CHINNIYA PILLAI Vs. SUBBARATNAM PILLAI

JUDGEMENT

(1.) The question that falls to be decided in this revision petition is whether a person whose adjudication is annulled under Section 43 of the Provincial Insolvency Act is disqualified for election as a member of a Local Board as an undischarged insolvent under Section 55(2)(b) of the Madras Local Boards Act. The respondent was adjudicated insolvent in 1928 and the adjudication was annulled in 1932 as he did not apply for discharge within the time prescribed. He was elected as a member of the Samayapuram-Kannanore Panchayat Board in June, 1938. Apparently no objection was raised on the ground of disqualification when he offered himself for election nor was any proceeding instituted to set aside his election after he was elected, but the petitioner who was also a member of the Board applied under Section 57 on 21 November, 1938, to the District Judge, Trichinopoly, in which the area of the Local Board is situated, to determine whether or not the respondent was disqualified under Section 55 of the Act. The learned District Judge held that the adjudication of the respondent having been annulled, he could not be said to be an undischarged insolvent and accordingly rejected the application. This civil revision petition is directed against that order.

(2.) The petitioner's learned Counsel contends that the expression undischarged insolvent should be understood in a literal sense and that once a person was adjudicated insolvent he remained an undischarged insolvent unless he obtained an order of discharge, though the adjudication itself was subsequently annulled. I have no hesitation in rejecting this contention, as its acceptance would lead to the obvious anomaly that a debtor who has obtained his discharge on a partial payment of his debts would be qualified for election to Local Boards, whereas a person whose adjudication has been annulled under Section 35 of the Provincial Insolvency Act either on the ground that he ought not to have been adjudged insolvent or that his debts have been paid in full, would continue to be disqualified for such election as he would be an undischarged insolvent in the sense contended for by the petitioner's counsel. This certainly could not have been the intention of the Legislature in enacting Section 55(2)(b). The petitioner's learned Counsel recognising this, reductio ad absurdem endeavoured to draw a distinction between an annulment of adjudication under Section 35 and an annulment under Section 43 of the Provincial Insolvency Act, on the ground that annulment under the latter provision does not remove the taint of insolvency but only emphasises the debtor's insolvent state, and he placed ^reliance on Section 73 of that Act as recognising the distinction. Apart from this section the bearing of which on the question in dispute I will presently consider, the Act makes no distinction between annulments of adjudication based on one ground or another so far as their legal effect is concerned. There are three sections in the Act which provide for annulment of adjudication, namely, Secs.35, 39 and 43, and Section 37, which indicates what consequences are to follow on such annulment, is made applicable in each case. It seems to me therefore that annulment of adjudication on whatever ground it is based, must be taken to -put an end to the legal character of an insolvent which adjudication under the Act confers upon a debtor. The extinction of such character due to annulment may operate to the advantage or to the prejudice of the person concerned according to the circumstances in which his adjudication is annulled, but it is clear that he can no longer be regarded in the eye of the law as an insolvent. It follows therefore that the respondent in this case cannot be held to be an undischarged insolvent .

(3.) It remains to consider whether this conclusion is affected. by anything contained in Section 73 of the Provincial Insolvency Act. That section relates to disqualification of insolvent debtors and so far as it is material here, runs thus: 73. (1) Where a debtor is adjudged or read judged insolvent under this Act, he shall, subject to the provisions of this section, be disqualified from- (c) being elected or sitting or voting as member of any local authority. (2) The disqualifications which an insolvent is subject to under this section shall be removed and shall cease if- (a) the order of adjudication is annulled under Section 35, or (b) he obtains from the Court an order of discharge, whether absolute or conditional, with a certificate that his insolvency was caused by misfortune without any misconduct on his part.