AJODHIA PERSHAD Vs. SARI RAM

JUDGEMENT

(1.) This is a first appeal from order by one Ajodhis Pershad against an order, dated 13 May 1933, by a learned Subordinate Judge of Aligarh refusing the applications of Ajodhis Pershad for restoration of a suit which had been decreed ex parte against him on 15 November 1932. A preliminary objection was taken by the decree-holder, the opposite party, to the effect that prior to the date of the suit the defendant had become an insolvent in Calcutta and an Official Assignee had been appointed to take charge of the property of the insolvent. The date of the order of the insolvency was 25 August 1932. The suit in question was a suit for recovery of money by sale on the basis of a simple mortgage. Now, learned Counsel for the respondent objector states that under Section 17, Presidency Towns Insolvency Act, on the making of an order of adjudication no creditor shall commence any suit without the leave of the Court. There is a proviso to that section which states: Provided that this section shall not affect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with it is this section had not been passed.

(2.) For the decree-holder the argument is that the section requires that even in the case of a secured creditor, such as the decree-holder, he should bring a suit against the Official Assignee. The decree holder therefore according to the admission of his counsel broke the provisions of this Section 17, when he brought his suit against the mortgagor alone for enforcement of the mortgage by sale. He has now obtained a decree for sale. The objection, therefore, is that although the decree holder has broken Section 17, Presidency Towns Insolvency Act, he can still hold up that section as a bar against the defendant who desires to bring an appeal against the decision of the lower Court. It appears incorrect on general principles that a person who has broken a particular provision of law should be enabled by the same provisions of law to prevent the Courts of law from interfering in the matter. We refer to general principles because learned Counsel stated that he desired to argue on general principles. He also put up an argument on particular provisions of law and he referred to Order 22, Rule 8, Civil P.C. This rule provides that on the insolvency of a plaintiff in any suit which the assignee or receiver might maintain, the suit shall not abate unless the assignee or receiver declines to continue it. Under Rule 11, the provisions of the order apply "so far as may be" to appellants. If however we apply Rule 8, either to a plaintiff or to an appellant, it is clear that the rule must apply to the case of a suit or an appeal which has already been filed before the insolvency occurs. In the present case the insolvency occurred before the appeal was filed and indeed before the suit was brought. The rule therefore cannot apply to the present case. Further reference was made to the Presidency Towns Insolvency Act, Section 52(2)(b). This merely provides for the Official Assignee exercise the powers of the insolvent over the property. In the case of mortgaged property the secured creditor has a right to deal with the mortgaged property without making any application to the insolvency Court. The matter therefore of mortgage suits is one which lies apart from insolvency proceedings and although it might be possible for an Official Assignee to apply to the Court to be made a party in a mortgage suit it would be seldom that it would be in the interest of the estate for the Official Assignee to take such action. Therefore on general principles if action is to be taken at all it is the insolvent himself who is the person to take action in regard to mortgage decrees. There is also the fact that in a mortgage decree there may ultimately be a personal liability imposed and that will be a matter with which the Official Assignee would not be concerned, but with which the insolvent would be concerned.

(3.) Learned Counsel desired to refer to certain rulings, but he admitted that none of those rulings deal with a question similar to the present case where the defendant, who was insolvent, desired to make an appeal. For these reasons we dismiss the preliminary objection. Now we come to the merits of the particular appeal. There are three grounds taken in the memorandum of appeal. Of these grounds appellant relies on : (1) that the application was not barred by time, and (2) that the Court below ought to have inquired into the question of mistake as alleged by the applicant and should have come to a definite finding on the point.