RADHA MOHAN Vs. MCWHITE

JUDGEMENT

(1.) This is an appeal by a body of creditors against an order of the District Judge of Allahabad making a personal allowance to the insolvent out of his property for the support of himself and his family, under Section 66, Sub-section 2, of the Provincial Insolvency Act No. V of 1920. One difficulty in delivering a clear judgment in a case of this kind is that the enumeration of the appropriate sections has been altered from time to time by various Amending Acts. We will confine our observations to the sections of the present Act. Leave was required under the Act, as the counsel for the insolvent rightly objected, and was not applied for until a late stage of the proceedings, and the matter of leave was referred to the court hearing the appeal. As the case has been argued as one of principle, and appears to us to require careful consideration in view of certain existing decisions, we have granted the necessary leave, it being clearly a case in which it would have been granted if applied for at once by any court appreciating the point involved.

(2.) The insolvent is an engine driver on the East Indian Railway in receipt of a fixed salary of about Rs. 250 with various monthly allowances and accretions, due to over-time and other matters, which increase his monthly salary sometimes to nearly Rs. 500 and roughly to an average exceeding Rs. 400. The factors which must be taken into account in reducing this gross sum in order to arrive at the actual net income really enjoyed by the insolvent are not very clearly before us and, in the view which we take, do not become important. But these two facts may be stated as representing, at any rate, the minimum of what is shown, namely, that half his gross salary would be at least Rs. 200 and that the sum directed by the District Judge to be paid to the creditors, namely, Rs. 120, is certainly less than any just estimate of the actual half of the net income actually enjoyed by this engine driver. As will appear, when we come to consider the relevant sections, the expression, "directed to be paid to the creditors", is not really an accurate method of expressing it. A more accurate method is that the learned Judge has granted an allowance, out of the property prima facie divisible amongst the creditors, amounting to such a sum as when deducted from, his half salary leaves a balance of Rs. 120 divisible amongst the creditors.

(3.) There is no doubt that in the case of a person in India in receipt of a salary or pension, the maximum which is divisible amongst the creditors is half. That maximum is fixed by statute. Section 28, the ordinary vesting section, makes the whole of the property of the insolvent, on adjudication, divisible amongst the creditors, but excepts, by Sub-section 5, from the property so divisible, any property which is exempted by the Civil P. C. from attachment. Section 60 of the Civil P. C., in the case of this engine driver, exempts half his salary from attachment. The combined operation, therefore, of Section 28(5) of the Provincial Insolvency Act and Section 60(i)(iii) is to make only half his salary divisible amongst the creditors. The creditors in this appeal contend that that amount is not only the maximum but the minimum; in other words, that the personal allowance which Section 60 of the Civil P. C. leaves to the enjoyment of the ordinary debtor by exempting it from attachment, is the only sum which a court in insolvency can allow an insolvent under its jurisdiction to enjoy for the support of himself and his family. So stated, the contention sounds reasonable. But the difficulty of accepting it is this. Section 66, Sub-section (2), of the Provincial Insolvency Act provides that the court may from time to time "make such allowance as it may think just to the insolvent out of his property for the support of himself and his family, and such allowance may, at any time, be varied or determined by the court." If both the maximum and the minimum are fixed by statute, this provision is nugatory and might as well be struck out, of the Act in every case in which a man is earning his income by salary to which Section 60 of the Code is applicable. Indeed the contention is that this sub-section of the Insolvency Act is unworkable in the case of a person paid by salary, and; therefore, cannot be held to apply to him at all. But if it was intended to fetter the discretion of the insolvency court in the case of a man who is earning his money by salary, and his half salary was already protected by the operation of Section 60 of the Civil P. C., the Legislature ought to have said so. The argument really invites us to legislate, rather than to "interpret. The language of the sub-section itself, namely, the use of the word "property" without qualification, clearly includes that part of his property, or, in other words, his half salary, which by the joint operation of the two sections already referred to becomes divisible amongst the creditors under Section 28 of the Insolvency Act. Three cases have been cited to us which seem to support the contention of the creditors, although they may, if one were disposed to enlarge upon fine distinctions, be said to be not strictly in point. But in substance it does appear to have been decided that the amount which an insolvent may be allowed for maintenance is irrevocably fixed by Section 60 of the Civil P. C.. We are not satisfied that either of the courts in the cases cited really intended to go to that length, although they used language which appears to produce that result. If they meant-that the amount fixed by Section 60 of the Civil P. C. so fettered the discretion of the learned Judge that he could not depart from it, we find ourselves unable to agree with that view, because we think that it is equivalent to a refusal to apply the express language of Section 66, Sub-section (2). But really the argument pushed to its logical conclusion must come to this that, inasmuch as Section 60 fixes the sum both as regards maximum and minimum in all cases of salary, the Court of Insolvency has no jurisdiction under Section 66, Sub-section (2) to touch the matter. In other words, Section 60 has removed it from the Insolvency Court's cognizance, and that any attempt by the Insolvency Court to alter it by one pice would be ultra vires. That is the contention of Mr. L.M. Banerji, who is always logical, in pressing the view of the appellants, and that is the inevitable result of the argument, hut we are not satisfied that the Courts in the cases relied upon intended to go to that length.