VELJI SHIVJI Vs. MATHURADAS HARIDAS

JUDGEMENT

(1.) This is an appeal from a judgment of Mr. Justice Blagden, and the facts really are not in dispute. The plaintiff filed this suit on November 9, 1939, and the suit was referred to the Commissioner for taking accounts on February 7, 1940. While the reference was pending, the plaintiff was adjudicated insolvent on January 16, 1945. On August 7, 1945, Mr. Justice Bladgen made an order purporting to be an order under Order XXII, Rule 8, Sub-clause (1), of the Civil Procedure Code, 1908, directing that the Official Assignee should furnish security in Court on or before September 7, 1945, in the sum of Rs. 10,000 for the costs of defendants Nos. 1 and 2 and further ordering that in the event of the Official Assignee not furnishing the said security by the time aforesaid he be deemed to have refused or to have declined to continue the above suit, and that in default of the Official Assignee depositing in Court the said security within the time aforesaid the suit should be placed on the daily Board for dismissal on that date. It should be pointed out that Mr. Justice Blagden made this order without hearing the Official Assignee. It is true that the plaintiff was present and that the learned Judge heard him, but neither the Official Assignee nor anyone on his behalf appeared at that hearing. Intimation was given to the Official Assignee of this order, and on, August 29, 1945, the Official Assignee informed the Prothonotary that he was unable to lodge in Court security in the sum of Rs. 10,000 during the period, mentioned therein as he had not got sufficient assets in his hands for that purpose. He further pointed out that the insolvent, however, had lodged in his office a proposal of scheme of composition and had also deposited in his office a sum of Rs. 6,800 for payments to his creditors. The suit then came before me sitting on the Original Side on October 12, 1945, and the defendants applied for a dismissal of the suit in view of the terms of the order of Mr. Justice Blagden. At the instance of the plaintiff, who applied for an adjournment, I ordered the suit to be adjourned to December 12, 1945, The suit then came before Mr. Justice Kania on February 12, 1946, and it was again adjourned to the 21 of that month. It came on again before that learned judge on that date and he adjourned it to April 4, 1948. It came on before Mr. Justice Coyajee on April 9, 1946, and he again adjourned it to June 17, 1946. In the meanwhile, on April 16, 1946, Mr. Justice Bhagwati annulled the order of adjudication passed against the plaintiff. On July 12, 1948, the suit came up before Mr. Justice Tendolkar, The defendants pressed for a dismissal of the suit and the plaintiff urged that he wanted to go on with the suit as his insolvency had been annulled and he wanted to prosecute this litigation. Mr. Justice Tendolkar felt some difficulty in view of the order made by Mr. Justice Blagden and directed that the matter should be put before that learned Judge, and that matter came on before Mr. Justice Blagden on August 7, 1946, and the order made by that learned Judge was to vacate the order which he had made on August 7, 1945. It is from this order of Mr. Justice Blagden that the defendants have come in appeal before us.

(2.) The scheme of Order XXII, Rule 8, although by no means expressed in very happy or lucid terms, is fairly clear. Under Order XXII, Rule 8, Sub-clause (1), the insolvency of a plaintiff in any suit which the assignee or receiver might maintain for the benefit of his creditors causes the suit to abate if the assignee or receiver declines to continue the suit or to give security for the costs thereof within such time as the Court may direct; Sub-clause (2) enables the defendant in such a case to apply for the dismissal of the suit and to ask for costs. Order XXII, Rule 9, enables the Official Assignee to apply for an order to set aside the abatement or dismissal. Now, in our opinion, it seems to be clear that what Order XXII, Rule 8, Sub-clause (1), contemplates is that there should be a bar against the Official Assignee from proceeding with the suit if he does not comply with the order passed against him with regard to the giving of security for costs or if for any other reason he declines to continue the suit. But it is important to note that unless the suit is in fact dismissed under Order XXII, Rule 8, Sub- clause (2), the suit is not dead but continues to remain on the file of the Court. It may be in a state of suspended animation, but there is still animation in that litigation. Therefore the proper construction to give to Order XXII, Rule 8, Sub-clause (1), is that the abatement which follows upon the default on the part of the Official Assignee is an abatement which affects only the Official Assignee so long as he is the dominus litis of the litigation. To use the language of the Privy Council used in the case of Debi Bakhsh Singh V/s. Habib Shah (1913) I.L.R. 35 All. 331, 336 P.C., the principle of forfeiture of rights in consequence of a default in procedure by a party to a cause is a principle of punishment in respect of such default. In this case the forfeiture of rights which the Official Assignee suffers by reason of his default in procedure is a punishment against him for that default. But it would be unfair to extend that principle of punishment against the plaintiff who was not called upon to comply with any order of the Court nor was he in a position pending his insolvency to proceed with the litigation. Therefore, in our opinion, when the insolvency comes to an end and the order of adjudication is annulled, the bar that subsisted comes to an end, because, as we have pointed out, the bar was only against the Official Assignee and not against the plaintiff. On the order of adjudication being annulled, the plaintiff is restored to his full rights, and if he wants to proceed with the litigation, there is no impediment, as far as he is concerned, under the Code which should prevent him from proceeding with the litigation. Mr. Banaji has argued that under Order XXII, Rule 8, it is the suit that abates and not the suit quae the Official Assignee. In our opinion that is not the correct interpretation of that rule, because, if one looks at the other rules in that Order, one finds that the Civil Procedure Code does contemplate a suit abating quae a party and the Code has used language in terms appropriate to that position, For instance, in Order XXII, Rule 3, Sub-clause (2), it provides that the suit shall abate so far as the deceased plaintiff is concerned; again in Rule 4, Sub-clause (3), there is a provision that the suit shall abate as against the deceased defendant. Mr. Banaji has also argued that the construction he is contending for would not result in any hardship because it would be open to the plaintiff, after his insolvency was annulled, to apply for setting aside the abatement under Order XXII, Rule 9, Sub-clause (2). In our opinion he would not be competent to do so because, looking to the scheme of Order. XXII, Rule 9, Sub-clause. (2), it is only the Official Assignee who can apply to set aside the abatement if the abatement order has been made against him. Therefore, in bur opinion, notwithstanding the order made by Mr. Justice Blagden, on the order of adjudication being annulled the plaintiff was perfectly competent to proceed with the suit and resist the application for dismissal.

(3.) We should like to point out as a matter of procedure and in order to guide Judges sitting on the Original Side that, when an order is made under Order XXII, Rule 8, Sub-clause (1), it is very desirable-indeed it is very necessary-that such an order should not be made without hearing the Official Assignee. If the attention of the learned Judge is drawn to the fact that the plaintiff had become insolvent, before any order is made, notice should be given to the Official Assignee, and after hearing the Official Assignee, or if after notice is given to the Official Assignee he does not choose to be present, then the proper order should be made under Order XXII, Rule 8, Sub-clause (1). It is not necessary to decide, but if it was, we should have held that the order made by Mr. Justice Blagden is not a proper order which he should have made under Order XXII, Rule 8, Sub-clause (1). In the first place, as we have already pointed out, it was made in the absence of the Official Assignee; and in the second place, Mr. Justice Blagden has directed that the suit should be placed on the daily Board for dismissal. That is undoubtedly going beyond the ambit of Order XXII, Rule 8, Sub-clause (1), because it is by operation of law that the abatement takes place under Order XXII, Rule 8, Sub-clause (1). If the Official Assignee declines to continue the suit or if he fails to give security for costs, without any order from the Court there is an abatement of the suit; but the Court cannot direct that the suit should be placed on the daily Board for dismissal, because it is only on an application by the defendant under Rule 8, Sub-clause (2), that the Court may dismiss the suit and award him costs; but it is left to the option of the defendant whether he should or should not apply for a dismissal of the suit. There may be an abatement of the suit without a dismissal of the suit. It is hardly necessary to point out the very great difference between a mere abatement of the suit and a dismissal of the suit. If the order made by Mr. Justice Blagden was in any view of the case not a proper order under Order XXII, Rule 8, Sub-clause (1), then there could be no abatement of the suit at all. Mr. Justice Blagden has vacated his own order which he made on August 7, 1945, Now a Judge has undoubted power to amend his own order to the extent that there is a clerical mistake and it fall under Section 152 of the Code or what is known in English practice as a "slip order." In our opinion, even if power exists as contended for by Mr. M.V. Desai under Section 151 for a learned Judge to discharge or vacate his own order which he has made in Court and which has been duly drawn up, we wish to state that such a power, if it does exist, should be very rarely and very sparingly exercised. But it is not necessary to decide this, and we do not do so.