A SUBRAMANIA AIYAR Vs. SMEENAKSHISUNDARAM CHETTIAR

JUDGEMENT

(1.) This Civil Revision Petition (under Section 75 of the Provincial Insolvency Act) arises out of an application praying that the respondents debts which were admitted by the Official Receiver may be expunged from the schedule. The matter has been dealt with in the courts below on the assumption that the respondents claim could have been enforced in a court of law on the date of the presentation of the insolvency petition but that the remedy by suit had become barred by limitation before the date of the order of adjudication. The case has been argued before us on the same assumption.

(2.) Section 34(2) of Act V of 1920 provides that all debts to which the insolvent is subject when he is adjudged an insolvent (etc.) shall be debts provable under the Act. The Courts below have upheld the respondents contention that in view of the provision in Section 28(7) as to relation back the "criterion date was the date of the filing of the petition"; in support of the conclusion, they have relied on Venkata Hanumantha Rao V/s. Gangayya , where it was held that a petition duly filed by a creditor might under Section 16 be allowed to be continued by another creditor whose claim might (if a suit were necessary) have become barred between the date of the presentation of the insolvency petition and the date of the substitution. The trial court further relied on the use of the expression "the commencement of the insolvency" in the course of the judgment in Sivasubramania V/s. Theethiappa . The latter case is clearly distinguishable; but as regards the former case, it cannot be denied that the reasoning on which the decision has been based affords support to the respondent's contention, though it is perhaps possible to justify the decision on a different ground, viz., that the petition filed by a creditor must be regarded as a kind of representative proceeding and that the other creditors are in a sense parties thereto even from the outset.

(3.) There are two decisions directly in point, one of the Lahore High Court, under the Provincial Insolvency Act Nizam V/s. Babu Ram (1933) I.L.R. 14 Lah. 730 and the other of the Bombay High Court, under the Presidency Towns Insolvency Act Byramji Bomanji V/s. Official Assignee, Bombay A.I.R. 1930 Bom. 130; and they support the conclusion arrived at by the Courts below. In Sankaranarayana Aiyar V/s. Alagiri Aiyar and Rangiah V/s. Appaji Rao , there are observations to the effect that on the ground of principle, if not also as a matter of construction, the relation-back doctrine must be held to govern the interpretation of the expression order of adjudication occurring in some of the later sections of the Act. In Atchuta Ramayya Garu V/s. Official Receiver, East Godavari , both the learned Judges expressed the opinion that the restriction imposed by Clause (2) of Section 28 on the institution of suits by creditors must in view of Section 28(7) be held to relate back to the date of the presentation of the petition; and if this were the correct view, it would only be logical to hold that even for purposes of Section 34(2), the same is the material date cf. Harrison V/s. Kirk (1904) A.C. 1 at 5.