PERSHAD HUSAIN Vs. GOPI NATH

JUDGEMENT

(1.) THIS appeal arises under the following circumstances. A man of the name of Wilayat Ali was adjudicated an insolvent. A share in certain house property was attached by the receiver as being the property of the insolvent. THIS property was claimed by the appellants, who were the son and nephew of the insolvent. These persons filed an application in the insolvency matter under Section 22 of the Insolvency Act, which provides that "if the insolvent or any creditor or any other person is aggrieved by the act or decision of the receiver, he may apply to the court and the court may confirm, reverse or modify the act or decision complained of," The act apparently complained of in the insolvency matter was the attachment of the property. No doubt the investigation as to whether or not the receiver was justified in attaching the property involved the investigation of the title to the share attached. The appellants in this Court produced their evidence with the result that the Insolvency Court refused to reverse or modify the act of the receiver in attaching the property, in other words, dismissed the application, An appeal was filed from the decision of the Insolvency Court which resulted in the dismissal of the appeal on the merits. Thereupon the plaintiffs instituted the present suit, which seeks a declaration of their title to the same property as was attached in the insolvency matter, The court below has dismissed the plaintiffs suit on the ground that; the decision of the Insolvency Court and the appellate court in the appeal from the insolvency decision operates as res judicata. If we had to consider the matter in the absence of authority, we doubt very much whether, the order of the Insolvency Court and the court of appeal from that order can operate as res judicata. The provisions as to res judicata are contained in Section 11 of the Code of Civil Procedure, which provides that "no court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such Subsequent suit or the suit in which such issue has been subsequently raised and has been heard and finally decided by such court." We may" point out that there was no previous suit between the parties to this suit. There was only the petition of objection to the attachment and the order passed on that petition. No doubt the question which is involved in the present suit, namely, the title to the property, was investigated in the insolvency matter, but there is strong ground for the argument) that the question of res judicata is limited to the provisions of Section 11 of the Code of Civil Procedure. In the case of Gokul Mandar v. Padmanand Singh (1902) I.L.R., 29 Calc., 707, their Lordships of the Privy Council say as follows: "They will further observe that the essence of a Code is to be exhaustive on the matters in respect of which it declares the law, and it is not the province of a Judge to disregard or go outside the letter of the enactment according to its true construction." Where a decree-holder attaches property as being the property of his judgment debtor and a third party objects to the property being attached, the third party can object to the attachment. If the objection is ruled against him he is entitled to bring a suit, provided that he brings it within the time expressly allowed by law, but the right to bring the suit is expressly given by the Code itself. It would certainly seem that in many cases it would be highly objectionable that an Insolvency Court should in a summary manner dispose of property or issues involving the title to the property, If an Insolvency Court has jurisdiction to finally try the right to property, in should as a general rule require the parties to file statements in the nature of pleadings, issues should be duly framed and the case tried in the manner in which an ordinary civil suit is tried. On the other hand, it certainly seems open to grave objection that a claimant to property alleged to belong to an insolvent, (not claiming as a creditor) should be entitled to have an investigation of his alleged title in the Insolvency Court with a right of appeal, and that he should then be again entitled to re-open the entire question in an independent suit. The consideration of this case indicates the necessity for amendment of the Insolvency.Act, We have thought it right to say so much, because an important question of law seems to be involved in the consideration of this case. We find, however, that in the case of Pita Ram v. Jujhar Singh (1907) I.L.R., 39 All., 626, a Bench of this Court decided, under circumstances which in principle cannot be distinguished from the present case, that a decision of the Insolvency Court operates as res judicata. We are bound to follow this decision or refer the present appeal to a larger Bench for re- consideration of the question involved. If we thought that any injustice had been done in the present case, we should not hesitate to adopt this course. We find, however, that there really was a complete trial of the plaintiffs title in the insolvency case. The plaintiffs title to the property was based upon an alleged oral will which the wife of the insolvent is alleged to have made a few days before her death and not very long before the application for the order of insolvency. The court absolutely disbelieved that the alleged oral will was ever made and came to the conclusion upon the materials it had before it that an arbitration award based upon this alleged oral will was a clumsy attempt to defeat the creditors of the insolvent. The title set up by the claimants was highly immprovable and suspicious. Under these circumstances we do not think that this case is a fit one to refer to a larger Bench. We accordingly dismiss the appeal with costs.