T K VASUDEVA KAMATH Vs. NATTOJI LAKSHMINARAYANA ROW

JUDGEMENT

(1.) THE question in this appeal is whether, after the making of an order of adjudication under Section 16 of the Provincial Insolvency Act, 1907, a creditor of the insolvent is prevented by the provisions of Sub-section (2)(b) of that section from suing under Section 43 of the Transfer of Property Act to set aside a transfer made by the insolvent without first obtaining the leave of the Court. THEre appears to be a curious absence of authority as to the effect of the corresponding provision in the English Bankruptcy Acts with respect to actions by creditors under the Statute of Elizabeth which corresponds with Section 53 of the Transfer of Property Act. THE nature of the suit under the English and Indian Acts has recently been discussed in this Court in Palaniandi Chetti v. Appava Chettiar (1916) 80 M.L.J. 565 Subramania Ayyar v. Muthiah Chettiar (1917) I.L.R. 41 Mad. 612 : 33 M.L.J. 705 and Pokker v. Kunhama (1918) I.L.R. 42 M. 149 : 36 M.L.J. 231 : 9 L.W. 138. It appears that in England, while such a suit should ordinarily be on behalf of all the creditors and the decree should declare the transfer void against all of them, a judgment creditor may sue in respect of his own debt alone and obtain satisfaction for it. THE sub-section of this Act provides that " except as provided by the Act no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pending of the insolvency proceedings have any remedy against the person or property of the insolvent in respect of the debt or commence any suit or other legal proceedings except with the leave of the Court and on such terms as the Court may impose." A suit by a. judgment-creditor such as I have mentioned without the leave of the Court would, I think, be in contravention of this section, and would enable, the judgment creditor to obtain satisfaction of his decree out of the property declared in the suit to be the property of the insolvent. Even as regards a suit by a creditor who was not a judgment-debtor to declare a transfer void against creditors generally, I think the words of the sub-section "or commence any suit or other legal proceedings" are sufficiently wide to cover a suit to make property available as the property of the judgment-debtor and to forbid the institution of such a suit as this without the leave of the Court. THE policy of the law, as disclosed in the section is to place the administration of the estate including the realization of assets under the control of the Court, and it would be opposed to this policy to allow a creditor to proceed with a suit of this kind except with the leave of the Court and on such terms as it might impose. We agree with the Subordinate Judge and dismiss the appeal with costs.