MANNASAO KALESAR BANI Vs. RAMBHAROSA JUIAR

JUDGEMENT

(1.) 1. The only question in this appeal is one of limitation. The appellant brought a suit on a bond for Rs. 1000 executed by the respondent on 12th March 1926. That bond was payable in three annual instalments, two of Rs. 300 and the third of Rupees 400. The suit was originally brought for the balance due on the unpaid third instalment of Rs. 400 with interest, but subsequently with the leave of the Court an amendment was made and a claim for the first two instalments with interest was added. That claim was allowed by the trial Court, and a decree for the sum of Rs. 2380 was passed. On appeal however the District Judge held that the claim on the first two instalments was barred by time, and he therefore passed a decree for the third instalment of Rs. 400 only with interest. It is now contended by the appellant that this finding with regard to limitation is incorrect.

(2.) THE facts are admitted and are, for the most part, established by the record. The only question to be determined is whether the debt due on the bond was proved in the insolvency proceedings and therefore limitation would be saved by Section 78(2), Provincial Insolvency Act, or whether the proviso to that section applies. As already stated above, the bond was executed on 12th March 1926. On 7th September 1926 the respondent Rambharosa applied to be adjudicated an insolvent, and on 3rd November 1926 he was adjudicated an insolvent and was ordered to apply for a discharge within six months. It is noted in the order-sheet, a copy of which is on the record as Ex. P-3, that the creditors who were present did not oppose the application, and the present appellant Mannasao is shown as the creditor in the application. On 24th September 1927 the adjudication was annulled, as the insolvent was absent. The insolvent however again made an application that that order should be set aside, and on 29th August 1928 he was again adjudged an insolvent in the absence of the creditor, as would appear from the copy of the order, Ex. P-7. Again however the adjudication was annulled on 18th December 1929, as the insolvent did not apply for an order of discharge during the period specified. The present suit was filed on 17th December 1931, and, if the two periods during which Rambharosa was adjudicated an insolvent are excluded under the provisions of Section 78(2), the claim for the first two insolvents will be in time. If however they cannot be excluded, the claim for those two insolvents will be time-barred. I am of opinion that the view taken by the District Judge is correct and that the debt cannot be held to be proved according to the proviso to Section 78, Provincial Insolvency Act. That proviso is clear in its terms and is as follows: Provided that nothing in this section shall apply to a suit or application in respect of a debt provable but not proved under this Act,

(3.) THE learned Counsel for the appellant has cited Krishna Chandra v. Jotindra Nath 1929 Cal 159 and Ramalinga Ayyar v. Rayalu Ayyar 1930 Mad 356 in support of his contention that the debt was proved under the Act. Both these cases have been considered by the District Judge, and I am of opinion that the view expressed by him is correct. The judgment in the Calcutta case is not very full, and it is not clear from it whether the decree was proved in any way after the adjudication, though it was certainly mentioned by the debtor in his petition for adjudication. It may be noted that execution of the decree was stayed pending the insolvency proceedings. In the Madras case the decree was obtained against the insolvent after his adjudication and the official receiver was a party to the decree: the Judges held that the debt must be held proved within the terms of Section 78, Provincial Insolvency Act. I would agree with the District Judge that there must always be a difference in a case of a decree, which proves itself, especially in the case of a decree that is obtained after an order of adjudication. In the pre sent case however the claim is only on bond, and it is not denied that that bond would have to be proved under the Act. I would again affirm that a mere admission of the debt due on the bond by the debtor in his petition for adjudication would not amount to proof under the Insolvency Act and therefore would not save limitation Under Section 78(2) of the Act.