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Madras High Court
C. Venugopalachariar vs K. Chinnulal Sowcar And Ors. on 10 February, 1926
Equivalent citations: 97 Ind Cas 706, (1926) 51 MLJ 209
Author: Phillips


Phillips, J.

1. The question for decision in this case is whether, when an order of annulment has been passed under Section 43(1) of the Provincial Insolvency Act, it is open to the Isolvency Court to set aside its order by virtue of the provisions of Order 9 of the Code of Civil Procedure. The wording of the section is “If the debtor does not appear on the day fixed for hearing his application for discharge the order of adjudication shall be annulled….” This certainly seems to be a mandatory provision, but it is contended for the appellant that the word “shall” does not necessarily make the order mandatory and that it may be treated as merely directory. A similar question was considered in C.R.P. No. 554 of 1925, a case in which the debtor had not applied for discharge at all and on that ground his insolvency was annulled and it was there held that the Court had power to review its order of annulment. It only differs slightly from the present case and cannot really be distinguished on principle. On the other hand, in a case in Arunagiri Mudaliar v. Kandaswami Mudaliar (1943) 19 L W 418 Waller, J. was of opinion that Section 43 was absolutely peremptory in its terms and that therefore time could not be granted for applying for discharge. Krishnan, J. did not take this view, but he apparently held that if an order for annulment had been made the provisions of Section 10(2) should be applied. I am inclined to agree that Section 10, Clause 2 governs this case. under Section 5 of the Act the provisions of the Civil Procedure Code are to be applied subject to the provisions of the Act. Section 10(2) provides a definite remedy for a debtor in respect of whom an order of adjudication has been annulled, and it gives him permission to present another petition on the same facts, provided that he satisfies the Court that he was prevented from prosecuting his application by any reasonable cause. Such a remedy is certainly distinct from any remedy granted by the Civil Procedure Code and appears to prescribe definitely the procedure to be adopted. If that is so, then I think that the words “subject to the provisions of this Act” in Section 5 must have their full force; when the Act prescribes a definite method by which the debtor can obtain his remedy it is not open to him to adopt other methods which would be open under the Civil Procedure Code. No provision similar to Section 43 was contained in the old Provincial Insolvency Act and it is obviously one of the provisions of the new Act that the debtor shall be obliged to apply for discharge if he wishes to retain the benefits of insolvency so as to put an end to the proceedings in insolvency. Provisions have been enacted in Section 43(1) that if he does not apply for discharge his adjudication shall be annulled, but it allows him in certain cases a further remedy of presenting another petition in insolvency which is the method of giving relief to persons who have been prevented by bona fide causes from prosecuting their applications. In this view, with all respect, I am not prepared to accept the views expressed in C.R.P. No.554 of 1925 but would rather adopt the opinion expressed in Arunagiri Mudaliar v. Kandaswami Mudaliar (1943) 19 L W 418. Although the insolvent has a remedy prescribed by the Act, he has chosen to apply under Order 9. His petition was rightly dismissed.

2. The appeal is accordingly dismissed.

Madhavan Nair, J.

3. I entirely agree. The question is whether by virtue of the provisions contained in Section 5 of the Provincial Insolvency Act the appellant is entitled to ask the Court to consider his application to restore and re-hear the petition for discharge dismissed on account of his default under Section 43. In my opinion, Section 43 is clearly mandatory; Section 5 states that subject to the provisions of the Insolvency Act the Insolvency Court in regard to proceedings under the Act shall have the same powers and shall follow the same procedure as it has and follows in the exercise of original civil jurisdiction. But the Provincial Insolvency Act itself has provided in Section 10(2) a special procedure by means of which the appellant can have his remedy. According to that section, after obtaining leave of the Court he can file an application for adjudicating him an insolvent. The intention of the legislature therefore seerns to be that in this class of cases arising under Section 43, the special procedure referred to in Section 10(2) should be followed and not the provisions of the Civil Procedure Code. It is therefore clear that the appellant cannot rely on the provisions of the Civil Procedure Code by virtue of Section 5 of the Insolvency Act.

4. As regards the authorities, it was decided in C.R.P. No. 554 of 1925 that it is open to apply for review in a case where the debtor failed to apply for discharge under Section 43 within the specified time; but the learned Judges do not make any reference to the provisions of Section 10(2) of the Insolvency Act. Krishnan, J.’s view in Arunagiri Mudaliar v. Kandaswami Mudallar (1943) 19 L W 418 as regards Section 10(2) supports our conclusion, though his decision sitting as a single Judge in C.R.P. No. 554 of 1925 is in favour of the appellant’s contention. No reference is made in that judgment to Section 10(2) of the Provincial Insolvency Act.

5. I agree with my learned brother that it is not open to the appellant to rely on the provisions of the Civil Procedure Code in this case. I would also dismiss the appeal.

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