RAMCHANDRA GENUJI THOSAR Vs. SHRIPATI SUKAJI GADE

JUDGEMENT

(1.) In this case the plaintiff sued for specific performance of a contract of sale or in the alternative to recover Rs. l,550 as damages. The learned Subordinate Judge, on December 22, 1923, held that the contract sued upon was for a sum of Rs. 7,000, and, therefore, he had no jurisdiction to try the suit, and ordered the plaint to be returned to the plaintiff. The plaintiff presented the plaint in the Court of the First Class Subordinate Judge on January 3, 1924. The First Class Subordinate Judge called upon the plaintiff to pay the deficit Court fees and granted time till January 10, 1924, and on that day the plaint was rejected with costs as the deficit Court-fees were not paid. On January 23, 1924, the plaintiff, through the same , Pleader who had filed the plaint in the First Class Subordinate Judge's Court, filed Miscellaneous Civil Appeal No. 5 of 1924 against the order dated December 22,1923, returning the plaint for presentation to the proper Court. The District Court was not informed of the fact that the plaint was returned to the plaintiff and was, as a matter of fact, filed in the First Class Subordinate Judge's Court, and was rejected for non-payment of the deficit Court-fees. The defendant was also ignorant of the fact that the plaint was rejected by the First Class Subordinate Judge, In the District Court the plaintiff confined his claim to the alternative relief of refund of Rs. 1,550. On July 10, 1924, the learned District Judge held that the alternative relief was within the pecuniary jurisdiction of the Second Subordinate Judge, and remanded the case for decision on the alternative claim. On remand the learned Second Class Subordinate Judge hold that, if the District Judge had been informed that the plaint was rejected by the First Class Subordinate Judge's Court on January 10, 1924, the order of remand would not have been passed, that it was on account of the fraud practised upon the District Court that the order had been obtained from that Court, that the plaint having been rejected by a Court having jurisdiction to entertain it, could not be proceeded with, and that the remedy of the plaintiff was to appeal against the order rejecting the plaint, which amounted to a decree, passed by the First Class Subordinate Judge. On appeal, the learned Assistant Judge held that the order of the Appellate Court not having been appealed against must be considered to be final, and the Subordinate Judge could not go behind the order of the superior Appellate Court, and was bound to proceed with the alternative claim. Against the order of remand an appeal has been filed in this Court.

(2.) A preliminary objection is taken on behalf of the respondent that the appeal filed by the defendant is a nullity as the appellant, who was adjudged an insolvent in October, 1926, was not competent to file an appeal on June 17, 1927, against the order of the Assistant Judge dated January 19, 1927. On October 8, 1928, by an interlocutory judgment of this Court, notice was served on the Official Assignee to ascertain whether he elected to be added as a party to this appeal. It appears from the communication of the Official Assignee that the order of adjudication was annulled on July 3, 1928. It is urged on behalf of the appellant that there is no objection to his proceeding with the appeal as the adjudication order has been annulled. The adjudication order was passed by the Bombay Insolvency Court and a reference is made to Section 18 of the Presidency Towns Insolvency Act under which power is given to stay proceedings against an insolvent by Sub-section (3). The appellant in this case was the defendant in the original suit and was the respondent in the lower Appellate Court. By reason of the adjudication of the defendant as an insolvent, the plaintiff ought to have made an application under Order XXII, Rule 10, of the Civil Procedure Code. See Puninthavelu Mudaliar V/s. Bhashyam Ayyangar 25 M. 406 : 12 M.L.J. 282. No provision has been pointed out to us which would prevent a person who has been adjudged an insolvent from filing an appeal against a decree passed against him. Under Section 17 of the Presidency Towns Insolvency Act, III of 1909, corresponding to Section 28, Clause (2), of the Provincial Insolvency Act, V of 1920, the property of the insolvent vests, in the Official Assignee on the making of the order of adjudication. It was, therefore held in Sayad Daud Sayad Mahomed V/s. Mulna Mahomed Sayad that nothing is left in the insolvent to give him a cause of action and that a suit by an insolvent in his own name after his adjudication is not maintainable. The law with regard to the actions pending by or against an insolvent has been stated in Halsbury's Laws of England Vol. II, pages 135-136.

(3.) Under Order XXII, Rule 8, of the Civil Procedure Code, the insolvency of a plaintiff in any suit which the assignee or Receiver might maintain for the benefit of his creditors, shall not cause the suit to abate, unless such assignee or Receiver declines to continue the suit or (unless for any special reason the Court otnerwise directs) to give security for the costs thereof within such time as the Court may direct; and on the neglect or refusal of the assignee or Receiver to continue the suit or to give such security, the defendant may apply for the dismissal of the suit on the ground of the plaintiff's insolvency, and the Court may make an order dismissing the suit and awarding to the defendant the costs which he has incurred in defending the same to he proved as a debt against the plaintiff's estate. Order XXII, Rule 8, corresponding to a. 370 of the old Code, would apply to the case where there is actual bankruptcy or insolvency and in which an assignee or a Receiver is appointed and would not apply to a case where there has been an application for a declaration of insolvency and a vesting order is made but the proceedings are subsequently annulled and the plaintiff is not declared either a bankrupt or an insolvent: see Amrita Lal Mukerjee V/s. Rakhali Dassi Debi 27 C. 217 : 4 C.W.N. 294. Where, however, the plaintiff's name is struck off and the Official Assignee is substituted for the insolvent plaintiff and the adjudication is thereafter annulled, it was held in Khunni Lal V/s. Rameshar 64 Ind. Cas. 52 : 43 A. 621 : 19 A.L.J. 685 : A.I.R. 1922 All. 361 that there being no limitation provided for the Official Assignee to appear and apply for substitution, or for the debtor to appear and apply for the restoration of his name on the record after the adjudication is annulled, the proceedings cannot, abate and must be deemed to continue. We think, therefore, that the appellant in this case after the annulment of the order of adjudication is entitled to continue the appeal. When an appellant after filing an appeal becomes insolvent, the Receiver may prosecute the appeal under Order XXII, Rule 8, read with Order XXII Rule 11. An insolvent may proceed with an appeal if it involves a personal question as to his status, or if the order appealed from prevents him from earning his living. See G. V/s. M (1885) 10 A.C. 171. It has, however, been held in Kondapalli Tatireddi v. Biduvani Ramachcmdra Rao 62 Ind Cas. 854 :(1921) M.W.N. 535 : 13 L.W. 616 that if during the pendency of a suit a party is adjudicated an insolvent, he is not disqualified by reason of his insolvency from appealing.