MOKSHAMADANLAL Vs. HARIPRASAD VISHNUPRASAD

JUDGEMENT

(1.) ONE Chhotubhai obtained a decree against the respondent for Rs. 559-5-6 in Civil Suit No. 120 of 1939 of the file of the Civil Judge (Junior Division) at Broach. The decree was passed on 17-11-1939. The decree was assigned by the decree-holder Chhotubhai to the petitioner. The petitioner as assignee of the decree filed, on 5-12-1950, an application in the Court of the Civil Judge (Senior Division), Broach, exercising Insolvency jurisdiction for serving a notice of insolvency upon the respondent under Section 6a of the Provincial Insolvency Act. The respondent failed to comply with the notice within one month. The Insolvency Court at Broach passed an order on 23-2-1951, "holding that an act of insolvency had been committed by the respondent. The petitioner then applied on 23-4-1951 by Miscellaneous Application No. 2 of 1951 to the Insolvency Court at Broach for an order adjudicating the respondent an insolvent. The respondent appeared in answer to the notice and contended that the Court at Broach had no Jurisdiction to adjudicate him insolvent. The Insolvency Court at Broach accepted the contention of the respondent and by order dated 14-11-1951 ordered that the petition be returned for presentation to the proper court. On 15-11-1951, the petitioner presented the petition to the Court of the Civil Judge, (Junior Division), at Borivli, Bombay Suburban District. The respondent contended that the petition filed against him in the Borivli Court did not comply with the conditions prescribed by Section 9 of the Provincial Insolvency Act and the Court had no jurisdiction to adjudicate him insolvent. The learned Insolvency Judge heard the objection relating to jurisdiction as a preliminary issue and by order dated 24-10-1952, held that the Court had jurisdiction to adjudicate the respondent insolvent even though the petition was filed in the Borivli Court more than three months after the act of insolvency on which the petition was grounded had occurred. In so holding, the learned Insolvency Judge relied upon Section 14 of the Indian Limitation Act and held that the time spent in the Broach Court was liable to be excluded, in computing the period of three months, and if the time was so excluded, the petition complied with the condition prescribed by Section 9 (1) (c) of the Provincial Insolvency Act. In other words the learned Insolvency Judge held that the period prescribed by Section 9 (1) (c) was a period of limitation and Section 14 of the Limitation Act applied to applications for adjudication.

(2.) THE respondent preferred an appeal to the District Court at Thana and the District Judge reversed, the order passed by the Insolvency Judge. The learned District Judge held that the period prescribed by Section 9 (1) (c) was not a period of limitation and the petition not having complied strictly with the requirements of Section 9 of the Provincial Insolvency Act, was liable to be rejected. The learned District Judge accepted the contention of the Respondent that institution of proceedings within the period prescribed by Section 9 (1) (c) was a condition precedent to the exercise of jurisdiction by the Insolvency Court. The learned Judge set aside the order of adjudication and dismissed the petition filed by the petitioner. The petitioner has applied to this Court in revision under Section 75 of the Provincial Insolvency Act.

(3.) SECTION 9 of the Provincial Insolvency Act prescribed "conditions on which a creditor may petition" for adjudicating his debtor an insolvent. Sub-section (1) of Section 9 states :