SWAMY KOTAYYA Vs. THUNUGUNTLA VENKATA RANGARAO

JUDGEMENT

(1.) This petition raises the question whether when a debtor has been adjudicated an insolvent under the Provincial Insolvency Act, his creditor can, without the leave of the Insolvency Court file an execution application against him with a prayer for his arrest. Our decision depends upon the interpretation of Section 23(2) of the Provincial Insolvency Act which runs as follows: On the making of an order of adjudication the whole of the property of the insolvent shall vest in the Court or in a Receiver as herein after provided, and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceedings, except with the leave of the Court on such terms as the Court may impose.

(2.) At first sight the interpretation is simplicity itself for an execution petition is obviously a legal proceedings and it is admittedly in this case in respect of a debt provable in the insolvency. Nor do any difficulties arise from the decisions of our own High Court. In Easwara Aiyar V/s. Govindarajulu Naidu 31 Ind. Cas. 192 : 39 M. 689, it was held that the words or other legal proceeding occurring in precisely the same centext in Section 17 of the Presidency Towns Insolvency Act include applications in execution with a prayer for arrest. In Alamelu Ammal v. Venkatarama Iyer 105 Ind. Cas. 165 : 50 M. 977 : A.I.R. 1927 Mad. 919 : (1927) M.W.N. 593 : 26 L.W. 305 : 53 M.L.J. 422 : 39 M.L.T. 479, this interpretion of Section 28, of the Provincial Insolvency Act seems to have been accepted as so self-evidence that no alternative case was put forward.

(3.) Outside Madras, however, there is no unanimity of opinion. Though the High Courts of Lahore and Patna agree with the Madras view, those of Bombay and Allahabad do not. See Mohammad Roshan Sheikh Ali V/s. Ghulam Mohiddin 118 Ind. Cas. 791 : A.I.R. 1929 Bom. 135 : 31 Bom. L.R. 206 : Ind. Rul. (1929) Bom. 487, Maharaj Hari Ram V/s. Sri Krishna Ram . The contrary view is based upon two reasons. (i) If Section 28, gives automatic protection against an Execution Petition for arrest Section 31, is superfluous; (ii) In the old Provincial Insolvency Act of 1907 the section corresponding to Section 28 ran "shall have any remedy against the property or person of the insolvent." It was those words which prevented the filing of an Execution Petition for arrest. The words or other legal proceeding could not, therefore, in 1907 refer to any such Execution Petition nor can they so refer now when the words or person have been deleted from the section in the 1920 Act.