GUSTASP BEHRAM IRANI Vs. BHAGVANDAS SOBHARAM

JUDGEMENT

(1.) (After recounting the facts stated above, his Lordship proceeded:) We are concerned in this appeal with regard to the item of Rs. 513-5-9, costs awarded by the High Court in the application for leave to sue. The learned Subordinate Judge disallowed the contention of the appellant who was a discharged insolvent and allowed execution to proceed. It is contended in this appeal that the decree is a nullity as the High Court in allowing the leave ordered the costs of the application to be tacked on to the mortgage debt due to the respondent by the estate of the said insolvent, and that a personal decree with respect to the costs of the application ought not to have been passed. This objection ought to have been raised by the appellant defendant in the suit. He did not raise that contention and the decree was passed against him and must be executed as it stands. Further, the order passed in the application for leave to sue does not necessarily preclude the Court from passing a personal decree with regard to the amount of costs in the application for leave to sue.

(2.) It is next contended that even if the decree is not a nullity the mode of execution is erroneous, and that the decree holder ought not to be allowed to execute the decree against the property of the insolvent after his discharge. It is urged that under Schedule 2, Presidency Towns Insolvency Act, Rule 9, a mortgagee, after he finds that the realization of the mortgaged property is not sufficient for the payment of the mortgage amount, can prove for the balance of the mortgage money as a debt in insolvency. It is further contended that Under Section 46, Clause (3), Presidency Towns Insolvency Act, the decretal debt would be provable in insolvency, and Under Section 45, Clause (2), the order of discharge shall release the insolvent from all debts provable in insolvency.

(3.) The question therefore arises whether the decretal debt with regard to the costs in the application for leave to sue is a provable debt within the meaning of Sub-section (3), Section 46. Apart from authority, in order that a debt should be provable, it must appear that the insolvent was subject to such debt or liability at any time before his discharge by reason of any obligation incurred before the date of the adjudication. The debt or the liability would not be provable if the debtor becomes subject to it after his discharge, or if he becomes subject to it by reason of any obligation incurred after the date of the order of Adjudication. In the present case the order for costs was passed after the date of the adjudication, and the obligation to pay the debt was incurred at the time when the order for costs was passed. The liability therefore to pay the costs accrued on 9 August 1926, after the appellant was adjudged an insolvent on 15 July 1924. Though the word "debt" includes a judgment debt according to Section 2(b) of the Act, the obligation to pay the costs is one which accrued after the date of the adjudication and in respect of which there could be no proof in insolvency, and which remained a debt enforceable against the insolvent after and notwithstanding his discharge.