Munguluri Sivaramayya vs Singumahanti Bhujanga Rao and Another

Oldfield, J.—The appellant is tenth creditor of a person who has been adjudicated insolvent by the District Judge of Godavari and besides

being an unsecured creditor has according to his counter-affidavit filed in the lower Court a mortgage on part of the property now in question. The

petitioner in the lower Court, here respondent, is another creditor who alleged in his petition, Insolvency Application No. 551 of 1913 that he held

an agreement executed by the insolvent, his eon, to transfer the property to him in discharge of his debt, that he had once prayed for execution of a

document by the Court or Official Receiver in whom the assets had vested, that receiving no orders he had later asked for leave to sue and that

again receiving no orders he finally asked for a direction to the Official Receiver to execute the document. Respondent made the defendant alone a

party to his petition and appellant says in his counter-affidavit that he-appeared to oppose it after hearing of it merely by chance. The lower Court

passed the order under appeal directing the Official Receiver to execute a transfer as prayed. It also in the same order allowed a claim by

respondent to two items as his own, and not the insolvent''s property.

One defect in this order is that it makes no reference to the important contentions of appellant inter alia that the agreement, in question could not

prevail against his mortgage for want of registration and was unenforceable owing to lapse of time and that the claim to two items which does not

appear to have been made in the petition under disposal, bad already been negatived by the Court after enquiry. But the proceedings were subject

to the more fundamental objection, that though the insolvent''s assets had vested in the Official Receiver u/s 16(2)(a), Provincial Insolvency Act,

the lower Court dealt with them by its order in the absence of that officer and without hearing his objections. We are astonished that this mistake

should have been made; and we cannot� regard it as rectified by the impleading of the Official Receiver in this Court. The result is that the lower

Court has passed an order irregular in a material respect and of no legal effect since the person directly concerned has had no opportunity to

oppose it.

It is however argued that no interference with this result is possible, because this appeal is out of time inasmuch ad Section 46(4), Provincial

Insolvency Act, contains nothing authorizing an appellant to deduct time spent in obtaining copies from the period of limitation it fixes and, the

Provincial Insolvency Act being a special law within the purview of Section 19(1)(b) of the Limitation Act, Section 12(2) of the enactment is also

inapplicable; and it is further contended that Section 5 of the Limitation Act is inapplicable for similar reasons and that we therefore cannot take the

coarse which my learned brother proposes and excuse the delay. On the first point I should follow Abu Backer Sahib v. Secretary of State for

India ILR (1911) Mad. 505 in preference to Dropadi v. Hera Lal ILR (1912) All. 496 holding that valid ground for distinguishing between cases

under the Madras Forest Act and the Provincial Insolvency Act has not been shown and decide that the appeal is out of time. On the second point

I should not be prepared to dissent from my learned brother''s proposal to give weight to the circumstances of the case and the novelty of this

objection and excuse the delay if it were clear that it could legally be excused and if the matter were res Integra, I should be inclined to the view

taken in Nija butoolla v. Wazir Ali ILR (1882) Calc. 910 Forest Act Reference ILR (1887) Mad. 211 and Seshama v. Sankara ILR (1889) Mad.

1 that the general provisions of the Limitation Act including Section 5 are applicable inasmuch as they do not alter or affect any period of limitation

within the meaning of Section 29(1)(b). Later decisions however of this Court--Veeramma v. Abbiah ILR (1895) Mad. 99 and Appa Rau Sanayi

Aswa Rau v. Krishnamurti ILR (1897) Mad. 249--are to the contrary effect, and it would be necessary either to follow them or refer the matter to

a Full Bench for authoritative decision.

My learned brother however agrees with me that in the exceptional circumstances of this case an alternative course is open to us which we

propose to take--to treat the appeal as a revision petition and deal with it as such u/s 15 of the Charter Act. Those exceptional circumstances

consist in the clear illegality of the lower Court''s action, the fact that its order may if acted on prejudice the creditors as a body, though it cannot

really bind them or the Official Receiver who represents them. There is the further circumstance that, if interference is delayed, respondent might

alienate the property and irreparable loss might result. Abdulla v. Salaru ILR (1896) All. 4 is a precedent for interference with an appealable

decision. In these circumstances we revise the lower Court''s order by setting it aside and directing that the petition before it be reheard, after the

Official Receiver has been made a party and be disposed of with reference to all of his and appellant''s contentions. There will be no order as to

costs in this Court. Costs to date in the lower Court will be provided for in the order it eventually passes.

Sadasiva Ayyar, J.

I entirely agree that the District Judge''s order has to be set aside for the reasons given by my learned brother, so I concur in the order passed

by him u/s 15 of the Charter Act.

On the question whether Section 5 of the Limitation Act gives this Court the power to excuse the delay in the presentation of this appeal, I agree

with the decisions in Nija butoolla v. Wazir Ali ILR (1882) Calc. 910. Forest Act Referenc ILR (1887) Mad. 211 and Seshama v. Sankara ILR

(1889) Mad. 1 which answer that question in the affirmative. Veeramma v. Abbiah ILR (1895) Mad. 99 was not concerned with the power of the

Court to excuse delay u/s 5 but with the provisions of Section 7 of the old Limitation Act (present Section 6) the application of which provisions

would have ''affected'' and ''altered'' the period of limitation provided by a special statute by excluding the interval during which the plaintiff was

under disability and thus by lengthening the period. The decision in Appa Rau Sanayi Aswa Rau v. Krishnamurti ILR (1897) Mad. 249 no doubt

interprets the reasoning in Veeramma v. Abbiah ILR (1895) Mad. 99 as involving the conclusion that Section 5 of the Limitation Act is also

inapplicable to a case governed by a special statute. With the greatest respect I feel inclined to doubt if the reasoning of all the three Judges who

decided Veeramma v. Abbiah ILR (1895) Mad. 99 really leads to that conclusion though some of the observations in the judgment of one of the

learned Judge''s (Shepherd, J.) might so point. I respectfully dissent from the decision in Appa Rau Sanayi Aswa Rau v. Krishnamurti ILR (1897)

Mad. 249, the learned Judges who decided that case themselves conceding that the argument urged before them in favour of the applicability of

Section 5 appeared ""to have considerable force.