Ponnath Kalyani Amma's son Eacharan Nair vs Cherikkottil Sayed Rowther's son Family Manager, Chinnayya Rowther (died) and Another

Govindarajachari, J.—The petitioner is the legatee under a will of two ladies, Amman and Channammu, of a mortgage executed in their

favour on 8th June, 1931, by the respondent. The mortgage was repayable on 13th July, 1932. The ""respondent was adjudged insolvent on 3rd

January, 1933, but the adjudication was annulled on 27th August, 1943. The suit out of which this civil revision petition arises was filed on 13th

July, 1944, for a money decree, the plaintiff having given up his security. The suit was dismissed by the lower Court on the ground that it was

barred by limitation. The petitioner relied on Section 78(2) of the Provincial Insolvency Act and sought an exclusion of the period from the date of

the order of adjudication to the date of the order of annulment. It is not denied that if that exclusion is made, the suit would be in time. It was

however contended by the respondent, and that contention found favour with the Court below, that Section 78(2) of the Act did not apply

because the debt is one provable but not proved under the Act. It is admitted that the petitioner had not proved the debt in the insolvency of the

respondent. The petitioner''s contention in the Court below was that the debt is not one provable under the Act. This contention was not accepted

by the lower Court. The same point is raised before me on the petitioner''s behalf.

It seems to me that the question is directly covered by the decision in Chokkalinga Mudali Vs. Manickka Mudali alias Singara Mudali, in which

Leach, C.J. and Happell, J., held on a consideration of Sections 28(2) and (6), 34 (2), 44 and 47 that a secured debt is not ordinarily provable in

insolvency and that it is provable only in the three contingencies contemplated by Sub-sections (1), (2) and (3) of Section 47; or in other words

that except where a secured creditor realises his security or relinquishes it or values it, he is not bound to prove his debt in the insolvency of his

debtor. Chokkalinga Mudali Vs. Manickka Mudali alias Singara Mudali, no doubt arose u/s 44 of the Act and did not deal with any question of

limitation; but the point that arose in that decision would equally apply where the question that falls to be considered in applying the provisions of

Section 78(2) of the Act is whether a mortgage debt is or is not provable in insolvency.

The lower Court assumed that at the instance of a prior mortgagee, the mortgaged property had been sold up in execution of his mortgage

decree some time before the order of annulment. It seems this assumption is not correct and from a certified copy of the suit register relating to that

suit the. petitioner''s counsel states that neither the petitioner nor his predecessors-in-title were parties to the suit of the prior mortgagee and that

their rights therefore are left unaffected by that decree and any execution proceedings which might have followed it.

Apart from this, however, and even assuming that there was a mortgage decree obtained by the prior mortgagee binding on the petitioner and

that in execution of it the entire mortgaged property was sold away, it seems to me that the principle of Chokkalinga Mudali Vs. Manickka Mudali

alias Singara Mudali, must be applied and the exclusion of the period claimed by the petitioner allowed in his favour. That decision is not

distinguishable on the ground that it did not deal with a case where there were two mortgage decrees or with a case where the security was no

longer available to the mortgagee by reason of its having been sold away by a prior mortgagee. As I understand it, that decision recognises only

three exceptions to the general rule which dispenses with proof of a mortgage debt in insolvency proceedings. It is not possible to say that the

present case falls under any of those exceptions and it is clearly not a case in which Sub-section (1) of Section 47 could apply because it cannot be

said that the petitioner realised his security and there was still a balance due to him.

For the above reasons I hold that the suit is in time, set aside the decree of the lower Court and pass a decree as provided for with costs here

and in the Court ''below against the estate of the deceased first respondent in the hands of the second respondent. Court-fee payable on the plaint

will be paid by the 2nd respondent out of the said estate. Interest will be payable at 6 per cent per annum from the date of suit till payment on the

amount of Rs. 1,000 which is the principal claimed.