TUNUGUNTLA CHINA VENKATAPPAYYA Vs. CHILANKURI PUNNAYYA

JUDGEMENT

(1.) This case arises out of a fraudulent and collusive adjudication in insolvency. The insolvent was anticipating failure in a suit brought against him by a genuine creditor and arranged with a bogus creditor to have an insolvency petition filed before the decree could be passed. This was done, but later, the original creditor fell out and another bogus creditor stepped in to continue the proceedings He put in his proof before the, Official Receiver who rejected it. An appeal was preferred to the District Judge which was dismissed. Not only that, the adjudication was set aside as well and an order was passed placing the money derived from the sale of the insolvent's property at the disposal of the court, which was executing the genuine creditor's decree. Now this order was open to two objections. The first was that the court had no power to annul the adjudication suo motu that could be done only on the application of the debtor or some other interested, person. The second was that no provision was made for the protection, of other genuine creditors such as the present appellant who were left with no prospect of getting any satisfaction for the debts they had proved in the insolvency. The appellant could and should have appealed against this order. That was his safe course. Instead, however; of adopting it he put in an application for review which the District Judge dismissed. In doing so, he followed a decision reported as Venugopalachariar v. Chinnulal Sowear 97 Ind. Cas. 706 : 51 M L J 209 : (1926) M W N 674: A I R 1926 Mad 942 : 49 M 835, and held he had no power to review an order annulling an adjudication. The decision relied on by him was concerned with the annulment of adjudications as the result of a debtor's failure to present or prosecute an application for discharge. In such cases, the annulment is under Section 43 of the Act. In the-present case it was under Section 35. The District Judge had therefore complete jurisdiction to review his prior order provided that the conditions required by Order XLVII, Rule 1 of the Civil P. C., for the exercise of such jurisdiction were existent. That brings us to the main question before us, whether any of those conditions did exist. The final authority on the interpretation of the rule is to be found in Chajju Ram V/s. Neki 72 Ind. Cas. 506: 3 Lah. 127 : 30 M L T 295 : 26 C W N 697 : 41 P L R P C 1922 : 3 P L T 433: A I R 1922 P C 112 : 16 L W 37: 17 P W R 1922: 43 M L J 332 : 24 Bom. L R 1238: 5 U P L R (P C) 99 : 36 C L J 459 : 49 I A 144 (P C). A Bench of this Court has remarked that the facts of that case "are not very clear". With great respect, one thing seems tome perfectly clear, that is, that a Full Board of the Judicial Committee decided that a wrong exposition of the law was no ground for review under the rule. The Bench of this Court above referred in Muddlapur Murari Rao V/s. Balwanth Dikshit 76 Ind. Cas. 312: 46 M 955: 45 M L J 309 : 18 L W 363 (19(sic)3) M W N 761 : A I R 1924 Mad. 98, came to the opposite conclusion. The facts were these. A District Judge dismissed a suit holding that sister's sons of the last male owner were entitled to succeed to his estate in preference to the nearest agnates. An application for review was presented on the ground that a previous ruling of this Court, which had not been cited in the argument, had laid down the law differently. The District Judge allowed the view and in appeal, his order was upheld by the High Court which thought that there was an error of law apparent on the face of the record which could be reviewed. As I understand Chhajju Ram's cane 72 Ind. Cas. 506: 3 Lah. 127 : 30 M L T 295 : 26 C W N 697 : 41 P L R P C 1922 : 3 P L T 433: A I R 1922 P C 112 : 16 L W 37: 17 P W R 1922: 43 M L J 332 : 24 Bom. L R 1238: 5 U P L R (P C) 99 : 36 C L J 459 : 49 I A 144 (P C), the Judicial Committee laid down that a mistake of law was no ground for review. There may, of course be cases such as Brindaban Chandra Ghost V/s. Damodar Prasad Ghose 85 Ind Cas. 65 : 29 C W N 148; A I R 1925 Cal, where a subsequent and contrary exposition of the law by the Judicial Committee was invoked as a ground of review. That might be described as the discovery of new and important matter which no amount of diligence could have brought to the knowledge of the applicant earlier. But in Murari Rao's case 76 Ind. Cas. 312: 46 M 955: 45 M L J 309 : 18 L W 363 (19(sic)3) M W N 761 : A I R 1924 Mad. 98, the ruling relied on was not subsequent and so far from there having been any diligence, there was negligence in not citing it. So that, on the authority of Chhajju Ram's case 72 Ind. Cas. 506: 3 Lah. 127 : 30 M L T 295 : 26 C W N 697 : 41 P L R P C 1922 : 3 P L T 433: A I R 1922 P C 112 : 16 L W 37: 17 P W R 1922: 43 M L J 332 : 24 Bom. L R 1238: 5 U P L R (P C) 99 : 36 C L J 459 : 49 I A 144 (P C) there would seem to have been no ground for review whatever.

(2.) Speaking for myself, I cannot understand how a mistake of law can be apparent on the face of the record. It may be apparent from a contrary decision of a superior court, but that is not a part of the record. I am of opinion that Murari Rao's case 76 Ind. Cas. 312: 46 M 955: 45 M L J 309 : 18 L W 363 (19(sic)3) M W N 761 : A I R 1924 Mad. 98, was wrongly decided and would refer to a Full Bench the following question:--- Had the District Judge power under Order XLVII, Rule 1, of the Civil P. C. to review his after of 10 July, 1926, on the ground of error of law, that is to say, non compliance with Section 35 of the Provincial Insolvency Act

(3.) What I conceive the Privy Council to have decided is that a mistake in law did not fall within the category of mistakes apparent on the face of the record or anything analogous to it. Krishnan Pandalal, J. 1. In Chhajju Rams case 72 Ind. Cas. 506: 3 Lah. 127 : 30 M L T 295 : 26 C W N 697 : 41 P L R P C 1922 : 3 P L T 433: A I R 1922 P C 112 : 16 L W 37: 17 P W R 1922: 43 M L J 332 : 24 Bom. L R 1238: 5 U P L R (P C) 99 : 36 C L J 459 : 49 I A 144 (P C) the reviewing court granted a review on the ground that the first decision "proceeded upon an incorrect exposition of the law". Their Lordships held that this was not covered by the words "any other sufficient cause" in Order XLVII Rule 1, because those words must be limited to "grounds at least analogous to those specified immediately previously." 2. In the present case the order of Mr. Walsh annulling the, adjudication can hardly be described as proceeding on any incorrect exposition of the law but on account of ignoring Section 35 which requires that an application is a condition of such order and there was none. There is, I submit, a difference between wrongly understanding or applying the law and not being aware of conditions legally necessary for exercising a power given by law. In a loose sense both may be said to be merely erroneous on a question of law but only in the former case is there a decision in any proper sense; the latter case may be due to inadvertence and at least analogous to error apparent on the record. Whether a particular erroneous order, due to not being aware, say, of a particular section of a Code, may justly be called error apparent on the face of the record must depend on the nature of each case depending on the obviousness of the mistake which it is to be presumed no Judge would commit if properly advised. This is I think the ground on which Murari Rao's case 76 Ind. Cas. 312: 46 M 955: 45 M L J 309 : 18 L W 363 (19(sic)3) M W N 761 : A I R 1924 Mad. 98 and Maung Sein Myi V/s. Maung Tun Pe 114 Ind. Cas. 687 : 6 R 794 : A I R 1929 Rang. 70, are to be explained. I am inclined to treat the order of Mr. Walsh of 10 July, 1926, either as an instance of error apparent on the face of the record or one analogous to it which is all that the Privy Council decision requires to give the court the power of review. If the above order was liable to review, the order of 26 August, 1926, dismissing the application for review on the ground of want of jurisdiction is also erroneous. As my learned brother takes a different view, I agree that the question may be referred to a Full Bench. 3. Opinion. The question referred to us is in consequence of a difference of opinion between Waller and Pandalal, JJ., and is as follows:-- Had the District Judge power under Order XLVII Rule 1 of the Civil P. C. to review his order of 10 July, 1926,on the ground of error of law, that is to Say, non-compliance with Section 35 of the Provincial Insolvency Ant?