Alamelu Ammal vs T.S. Venkatarama Aiyar

Wallace, J.—This Civil Revision Petition is against the order of the Lower Court in a matter of execution. The petitioner put in an execution

petition praying for the arrest of his judgment-debtor (respondent). The respondent urged that he is still an insolvent and that the proceedings in

insolvency are still pending, that the petitioner has not got permission of the Insolvency Court to open execution proceedings against him and that

therefore the petition is not maintainable. The respondent was adjudicated insolvent on 6th January, 1921. The petitioner, however, claims that the

insolvency proceedings have come to an end since the respondent applied for and was refused a final discharge on 30th October, 1923. The

petitioner put in a petition for review of that order which was dismissed on 15th March, 1924. The present execution petition was put in on 30th

April, 1925. It is admitted that the respondent''s adjudication has not been annulled.

The question for decision is, does the refusal, u/s 42 of the Provincial Insolvency Act, of a final discharge ipso facto determine the insolvency

proceedings? The Lower Court has held that it does not, and 1 agree. It is the order of adjudication which vests the property of the insolvent in the

Court or in the Official Receiver (see Section 28). It would follow that until and unless that order is annulled the property continues to vest in

Court, and so long as that vesting remains, the insolvency proceedings cannot have come to an end. It would be absurd to hold that it was open to

an execution-creditor without the permission of the Insolvency Court to arrest his judgment-debtor for not satisfying his decree-debt, when the

assets of the judgment-debtor are not vested in him or under his control, and when the Official Receiver is still holding them for the benefit of the

judgment-debtor''s general body of creditors. Further, an order of refusal of a final discharge is not in itself necessarily final. There are cases in

which it may not be final. For example, the final order of discharge may be refused because the insolvent''s assets are less than eight annas in the

rupee but the insolvent may subsequently come into property which would enable a dividend of more than eight annas to be paid and the Court

might on that finally grant him an absolute order of discharge. Obviously, the insolvency proceedings must in such a case be pending after the first

refusal to grant an absolute order of discharge. It is true that Act V of 1920 does not provide that the pendency of an insolvency proceeding shall

be terminated in every case by annulment of adjudication. Such annulment is provided for by Sections 35, 36, 39 and 43. But these sections do

not cover every possible case. It is clear from the scope of the Act that if a Court intends to bring the insolvency proceedings to an end and restore

the status quo ante it must annul the adjudication. In every case where an order u/s 42 has been passed the Court might suo motu or on the motion

of a creditor annul the adjudication, but until it is annulled the insolvency proceedings are still pending.

Another indication that this is the correct view is, that while u/s 37 the order annulling an adjudication must be published, there is no section

which says that the order of refusal to discharge must be published. The purpose of publication is obviously to notify to the public that the

insolvency has come to an end. If it came to an end by an order of refusal to discharge then it would be equally necessary to direct the publication

of that order, That the Insolvency Court in the present case did not close the proceedings is clear from the fact that the petitioner himself received a

dividend from the Official Receiver on 26th November, 1924, five months before his execution petition and 11 months after the order refusing

absolute discharge. It is now suggested that the payment might have been sanctioned long before the order of refusal, but there is nothing on the

record to warrant that suggestion..

There is a surprising lack of authorised reported rulings on this point of law. A case in Rangoon has been cited to the contrary. The ruling is by a

single judge reported in Maung Po Take Maung Po Gyi (1925) ILR 3 Rang. 492. Another learned judge of the same Court has ruled to the

contrary effect in Rowe & Co. Tan Thean Taik ILR (1924) Rang. 643, and 1 find myself in agreement with the latter''s view.

It is not necessary to go into the further question as to whether the execution petition is barred by limitation. The Lower Court has made no

error of law in holding that the insolvency proceedings were pending at the time of the execution petition and that Section 28 barred the application

as no permission of the Insolvency Court was obtained. I therefore refuse to interfere and I dismiss the C.R.P. with costs.