BAHORI LAL Vs. SRI RAM

JUDGEMENT

(1.) These are two connected appeals, one by Bahori Lal plaintiff and the other by Chhidda plaintiff arising out of two suits filed by them for damages. Both the suits were partly decreed by the Court of first instance but on appeal the learned Civil Judge has dismissed both of them with costs. The two suits were consolidated in the Court of the learned Munsif and they were disposed of by a common judgment dated 29 February 1940. Similarly, the appeals arising out of the two suits were disposed of by the learned Civil Judge by a common judgment dated 31 July 1941. It will, therefore, be convenient to dispose of both these appeals to this Court by one common judgment.

(2.) The relevant facts necessary for purpose of these appeals are briefly these: Sri Ram and Joti Prasad, defendant-respondents, presented an application to the Court of the Insolvency Judge at Agra on 22 November, 1937 against Bahori Lal and Chhidda, plaintiff-appellants and one Sundar Lal It was alleged that these three persons were indebted to them inasmuch as a decree of the Court of small causes at Agra for Rs. 656-6-6 in favour of the applicants was outstanding and that Chhidda plaintiff-appellant was further indebted to Joti Prasad on the basis of a promissory note for Rs. 150, that these three persons were concealing and disposing of their property and they had also given notice to these creditors that they had suspended payment of their debts and that Bahori Lal had already disposed of his house with a view to defraud the creditors. On these allegations it was prayed that Bahori Lal and Chhidda appellants be declared as insolvents and an Official Receiver be appointed to seize their property. The learned Insolvency Judge adjudged these persons as insolvents and their property was seized by the Official Receiver. On appeal to the learned Civil Judge by Chhidda and Bahori Lal, the order of the learned Insolvency Judge was set aside and their property was released and they were also allowed costs of both the Courts. Thereafter Bahori Lal and Chhidda instituted suits Nos. 454 and 460 of 1939 respectively against Sri Bam and Joti Prasad for recovery of damages on the ground that the insolvency proceedings had been taken by the two defendant-respondents maliciously and without reasonable and probable cause. Each of these suits was for the recovery of Rs. 500 as damages and it was alleged in these suits inter alia that the plaintiffs had suffered much physical and mental pain and had been disgraced and lowered in the estimation of their friends and caste fellows. The defendant-respondents contested both the suits on these grounds: (1) That the insolvency proceedings were not started maliciously and without reasonable and probable cause; (2) That the present suits for damages for such proceedings were not maintainable; (3) That the amount of damages claimed was excessive; (4) That the suits were barred by limitation and also by the provisions of Section 26, Provincial Insolvency Act.

(3.) The Court of first instance found that the insolvency proceedings taken by the defendant-respondents were malicious and without reasonable and probable cause, that a suit for damages in these circumstances was maintainable. It further found that the suits were within time and they were not barred by the provisions of Section 26, Provincial Insolvency Act. Regarding the amount of damages, however, the learned Munsif found that Chhidda appellant suffered a loss of Rs. 10 on account of his absence from his business while attending the Court in connexion with the insolvency proceedings. He further held that each of the two plaintiff-appellants suffered a loss of reputation in society and he estimated that Rs. 50 was a fair and reasonable compensation for each of them on this account. In the result the suit of Chhidda appellant was decreed with proportionate costs for Rs. 60 and the other suit of Bahori Lal appellant was decreed for Rs. 50 with proportionate costs against the two defendants. The rest of their claims was dismissed.