Munjuluri Sivaramayya vs Singumahanti Bujanga Rao and Another

Oldfield, J.—The appellant is 10th creditor of a person, who has been adjudicated insolvent by the District Judge of Godaveri, 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 Appeal No. 551 of 1913 that he

held an agreement, executed by the insolvent, his son, 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, had already been negatived by the Court after inquiry. 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 as Section 46(4), Provincial

Insolvency Act, contains nothing authorising 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 29(1)(b) of the Limitation Act, Section 12(2) of the latter enactment is

also inapplicable; and it is further contended that Section 5 of the Limitation Act, is inapplicable fur similar reasons and that we, therefore, cannot

take the course, which my learned brother proposes and excuse the delay. On the first point I should follow Abu Baker Sahib v. Secretary of

State for India 5 Ind. Cas. 884 in preference to Dropadi v. Hira Lal 16 Ind. Cas. 149 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 Nijabutoolla v. Wazir Ali 10 C.L.R. 333. Reference under Forest Act V of 1882 10 M.K 210 and Seshama v. Sankara 12 M.K 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)(6). Later decisions however of this Court, Veeramma v. Abbiah 18 M.K 99 and Appa Rau Sanayi Aswa Rau

v. Krishnarnurthi 2 M.K 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. Abdullah v. Salaru (1895) A.W.N. 124 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 re-heard 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 Aiyar, J.

I entirely agree that the District Judge''s order has to be set aside for the reasons give 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 of Nijabutoolla v. Wazir Ali 7 Ind. Jur. 84. Reference under Forest Act 10 M.k 210 and Seshama v. Sankara 12 M.lk1 which

answer that question in the affirmative. The case of Veeramma v. Abbiah 18 M.k 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. Krishnamurthy 7 M.L.J. 94 no doubt, interprets the reasoning

in Veeramma v. Abbiah 18 M.k 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 the case of Veeramma v.

Abbiah 18 M.k 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 of Appa Rau Sanayi Aswa Rau v. Krishnamurthy 20 M.k 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.