Jakku Papamma vs The Official Receiver and Another

Horwill, J.—The appellant is said to be the daughter of the insolvent. The Official Receiver proceeded to sell the suit property as if it were

the property of the insolvent; and early in the administration the appellant filed an application under Sections 4 and 5; of the Provincial Insolvency

Act asking for a declaration that the property in question belonged to her and for an injunction restraining the Official Receiver from including this

land in the estate of the insolvent and selling it. She frequently defaulted in appearance; and at last, on 29th April, 1937, the District Munsiff,

adopting the procedure to be followed in a suit, dismissed the application for default of appearance. She then filed an application to restore the

petition, which was dismissed on the ground that she had frequently defaulted and that her application was not a bona fide one. She now seeks to

get rid of those decisions by filing a suit against the Official Receiver, again setting up her title to the land. The Official Receiver raised the

preliminary objection that the matter had been concluded by the order on her earlier petition; and both the District Munsiff and the District Judge in

appeal upheld the Official Receiver''s objection. She has come here in second appeal.

u/s 4 of the Provincial Insolvency Act the Court is not bound to go into claims raised by third parties; but there can be no doubt that the Court

did in this case deem it expedient and necessary to decide the question that the appellant raised; and if that question had been decided on the

merits, there can be no doubt at all that she would not have been entitled to raise the question again in any other litigation. The question however is

whether, in view of the fact that the petition was not disposed of on the merits but was dismissed for default, Section 4 applies. Sub-section (2) of

that section runs,

Subject to the provisions of this Act . . . every such decision shall be final and binding for all purposes as between, on the one hand, the debtor and

the debtor''s estate, and, on the other hand, all claimants against him or it and all persons claiming through or under them or any of them.

The question is, was there any decision? I find it difficult to answer that question in the affirmative. Section 5 applies the procedure of the CPC to

applications under the insolvency Act; and so the Insolvency Court, upon the failure of the plaintiff to appear, was bound to dismiss her application.

It had no choice in the matter; it made no decision.

If Section 4 does not prevent the appellant from filing a suit, it remains for consideration whether Section 5 read with the CPC prevents her from

doing so. Section 5 (2) does not say that the Code shall be applied to all proceedings; but it says,

High Courts and District Courts'', in regard to proceedings under this Act in Courts subordinate to them, shall have the same powers and shall

follow the same procedure as they respectively have and follow in regard to civil suits.

It follows from that, I consider, that the Court had the power under Order 9, rule 8, Civil Procedure, Code, to dismiss the application for default.

It is contended that the first part of rule 9 of Order 9, which says,

Where a suit is wholly or partly dismissed under rule 8, the plaintiff shall be precluded from bringing a fresh suit in respect of the same cause of

action.

is not a power given to the Court nor is it a procedure. Nevertheless, I think that the first part of Order 9, rule 9 must be applied; otherwise it

would make the other parts of Order 9 without meaning. There is no point at all in dismissing the application of a defaulting petitioner if he could

immediately come in and file a fresh application asking for precisely the same relief.

Assuming then that Order 9, rule 9 applies, does it preclude the appellant from filling a suit Mr. Padmanabha Aiyangar says that it does not, and

for two reasons. The first is that Order 9, rule 9 only prohibits a fresh suit on the same cause of action; and he says that the suit filed by the plaintiff

is not on the same cause of action as the application in the Insolvency Court. Although the cause of action indicated in the present suit is not that in

the insolvency proceeding, I do not consider that they are independent causes of action. The reason why the appellant came to the Insolvency

Court and asked for relief was that the Official Receiver was claiming that the property belonged to the insolvent and he was putting into action the

procedure to be followed in the administration of an insolvent''s estate. He began by including it in the schedule. He would then proceed to

proclaim the property and sell it and so on; but it was all part of the same procedure. The cause of action referred to in the suit is the proclamation

for sale; but that was merely a later stage of the same procedure to which he objected earlier.

The real difficulty in this appeal is with regard to the scope of the application of Order 9, rule 9 to proceedings other than insolvency

proceedings. Section 5 (1) of the Provincial Insolvency Act says,

Subject to the provisions of this Act, the Court, in regard to proceedings under this Act, shall have the same powers and shall follow the same

procedure as it has and follows in the exercise of original civil jurisdiction.

So Section 5 (1) has regard only to proceedings under the Act. If we substitute for the word ""suit"" in Order 9, rule 9 the word ""proceedings"" in

both places where the word ""suit"" occurs, then clearly Order 9, rule 9 would not prevent the filing of a suit. A suit could only be barred by

substituting ""proceedings"" for ""suit"" in the first instance and not in the second. So in attempting to apply Section 5 to bar a suit one is faced with the

double difficulty that one can only do so by omitting to substitute the word ""proceedings"" for the word ""suit"" in Order 9, rule 9, in the second

instance and that the wording of Section 5 (1) seems to limit the application of the section to proceedings under the Act.

Reference has been made to an equitable principle of election. A person has the choice of two forums. If he prefers one forum he cannot,

because he finds its decision distasteful, then have recourse to the alternative forum. No authorities have been quoted as to how far this equitable

principle, which seems to be a special application of the general principle of res judicata, can be applied; but if its application were as wide as the

learned advocate for the respondent suggests, there would be no need for Section 4 (2) of the Act. Moreover, it is not at all obvious that even on

the widest application of this equitable principle, it would bar a fresh proceeding when the point in issue had not been considered in the earlier

proceeding.

The appeal is allowed and the suit remanded to the trial Court for disposal on the merits. Costs so far incurred in all the three Courts will abide

the result.

The case having been set down for being mentioned this day, the Court made the following

ORDER

Refund certificate do issue.