Swami Kotayya vs Thunuguntla Venkata Rangarao

King, J.—This petition raises the question whether when a debtor has been adjudicated an insolvent under the Provincial Insolvency Act his

creditor can, without the leave of the insolvency court, file an execution application against him with a prayer for his arrest. Our decision depends

upon the interpretation of Section 28(2) of the Provincial Insolvency Act which runs as follows:

On the making of an order of adjudication the whole of the property of the insolvent shall vest in the court or in a receiver as hereinafter provided,

and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in

respect, of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property of the

insolvent in respect of the debt, or commence any suit or other legal proceedings, except with the leave of the court on such terms as the Court

may impose.

At first sight the interpretation is simplicity itself for an execution petition is obviously a legal proceeding and it is admittedly in this case ''in

respect of a debt provable in the insolvency. Nor do any difficulties arise from the decisions of our own High Court. In Easwara Aiyar v.

Govindarajulu Naidu I.L.R.(1915) 39 Mad. 689 it was held that the words ''or other legal proceeding'' occurring in precisely the same context in

Section 17 of the Presidency Towns Insolvency Act include applications in execution with a prayer for arrest. In Alamelu Animal v. Venkatarama

Aiyar I.L.R.(1927) 50 Mad. 977 : 53 M.L.J. 422 this interpretation of Section 28 of the Provincial Insolvency Act seems to have been accepted

as so self-evident that no alternative case was put forward.

Outside Madras, however, there is no unanimity of opinion. Though the High Courts of Lahore and Patna agree with the Madras view, those of

Bombay and Allahabad do not see Mahomed Roshan v. Gulam Mohidin AIR (1929) Bom. 135 Maharaj Hariram v. Sri Kishan Ram I.L.R.

(1926) 49 All. 201 and Ali Husain v. Lachhmi Narain Mahajan I.L.R.(1931) 54 All. 416. The contrary view is based upon two reasons.

(1) If Section 28 gives automatic protection against an execution petition for arrest Section 31 is superfluous;

(2) In the old Provincial Insolvency Act of 1907 the section corresponding to Section 28 ran ""shall have any remedy against the property or person

of the insolvent"". It was those words which prevented the filing of an execution petition for arrest. The words ''or other legal proceeding'' could not

therefore in 1907 refer to any such execution petition nor can they so refer now when the words ''or person'' have been deleted from the section in

the 1920 Act.

This view has been strenuously pressed before us on behalf of the respondent. If accepted, however, it would involve not only a straining of the

ordinary meaning of ordinary words, but also a conflict of decisions in interpreting those very same words, occurring no doubt in different Acts, but

in exactly the same context, as the reasons put forward have no application to the Presidency Towns Insolvency Act. We do not think the reasons

put forward are cogent enough to compel us to reach such a conclusion.

In the first place the superfluity of Section 31 is by no means established. An important distinction has been overlooked between execution

petitions which are pending and execution petitions which have not yet been instituted at the time of the adjudication. In the former case there is

nothing now in the Act to prevent the creditor from proceeding to arrest his debtor unless the debtor applies to the court for protection u/s 31 (on

the assumption that is, that the debtor has not already applied u/s 23). There is still therefore scope for the application of Section 31. And the

second argument in our opinion depends upon an artificial analysis of the old section. We see no logical reason why the words ''or other legal

proceeding'' should not, under the old Act, have prevented the institution of proceedings for arrest, and the words ''have no remedy against the

person'' have protected the insolvent from actual arrest. If the word ''remedy'' is to be given the wide meaning which it has been given in Ali Husain

v. Lachhmi Narain Mahajan I.L.R.(1931) 54 All. 416 then it would appear to us that the whole of the clause ''commence any suit or other legal

proceeding'' is itself superfluous for the mere filing of a suit would be a remedy against the insolvent''s property. For these reasons we think that we

must decline to dissect the sections in the two Acts in this way, or to speculate upon the intentions of the legislature so as to narrow down the

meaning of the plain words ''or other legal proceeding''. We prefer to follow Easwara Aiyar v. Govindarajulu Naidu I.L.R.(1915) 39 Mad. 689

and like the learned judges who decided that case ''are not prepared to cut down the broad principle upon which the section is based, namely, that

when once a person is adjudicated insolvent, creditors seeking any remedy against him must come to the insolvency court to get leave for that

purpose''. We accordingly allow this petition with costs and set aside the District Munsif''s order.