BAI KASHI Vs. CHUNILAL HATHISING

JUDGEMENT

(1.) Two preliminary points arise on this appeal: (1) that the suit could not have been instituted without the leave of the Court under Section 28(2) of the Provincial Insolvency Act, and (2) that it could not be brought without notice under Section 80 of the Civil Procedure Code, inasmuch as defendant No. 3, the receiver in insolvency, is alleged to be a public officer within the meaning of that section and Section 2(17) of the Civil Procedure Code, The learned trial Judge sustained both these objections. The plaintiffs now appeal.

(2.) As regards Section 28(2) the learned Judge does not cite in his judgment Section 28(6) which says: "Nothing in this section shall affect the power of any secured creditor to realize or otherwise deal with his security, in the same manner as he would have been entitled to realize or deal with it if this section had not been passed". One possible construction of that section would be that the secured creditor could realize or deal with his security outside the Court in accordance with his powers under the mortgage. But if he wanted to bring a suit, he would nevertheless have to obtain leave under Section 28(2) just as one would if one wanted to take proceedings against a receiver appointed by the Court in an ordinary civil suit.

(3.) But as far as this Court is concerned, the matter has been the subject of express decision by Sir Basil Scott and Mr. Justice Batchelor in Lang v. Heptullabhai Ismailji (1913) I.L.R. 38 Bom. S.c. 15 Bom. L.R. 938. There, disagreeing with the decision of Mr. Justice Davar in the Court below, they held that Sub-section (6) applied to suits as well as other forms of realization of the mortgage security, and that accordingly no notice was necessary before a mortgagee brought a suit to realize his security. There is a reference in the judgment to certain English authorities which show that under similar circumstances a mortgagee may bring a suit in the Chancery Division to enforce his security. But curiously enough I do not see that the precise point of the necessity of obtaining leave is expressly dealt with. However that may be, as the above is a decision of our own Court-and I am not aware of any subsequent decision to the contrary-I would follow it.