mode of ascertaining the meaning of the Legislature, for Townsend v. Deacon (1849) 3 Ex. 706 proves that a plaintiff's executor may sue in this country though the plaintiff never returned; and it follows by necessary analogy, that, though this defendant had never returned, yet if any one had proved his will the plaintiff might have sued that personal representative, and it would be very strange if a personal representative might sue and be sued, and yet the party himself could not.. The construction of the statute which I adopt is this the plaintiff shall have, for the purpose of suit, any time not exceeding six years from the return of the defendant to this country; but if he chooses to sue the defendant before his return, he may take that course. (Per Pollock, C.B.).

Alderson B. said this:

According to the true construction of the statute, the one party is not barred of his action unless the other party has returned and six years have elapsed, since his return.

9. Platt B. added that in construing these statutes, one must see what is the limit within which an action may be brought. In Light-wood on Time Limit of Actions, page 295, the same position is laid down. The above decision applies to cases Under Section 13, Limitation Act. There is this difference that under the English law the defendant must have been abroad at the time when the cause of action arose but tinder the Indian law, there is no such provision. There are other differences which are not material. Under Section 78, Provincial Insolvency Act, the same result would I think follow. I hold that Section 78 which provides for the exclusion of the period between the date of the adjudication and the date of the annulment necessarily involves the conclusion that the cause of action cannot be said to have been barred during the interval. I set aside the decrees of both the lower Courts and remand the suit for trial on the other issues to the Court of first instance. It is said that no evidence was taken on the other issues. It is regrettable that a suit on a promissory note of 1925 should still be pending. But the lower Courts took the unfortunate stop of deciding the case on a preliminary ground without recording evidence on all the questions as the trial Courts ought to do. Now that their decision on the question of limitation is found to be incorrect, there is the further delay caused by the trial on the other questions which has to take place hereafter. The respondents will pay the costs of the appellants both here and in the lower appellate Court. The costs in the trial Court will be provided for in the revised judgment of that Court. Court-fee paid on the memorandum of second appeal will be refunded. Leave refused.


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