SARADAMBAL Vs. RAMABHADRA IYER
HIGH COURT OF KERALA
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(1.) This is an appeal from an order passed by the Additional District Judge of Trivandrum, in an insolvency case. The appellant, claiming to be a creditor of the respondent, applied for adjudicating the respondent an insolvent. The petition was dismissed on the ground that the respondent was not a debtor of the appellant. The debt on which the petition was founded was alleged to have arisen in the following manner. The maternal grandfather of the appellant executed a Will Ext. A dated 30.11.1090 whereby he created an interest in favour of the appellant who was a minor on that date, to 3/7th share in a sum of Rs. 7000 deposited with a private firm of Bankers. Two sons of the testator as well as the parents of the respondent were appointed to administer the fund and to pay 3/7th of the same to the appellant when she attained the age of 18 years or gave birth to a child, whichever event happened earlier. The respondents father died in Medom 1120 and the respondent is his only son. It was alleged that the respondents father had failed to pay the amount to the appellant and that a sum exceeding Rs, 25,000 was due to her. The respondent sold a property which originally belonged to his father and this was stated to be the act of insolvency. The respondent denied his fathers liability to pay any amount to the appellant and contended that he could not be deemed to be a debtor of the appellant, and that there was no subsisting debut due to the appellant. The execution of the sale deed was also stated to be a bona fide act. The defence contentions were upheld and the petition was dismissed by the Insolvency Court.
(2.) Bankruptcy is essentially a proceeding in personam and only a personal debt due by the insolvent can from the foundation of a petition for adjudication. Such a debt must have come into existence before the act of insolvency. A debt on which the insolvency petition can be based must be one provable in insolvency or in other words it must be a subsisting debt due from the debtor on the date of the presentation of the petition. It must also be a liquidated sum payable either immediately or at some future time. These propositions were not disputed by the learned counsel for the appellant who contended that the debt in question satisfied these requirements. In our opinion the claim which was put forward as the debt, is not one on which a petition for the adjudication of the respondent can be founded. According to the petitioner, the respondents father Ramasubba Sastri was one of the four persons appointed by her grandfather to administer the fund and to pay the same to her. This sum admittedly became due before the year 1110 and the petitioners husband deposed that demand for payment was being made from the year 1110. The liability of Ramasubba Sastri, if any, was one in the nature of damages for breach of trust. It cannot be said that a debt for a liquidated sum arose on his failure to pay the petitioners share of the fund to her. No action for enforcement of the claim was taken before the presentation of this petition. It cannot therefore be said that Ramasubba Sastri was indebted to the petitioner for a liquidated sum. Even if he was a debtor, it is not clear how his son could become a debtor of the petitioner. A legal representative will become personally liable only in the circumstances provided for in S. 52 of the Code of Civil Procedure. Even if a decree had been obtained against the fathers assets and the son were a party to such a decree, he could not be considered a debtor until an order was passed under S. 52 making him personally liable. Admittedly such a decree or order has not been passed regarding the petitioners claim. Learned counsel for the appellant relied on the decision in M.A.R.R.M.P. Muthu Veerappa Chettiar v. U.K. Sivagurunatha Pillai ( AIR 1926 Mad. 133 ). This decision was not followed by the Madras High Court in later decisions. The following passage from the judgment in Nagasubramonia v. K. Narasimhachariar ( AIR 1927 Mad. 922 ) may with advantage be extracted:-
It has been strenuously urged on us that the son is personally liable for the fathers debt and, therefore, fulfils the definitions of a debt and debtor within the meaning of S. 2(2) and (d), Provincial Insolvency Act and the decision in Muthuveerappa Chettiar v. Sivagurunatha Pillai (AIR 1926 Mad. 133) is pointed to. In that case, one may say that the authorities do not seem to have been discussed and the learned Judges say that each case depends upon its own circumstances and if the petitioner makes the necessary allegations and proves them, then the court would be justified in adjudicating the members of a joint Hindu family insolvents. That no doubt is perfectly true.
(3.) In Abubaker Abdul Kadir v. Kunjan Kunjukrishnan (57 TLR 376) the High Court of Travancore followed the latter decision in preference to the former. It is unnecessary to refer to other decisions of other High Courts as all the courts have followed the principle laid down in AIR 1927 Mad. 922. The decision of this court in Harihara Iyyen Ramayyen v. Official Receiver, Trichur and others 1951 KLT 553 is in consonance with the view held in AIR 1927 Mad. 922. It must therefore be held that even if there was a debt due from Ramasubba Sastri the respondent is not one who has become liable to pay the same. The order of the lower court must therefore be affirmed. The appeal is dismissed with costs.;
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