JEHANGIR CURSETJI MISTRI Vs. KASTUR PANNAJI OSWAL

JUDGEMENT

(1.) IN the two suits, out of which these revision applications arise, the plaintiff sued the defendant on money claims in the Small Cause Court at Poona, the suits having been commenced on February 2, 1938. The defence in each case was that, as the defendant had been adjudicated insolvent in August, 1935, the plaintiff's suit did not lie, since he had not obtained leave to sue under Section 28 (2) of the Provincial INsolvency Act. The answer to that defence was that the insolvency had been brought to an end subject to a condition which allowed the creditors to sue.

(2.) THE material facts relating to the insolvency are that the adjudication took place in 1935, and certain sums were paid into Court by the insolvent. Subsequently he applied for his discharge, and the learned Subordinate Judge at Poona, before whom the application came, was of opinion that the debtor had not paid eight annas in the rupee, and, therefore, ought not to be given an unconditional discharge, and he made the following order : "i do not grant an absolute order of discharge but grant a conditional one the condition being that the creditors may recover their dues, if within time, until they become irrecoverable. " That seems to me to be a very singular order to make in insolvency. It destroys the whole effect of the insolvency. THE object of an adjudication in insolvency is to free the debtor from the claims of his existing creditors, which are to be satisfied out of the property of the debtor which the Court takes possession of and distributes among the creditors; and for the Court to discharge the insolvent but to leave1 him liable to debts incurred before insolvency defeats the object of the adjudication.

(3.) IT was held by Mr. Justice Tyabji in Bhimaji v. Chunilal Jhaverchand (1931) I. L. R. 57 Bom. 623 : S. C. 34 Bom. L. R. 683 that where a suit was commenced against an insolvent without obtaining leave, the suit need not be dismissed but might be stayed. Therein he differed from a previous decision of Mr. Justice Davar in In re Dwarkadas Tejbhandas (1915) I. L. R. 40 Bom. 235 : 17 Bom. L. R. 925, which had been followed by Mr. Justice Blackwell in Maya Ookeda v. Kuverji (1931) 34 Bom. L. R. 649, though the latter decision was not apparently brought to the attention of Mr. Justice Tyabji. There being conflicting decisions of Courts of co-ordinate jurisdiction, I have to determine which of them should be followed, and I have no hesitation in following the decisions of Mr. Justice Davar and Mr. Justice Blackwell. IT seems to me that the language of Section 28 (2) is perfectly plain. IT provides that after adjudication no creditor to whom the insolvent is indebted in respect of any debt provable under the 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 proceeding, except with the leave of the Court. This prohibition seems to me to impose a condition precedent to the commencement of the suit, and if the leave of the Court is not obtained, the suit must necessarily be dismissed.