MAGANDAS BHUKANDAS Vs. BHALCHANDRA RAMRAO

JUDGEMENT

(1.) THIS is an execution appeal which raises a short question of limitation under Section 78 (2) of the Provincial Insolvency Act. On 15-7-1927, an aware decree was passed in favour of the appellant for Rs. 1,800. The decretal amount was made payable by annual instalments and it was provided that, if there was a default in the payment of three instalments, the whole of the decretal amount could be recovered. Several darkhasts were filed by the decree-holder to recover the decretal amount. The last one of these was No. 815 of 1937; it had been filed on 10-7-1937, and it was finally dispose of on 17-10-1938. On 22-1-1941, the decree-holder himself filed an application in insolvency against the judgment-debtor, which was Application No. 1 of 1941. Pending this application, he filed a darkhast No. 124f of 1942 to execute his award, decree. This darkhast was filed on 17-11-1942. Meanwhile, the insolvency proceedings continued and the judgment-debtor was adjudged an insolvent on 24-1-1949. An appeal was preferred by the judgment-debtor against this order and he succeeded before the appellate Court. On 18-10-1949, the appeal was allowed and the application of the decree-holder was dismissed. It is common ground that the order of dismissal of the decree-holder's application against his judgment-debtor amounts to the annulment of the judgment-debtor's insolvency. When the decree-holder sought to proceed with his darkhast which he had filed on 17-11-1942, he was met with a plea of limitation, and he sought to bring his darkhast within time by relying on the provisions of Section 78, Sub-section (2) of the Provincial Insolvency Act. It is common ground that, if the decree-holder is entitled to avail himself of the provisions of Section 78 (2) of the Provincial Insolvency Act, in the manner suggested by him, his darkhast would be in time. It is also common ground that, if he is not entitled to rely upon the said section, in the said manner, his darkhast would be beyond time. That is how the only question which arises for decision in the present appeal is whether the decree-holder is entitled to exclude the period between 22-1-1941 and 18-10-1949, in deciding the question as to whether his darkhast is in time. The executing Court took the view that the decree-holder was entitled to exclude this period and so he held that the darkhast was in time. Accordingly he directed that the darkhast do proceed in accordance with law. On appeal, a different view has been taken and the learned District Judge has dismissed the darkhast on the ground that it is barred by limitation.

(2.) SECTION 78, Sub-section (2), Provincial Insolvency Act, provides that, where an order of adjudication has been annulled, in computing the period of limitation prescribed for any suit or application for the execution of a decree which might have been brought or made but for the making of an order of adjudication under this Act, the period from the date of the order of adjudication to the date of the order of annulment shall be excluded. The decree-holder contends that, in deciding the question as to which period should be excluded under the provisions of Sub-section (2) of Section 78, we must bear in mind another provision of the Provincial Insolvency Act and that is contained in Section 28, Sub-section (7 ). This Sub-section gives effect to the doctrine of relation back and lays down that an order of adjudication shall relate back to, and take effect from, the date of the presentation of the petition on which it is made. It is, therefore, urged before us that, in considering the period which should be excluded in the present case, we must take into account, not so much the date on which the order of adjudication was passed, but the date on which the application for insolvency itself was made. There is no doubt that, if we were to exclude the period between 24-1-1949, when the judgment-debtor was adjudged insolvent, and 18-10-1949, when the adjudication was annulled, the darkhast would not be within time. It is only if we exclude the whole of the period between the date of the presentation of the application and the date of annulment that the darkhast would be in time. That is why Mr. Gupte for the decree-holder has strenuously urged before us that we must read the provisions of Section 78 (2) in the light of the provisions of Section 28 (7), Provincial Insolvency Act.

(3.) IN dealing with this question, it is necessary to remember that Sub-section (7) of Section 28 introduces a legal fiction and gives effect to the order of adjudication in a somewhat artificial manner. Indeed, the marginal note of Section 28 shows that the section deals with the effect of an order of adjudication. Undoubtedly, when an order of adjudication has been made, for several purposes mentioned in the Provincial Insolvency Act the order must be deemed to relate back and must be held to take effect from the date of presentation of the petition on which it is made. But the question, which we have to decide is whether this same doctrine of relation back must necessarily be invoked in construing the words used in Section 78 (2 ). Looking at the words of Sub-section (2) of Section 78, it seems to me fairly clear that what is intended as the first starting point is not the order of adjudication as such, but the date of the order of adjudication. The section in terms speaks of the date of the order of adjudication as well as the date of the order of annulment. Whatever may be the legal effect of the order of adjudication under the insolvency law, it seems to me somewhat difficult to accede to the argument that the doctrine of relation back should govern the construction of the words "the date of the order of adjudication". The order of adjudication bears a date and it is to that date that Section 78 (2) makes a direct and specific reference. In my opinion, it would be difficult to give effect to the doctrine of relation back in interpreting the expression "the date of the order of adjudication".