A.V.V. Govindasami Mudaliar vs Shiyali Sri Thripurasundari Amman

K.S. Menon, J.—The suit is to recover arrears of rent for three years from 8th February 1930, the date of the lease in favour of the

defendant. The defence is that, as the defendant was adjudicated insolvent on 7th August 1931 and as that adjudication was annulled only on 21st

February 1932, when a composition in satisfaction of the debts was approved, the plaintiff is not entitled to sue for the rent that accrued due during

that period, but can only recover it by proving his claim in the insolvency proceedings. It is true that the defendant was adjudicated insolvent on an

application by a creditor and that subsequently he entered into a composition in satisfaction of his debts with some of his creditors, but it is

admitted that the plaintiff was not a party to any of those proceedings. There is also no proof that the plaintiff was even aware of those

proceedings. The relevant portion of Section 39 of the Provincial Insolvency Act runs thus:

The Court shall frame a schedule in accordance with the provisions of Section 33, the order of adjudication shall be annulled...and the composition

or scheme shall be binding on all the creditors entered in the said schedule so far as relates to any debts entered therein.

In this case, the name of the plaintiff is admittedly not entered in the schedule, nor the debt due to him. It follows that the plaintiff is not bound by

the composition, and that, in respect of this debt which is not entered in the schedule he is not precluded from having recourse to other remedies

besides those provided by the Insolvency Law. This was the view taken by a. Bench of this Court in Gopalu Pillai v. Kothandarama Aiyar I.L.R.

(1934) 57 Mad. 1082 : 67 M.L.J. 843 and by the learned Chief Justice in Thangeswara Chettiar v. Ramamurthi Chetti (1934) 42 L.W. 399.

Section 28 of the Provincial Insolvency Act also would, therefore, be no bar to this suit. It may be that under the Presidency Towns Insolvency

Act, Section 30, a person in the position of plaintiff in this suit would not have been entitled to sue, but the wording of that Section is quite different,

for it is as follows,

The composition or scheme shall be binding on all the creditors so far as it relates to any debt due to them from the insolvent and provable in

insolvency.

But this is a case governed by the Provincial Insolvency Act and so long as Section 39 is worded as above the plaintiff''s right to sue cannot be

negatived. This objection was therefore rightly overruled by the lower Court.

The Revision Petition is dismissed with costs.