MURADAN SARDAR Vs. SECRETARY OF STATE

JUDGEMENT

(1.) This is an appeal against the order of the District Judge of 24-Par-ganas dated 25th August 1936 adjudicating the appellant an insolvent under the provisions of the Provincial Insolvency Act on the petition of the Secretary of State for India in Council, the respondent in the present appeal. The acts of the insolvency alleged to have been committed by the appellant, so far as they are material for the purposes of the present appeal, are (1) that the appellant himself applied to be adjudged an insolvent in the fourth Court of the Subordinate Judge at Alipur on 29 May 1934, and (2) that notice of this petition for insolvency was served on the respondent on 23 July 1934. The application by the respondent for adjudicating the appellant an insolvent was filed on 6 October 1934. It is therefore clear that the first act of insolvency was committed by the appellant beyond three months from the date of the presentation of the petition by the respondent. The learned District Judge did not discuss this question as he was of opinion that this Court decided this matter in favour of the respondent, when the case came up on appeal to this Court at a previous stage. We have gone through the judgment of this Court in that appeal. It is clear from that judgment that this Court did not come to any decision on this matter. This Court simply allowed the respondent to amend his application for adjudicating the appellant an insolvent.

(2.) The learned Senior Government Pleader contended that under the provisions of Section 78, Provincial Insolvency Act, the respondent is entitled to an extension of time for presenting his petition in view of the provisions of Section 9, Sub-section (1)(c), Provincial Insolvency Act, read with the provisions of Section 5, Limitation Act. Section 9, Sub-section (1) provides: A creditor shall not be entitled to present his insolvency petition against a debtor unless (a) the debt owing by the debtor to the creditor, or, if two or more creditors join in the petition, the aggregate amount of debts owing to such creditors, amount to Rs. 5000; (b) the debt is a liquidated sum payable either immediately or at some certain future time, and (c) the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition.

(3.) The contention of the Senior Government Pleader is that the period of three months from the date when the act of insolvency is committed is the period within which the petitioning creditor is entitled to present his application and as Section 5, Limitation Act, applies to such a petition by virtue Section 78, Provincial Insolvency Act, the respondent is within time, as he had no notice of the application for insolvency before 23 July 1934. The point for determination, therefore, is whether this period of three months is a period of limitation to which the provisions of the Limitation Act are attracted or it is a period within which the particular act of insolvency, on which the petitioning creditor wants to found his petition, must be committed in order that it may be avail, ed of as a ground for making an application for adjudication. In other words, the question is whether, after three months have expired from the date when an act of insolvency is committed, that act still continues to be an act of insolvency in order to enable the petitioning creditor to take advantage of it. Clauses (a) and (b) of Section 9, Sub-section (1) evidently lay down the conditions precedent to the filing of an application by the petitioning creditor. Clause (c) therefore must be also taken as laying down the third condition which must be fulfilled before the petitioning creditor can present an application. The marginal note to Section 9 states "conditions on "which creditor may petition." The side-note although it forms no part of the Section is of some assistance, inasmuch as it shows the drift of the Section : Per Collins, Master of Rolls, in Bushell V/s. Hammond (1904) 2 K.B. 563.