Trevelyan and Banerjee, JJ.
1. It seems to us clear that the learned District Judge is wrong in the conclusion at which he has arrived. The material facts are shortly as follows: The appellant obtained a decree against the respondent. The respondent on being arrested on this decree, filed his petition under the insolvency section of the Code of Civil Procedure. The procedure laid down in Chapter XX seems to have been carried out, and, in course of time, the creditors were required to prove their debts. The appellant before us, although she seems to have received notice, did not attend, and, in the result, her name was not jncluded in the schedule. The scheduled creditors, that is to say, the persons who proved their debts, have been paid and the residue of the property in the hands of the receiver has been paid out to the insolvent. Now this decree-holder seeks to execute her decree against the property of the insolvent.
2. We have heard argument on behalf of the respondent, and the effect of that argument is shortly this: The learned pleader contends that, as the decree-holder did not attend before the District Judge and give evidence, the whole debt is wiped off, and he argues that his client having got a discharge from his scheduled debts, they are not debts at all.
3. There can be no doubt that, where a person has got a right, and it is contended that that right is taken away by statute, the right cannot be held to have been taken away except by express words in the statute, or by inference so clear from the terms of the enactment, that there can be no doubt about it. The section of the Code as to discharge, is Section 357. The first portion of that section gives an insolvent a release, so far as arrest and imprisonment are concerned, from his scheduled debts. It then goes on not to give him a discharge in respect even of the scheduled debts, but it goes on to say this; 'Subject to the provisions of Section 358, his property, whether previously or subsequently acquired, except the particulars specified in the first proviso to Section 266, and except the property vested in the receiver, shall, by order of the Court, be liable to attachment and sale, until the debts due to the scheduled creditors are satisfied to the extent of one-third or until the expiry of twelve years from the date of the order of discharge under Section 351 or 355.' That is to say, all the property in the hands of the receiver is to be sold, and the proceeds paid to the scheduled creditors; and besides that, his other property is liable to be attached and sold until the debts due to the scheduled creditors are satisfied to the extent of one-third or until the expiry of twelve years. Probably the effect of that would be to discharge him from the debts to the scheduled creditors entirely, but there is no reference there to any persons whose names are omitted from the schedule. We do not think that the fact that a creditor is invited to prove his claim limits or destroys his rights. There is no doubt that, if he had not been so invited, a creditor would not be affected by Section 357.
4. It is said that the effect of her omission to come in operates as a decree dismissing her claim. We cannot hold that when we have here a decree-holder, whose decree is admitted, and execution of whose decree is the cause of these insolvency proceedings being taken.
5. We think it is necessary for us to notice what does appear at first sight to be somewhat anomalous in the provisions of Section 352. As the learned pleader points out, although an insolvent may come into Court seeking to be released from his debts, and although the object of those proceedings is to release him from those debts, if a creditor does not come in and prove his debts, this would prevent an insolvent acquiring the relief that the Code contemplates giving him.
6. That is unfortunate, but unless the Act takes away existing rights, we cannot say that the rights have ceased to exist. This question is not for us, but for the Legislature to consider. But as Mr. Justice BANERJEE pointed out during the argument, it is possible to read Section 352 a little less strictly than is suggested, and to say that an insolvent might come in and prove the debts of the creditors if he wishes to get a discharge from them. That would get rid of the difficulty.
7. It seems to us that as Section 357 does not give the debtor any right to get his discharge from this debt, we must allow execution to go In the result we set aside the order of the District Judge, and restore that of the Munsif. The judgment-creditor is entitled to her costs in the Lower Appellate Court and in this Court.