HAJI ABDUL KUTHUS SAHIB (DECEASED) Vs. INAYATHULLA SAHIB

JUDGEMENT

(1.) This appeal raises the question of the effect of Section 44 of "the Provincial Insolvency Act. The first appellant was adjudicated an insolvent by the District Munsif of Trivellore on the 26 March, 1927 on a petition which had been presented on the 2nd October, 1926. The appellant apparently had no assets and as so often happens his creditors took no interest in the proceedings after the adjudication order had been obtained. The result was that when he applied for his discharge his application was not opposed and it was granted on the 8 February, 1928. The first appellant was indebted to the estate of one Habibulla Sahib, who is now represented by the respondents in this appeal. Habibulla Sahib had obtained a decree against the first appellant and on the 21 February, 1923, he attached a house as property belonging to the first appellant. As a matter of fact this property was the property of the appellant's wife, Maimoona Bi Bi. It had belonged to the first appellant, but on the 12 February, 1923 he transferred it to his wife and it was held by this Court in other proceedings that the transfer was lawful. On the 24 July, 1927 Maimoona Bi Bi applied for the removal of the attachment on the ground that the property was hers, but her application was dismissed by the District Munsif of Vellore, who relegated her to a regular suit. She filed a suit, but on the date of the hearing she did not appear and it was dismissed with costs. Therefore, so far as the respondents execution proceedings were concerned the house was liable to be seized and sold for the first appellant's debt and it undoubtedly remained liable until the 8 February, 1928 when the first appellant obtained his discharge. The question which the Court is called upon to consider in this appeal is whether the house remained liable to be seized and sold after that date. The District Munsif held that tile respondents were entitled to have the house sold and his decision was concurred in by the District Judge of North Arcot on appeal. The appellant then appealed to this Court and Venkataramana Rao, J., who heard it, decided that the Courts below had correctly interpreted the law, but he gave a certificate permitting the filing of the present appeal under Clause 15 of the Letters Patent.

(2.) Section 44 of the Provincial Insolvency Act reads as follows: (1) An order of discharge shall not release the insolvent from-- (a) any debt due to the Crown; (b) any debt or liability incurred by means of any fraud or fraudulent breach of trust to which he was a party; (c) any debt or liability in respect of which he has obtained forbearance by any fraud to which he was a party; (d) any liability under an order for maintenance made under Section 488 of the Criminal P. C., 1898. (2) Save as otherwise provided by Sub-section (1), an order of discharge shall release the insolvent from all debts provable under this Act. (3) An order of discharge shall not release any person who, at the date of the presentation of the petition, was a partner or co-trustee with the insolvent, or was jointly bound or had made any joint contract with him or any person who was surety for him.

(3.) Therefore unless a debt is of the nature of any of those set out in Sub-section (1) an order of discharge absolves the insolvent from liability to pay all his debts which were provable under the Act, but an order of discharge does not by virtue of Sub-section (3) release third parties who are also liable. The section displays no ambiguity and by reason of it the debt which the first appellant owed to the respondents became unenforceable by them.