Decided on November 23,1954



- (1.) This is an appeal against the Order of remand passed by the Additional Subordinate Judge of Tenali. An objection was raised in the Lower Appellate Court that a leave of the Insolvency Court was not obtained under S. (2) of the Provincial Insolvency Act, the suit was not maintainable. The Appellate Judge permitted the objection to be taken even though it was not raised in the trial court and remanded the case, to give an opportunity to the plaintiff -appellant herein to meet that objection.
(2.) The main argument addressed by Sri B. Punyakoti Chetty, the learned Advocate for the appellant is that, as objection was not taken in the trial court, the objection must be deemed to have been waived, as held by Bardswell J. in -- Satyamma v. Official Receiver, Masulipatam, AIR 1933 Mad 917 (A). Section 28 (2), Provincial insolvency Act is in the following terms : "On the making of an Order of adjudication the whole of the property of the insolvent shall vest in the court or in a Receiver as hereinafter provided and shall become divisible among the creditors, and thereafter except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the Insolvency Proceedings have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceeding, except with the leave of the Court and on such terms as the Court may impose."It is clear from the terms thereof that as on the making of an order of adjudication, the estate vests in the Receiver, no suit shall be commenced except with the leave of the Court. The terms of the section are mandatory, and in my opinion, there can be no question of any waiver of objection as to the maintainability of the suit on part of the parties so as to nullify the effect of the section. Bardswell J., who took a different view, however, states at p. 919 thus : "No definite authority has been shown as to whether there could be a waiver in such a case........"No decision has been cited before me in support of that proposition, excepting the decision of Bardswell J. and I do not agree with that decision, as in my view, the language of S. 28 (2) is quite clear and that there can be no waiver of the mandatory requirements of that section.
(3.) The learned Advocate for the appellant next drew my attention to the decision in -- Subramanyam v. Narasimham, AIR 1929 Mad 323 (B) in support of the proposition that the absence of leave under S. 16, Provincial Insolvency Act (Act 3 of 1907) corresponding to S. 28 of the present Act does not render the decree passed a nullity. But in -- Dawood Mohideen Rowther v. Sahabdeen Sahib, AIR 1937 Mad 667 (C) a Bench of the Madras High Court dissented from the decision in Subramanyam v. Narasimham (B) and held that on a proper contruction of Ss. 28 and 29, Provincial Insolvency Act, the suit is not maintainable unless leave of the Insolvency Court is obtained prior to is institution.;

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