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Swamy Kotayya Vs. Thunuguntla Venkata Rangarao - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in156Ind.Cas.428
AppellantSwamy Kotayya
RespondentThunuguntla Venkata Rangarao
Cases ReferredEaswara Aiyar v. Govindarajulu Naidu
Excerpt:
provincial insolvency act (v of 1920), section 28(2), 31 - adjudication of debtor--execution petition for arrest of debtor--leave of court, whether necessary. - t.n. district police act, 1859 [act no. 24/1859]. section 10 & tamil nadu special police subordinate service rules, rule 14(b), clause (iv) explanation (1); [a.p. shah,c.j., f.m. ibrajhim kalifulla & v. ramasubramanian, jj] rule 14(b),ci.(iv) explanation (1) providing that a person acquitted or discharged on benefit of doubt shall be treated as person involved in criminal case - validity being questioned - held, the impugned rule 14(b) ci.(iv) explanation (1) has been issued in exercise of the power conferred upon the government under the tamil nadu district police act, the criminal city police act and the proviso to article 309..........remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceedings, except with the leave of the court on such terms as the court may impose.2. at first sight the interpretation is simplicity itself for an execution petition is obviously a legal proceedings and it is admittedly in this case 'in respect of a debt provable in the insolvency. nor do any difficulties arise from the decisions of our own high court. in easwara aiyar v. govindarajulu naidu 31 ind. cas. 192 : 39 m. 689 it was held that the words 'or other legal proceeding occurring in precisely the same centext in section 17 of the presidency towns insolvency act include applications in execution with a prayer for arrest. in alamelu ammal v. venkatarama iyer : air1927mad919 this.....
Judgment:

1. This petition raises the question whether when a debtor has been adjudicated an insolvent under the Provincial Insolvency Act, his creditor can, without the leave of the Insolvency Court file an execution application against him with a prayer for his arrest. Our decision depends upon the interpretation of Section 23(2) of the Provincial Insolvency Act which runs as follows:

On the making of an order of adjudication the whole of the property of the insolvent shall vest in the Court or in a Receiver as herein after provided, and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceedings, except with the leave of the Court on such terms as the Court may impose.

2. At first sight the interpretation is simplicity itself for an execution petition is obviously a legal proceedings and it is admittedly in this case 'in respect of a debt provable in the insolvency. Nor do any difficulties arise from the decisions of our own High Court. In Easwara Aiyar v. Govindarajulu Naidu 31 Ind. Cas. 192 : 39 M. 689 it was held that the words 'or other legal proceeding occurring in precisely the same centext in Section 17 of the Presidency Towns Insolvency Act include applications in execution with a prayer for arrest. In Alamelu Ammal v. Venkatarama Iyer : AIR1927Mad919 this interpretion of Section 28, of the Provincial Insolvency Act seems to have been accepted as so self-evidence that no alternative case was put forward.

3. Outside Madras, however, there is no unanimity of opinion. Though the High Courts of Lahore and Patna agree with the Madras view, those of Bombay and Allahabad do not. See Mohammad Roshan Sheikh Ali v. Ghulam Mohiddin 118 Ind. Cas. 791 : A.I.R. 1929 Bom. 135 : 31 Bom. L.R. 206 : Ind. Rul. (1929) Bom. 487 Maharaj Hari Ram v. Sri Krishna Ram : AIR1927All418 . The contrary view is based upon two reasons.

(i) If Section 28, gives automatic protection against an Execution Petition for arrest Section 31, is superfluous;

(ii) In the old Provincial Insolvency Act of 1907 the section corresponding to Section 28 ran 'shall have any remedy against the property or person of the insolvent.' It was those words which prevented the filing of an Execution Petition for arrest. The words 'or other legal proceeding' could not, therefore, in 1907 refer to any such Execution Petition nor can they so refer now when the words 'or person' have been deleted from the section in the 1920 Act.

4. This view has been strenuously pressed before us on behalf of the respondent. If accepted, however, it would involve not only a straining of the ordinary meaning of ordinary words, but also a conflict of decisions in interpreting those very same words, occurring no doubt in different Acts, but in exactly the same context, as the reasons put forward have no application to the Presidency Towns Insolvency Act. We do not think the reasons put forward are cogent enough to compel us to reach such a conclusion.

5. In the first place the superfluity of Section 31 is by no means established. An important distinction has been overlooked between Execution Petitions which are pending and Execution Petitions which have not yet been instituted at the time of the adjudication. In the former case there is nothing now in the Act to prevent the creditor from proceeding to arrest his debtor unless the debtor applies to the Court for protection under Section 31 on the assumption that is, that the debtor has not already applied under Section 23. There is still, therefore, scope for the application of Section 31. And the second argument in our opinion depends upon an artificial analysis of the old section. We see no logical reason why the words 'or other legal proceeding' should not under the old Act have prevented the institution of proceedings for arrest, and the words 'have no remedy against the person' have protected the insolvent from actual arrest. If the word 'remedy' is to be given the wide meaning which it has been given in Ali Hussain v. Lachhmi Narain Mahajan : AIR1932All188 All, then it would appear to us that the whole of the clause 'commence any suit or other legal proceeding' is itself superfious for the mere filing of a suit would be a remedy against the insolvent's property. For these reasons we think that we must decline to dissect the sections in the two Acts in this way, or to speculate upon the intentions of the Legislature so as to narrow down the meaning of the plain words 'or other legal proceeding.' We prefer to follow Easwara Aiyar v. Govindarajulu Naidu 31 Ind. Cas. 192 : 39 M. 689 and like the learned Judges who decided that case 'are not prepared to cut down the broad principle upon which the section is based, namely that when once a person is adjudicated insolvent creditors seeking any remedy against him must come to the Insolvency Court to get leave for that purpose. We accordingly allow this petition with costs and set aside the District Munsifs order.


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