PALANI GOUNDAN Vs. OFFICIAL RECEIVER OF COIMBATORE

JUDGEMENT

(1.) The question referred to us is "Whether a Court has jurisdiction to extend the time originally fixed under Section 27 of the Provincial Insolvency Act, for an application by the debtor for discharge, after the expiry of that time, but before an order of annulment is passed under Section 43, either under Section 5 of the Insolvency Act taken with Section 148, Civil Procedure Code, or under Section 27 (2) of the Act itself, or otherwise." This reference is made necessary because of the view taken by Courts other than the Madras High Court in opposition to the balance of opinion in the Madras High Court.

(2.) The facts are that the insolvency petition was presented on the 5 January, 1923 and on this petition there was an order of adjudication on the 31 January, 1924 and one year's time was granted to the insolvent to apply for his discharge. This time was further extended and the finally extended period expired on the 30 June, 1927. No further applications, for extension of time were made and nothing was done in the insolvency until in 1928 an alienee applied for the annulment of the adjudication. Notice was ordered to the insolvent to show cause against the annulment of the adjudication and then a creditor filed an application to extend the time for the application, for discharge.

(3.) We have now to consider whether the Court has any jurisdiction to extend the time for an application for discharge having regard to the fact that the time specified by the Court expired on the 30 June, 1927 and the application for an extension of time was only made in 1928. The first section to be considered is Section 43 (1) of the Provincial Insolvency Act which reads, "If the debtor does not appear on the day fixed for hearing his application for discharge or on such subsequent day as the Court may direct, or if the debtor does, not apply for an order of discharge within the period specified by the Court, the order of adjudication shall be annulled, and the provisions of Section 37 shall apply accordingly." Waller, J., in Arunagiri Mudaliar V/s. Kandaswami Mudaliar (1923) 19 L.W. 418, held that the Judge has no option under Section 43 but to annul the adjudication and that he has no power under Section 27 to extend the period after it has expired. His reason for so holding is that Section 43 is in his view absolutely peremptory in its terms and that the only course open to a Court, on default of the insolvent to apply for his discharge, is to annul the adjudication and that being so no application for extension of the period can lie after it has expired. In the same case Krishnan, J., took the contrary view. In Chinnappa Reddy V/s. Thomasu Reddy (1927) I.L.R. 51 M. 839 : 54 M.L.J. 344 Kumaraswarni. Sastri and Wallace, JJ., agreed with Waller, J.'s view in a judgment which reviewed most of the decided cases upon this point and they held that the word "shall" in its ordinary signification is mandatory and saw no reason why that word in Section 43 should not receive its ordinary interpretation. Phillips and Madhavan Nair, JJ., followed Waller, J.'s opinion in Arunagiri Mudaliar V/s. Kandaswami Mudaliar (1923) 19 L.W. 418 in Venugopalachariar V/s. Chinnulal Sowcar . Vonkatasubba Rao and Reilly, JJ., considered this question in Jothaji Peraji Firm V/s. Krishnayya (1929) I.L.R. 52 M. 648 : 57 M.L.J. 116. Venkatasubba Rao, J., in the first place, observes that the adjudication does not get automatically annulled under Section 43 (1) on the expiry of the original period. Next he holds that Section 27 (2) of the Provincial Insolvency Act, whilst saying that the Court may extend the time, does not say in express terms that it may be extended either before or after the expiration of the period originally fixed, and in his view Section 148, Civil Procedure Code, clearly allows the Court to enlarge the time irrespective of the fact that the application is made either before or after the expiry of the period originally specified and for this Badri Narain v. Sheo Koer (1889) L.R. 17 I.A. 1 : I.L.R. 17 C 512 (P.C.) is direct authority. He holds, therefore, that it is open to the Insolvency Court under Section 27 (2) of the Provincial Insolvency Act to extend the time on a proper application to that effect made at any time before the adjudication is annulled under Section 43 (1). Reilly, J., is inclined to the view that the words "shall be annulled"" in Section 43 of the Act are mandatory. In the view of the majority of the Judges of this High Court who have considered this question, the answer to the question referred to us would be in the negative.