DADULAL Vs. NAMDEO

JUDGEMENT

(1.) STAPLES , A.J.C. 1. The appellants brought a suit for a declaration that certain property attached by respondents 1 to 5 in execution of their decree against respondents 6 and 7 was not liable to attachment and sale as it belonged to them, having been sold to them previously. They had previously presented an objection to the Court executing the decree, but that objection was dismissed tinder Order 21, Rule 58. They then filed a regular suit under the provisions of Order 21, Rule 63. A preliminary issue was framed whether the case required the sanction of the insolvency Court, and on that issue the Judge of the lower Court found that the sanction was necessary, and on that finding he dismissed the suit. The plaintiffs have now appealed. The learned Counsel for the appellants contended that no sanction of the insolvency Court was required under Section 28, Provincial Insolvency Act in a declaratory suit of this nature and he cited in this connexion Harnam Chandar v. Rup Chand ; Rura v. Official Receiver, Amritsar, A. I. R. 1930 Lah. 708; Maharana Kunwar v. E.V. David AIR 1924 All 40 and Sant Prasad Singh v. Sheodut Singh . All those cases however are of a stranger who was not a party to the insolvency proceedings, and it is no doubt correct that a stranger can file a declaratory suit in regard to property of an insolvent without obtaining the leave of the insolvency Court.

(2.) IN the present case however the appellants are creditors of the insolvent and they are on the list of the scheduled creditors in the insolvency proceedings. They cannot therefore contend that they are strangers and, although their suit is only a suit for a declaration, their objection to the attachment had previously been dismissed and, as held by the lower Court, prima facie the property attached now belongs to the insolvent and therefore vests in the receiver under Section 28 of the Act. The lower Court has rightly followed the case in Trimbak v. Sheoram AIR 1922 Nag 108, where a declaratory suit was brought by the decree-holder who had obtained a decree against the judgment-debtor, who was adjudged an insolvent. The other cases cited, Louis Dreyfus & Co. v. Jan Mohamad AIR 1919 Sind 42, is to the same effect, and therefore I would hold, as stated above, that, whereas a stranger to the proceedings can file a declaratory suit against an insolvent without the leave of the Court, a decree-holder of the insolvent or a creditor, who has been a party to the insolvency proceedings, cannot bring such a suit without the leave of the Court under Section 28(2) of the Act. The lower Court has further rightly held that failure to obtain leave before the institution of the suit cannot be cured by obtaining leave subsequently. This has been clearly laid down in Trimbak v. Sheoram AIR 1922 Nag 108 and also in In re. Dwarkadas Tejbhandas (1916) 40 Bom 235 and Ghouse Khan v. Subba Rowther AIR 1927 Mad 925. I therefore confirm the decree of the lower Court and dismiss the appeal. Costs of the appeal will be borne by the appellants. Other costs as ordered by the lower Court. I fix pleader's fees at Rs. 50.