HIGH COURT OF MADHYA PRADESH
Click here to view full judgement.
Dixit, J. -
(1.) THIS is an appeal under Section 76, Gwalior Insolvency Act Samvat 1980 against an order of the District Judge, Guna refusing the Appellant -debtor extension of time for applying for his discharge. The order of the adjudication was made on 26 -4 -1954 and it specified that the debtor shall apply within two months for his discharge. The debtor failed to do so. He applied for his discharge on 22 -7 -1954 and stated that he could not make an application for his discharge within the time fixed as he was ill.
The learned District Judge rejected the application on the ground that under Section 26, Gwalior Insolvency Act, it was obligatory on the debtor to apply for his discharge within two months of the date of the order of adjudication and that as he had not prayed for an extension of time within the time fixed for the application for discharge, no extension of time could be granted.
(2.) HAVING heard Mr. Hargovind Misra, learned Counsel for the Appellant, I have reached conclusion that this appeal must be accepted. Under Section 26(2) the Court is empowered to extend the time within which the debtor has to apply for his discharge, if sufficient cause is shown. Here the Appellant did state that on account of illness he could not apply for his discharge within the time fixed for it.
The view of the learned District Judge that the time cannot be extended on an application made after the expiry of the period originally fixed for applying for discharge is not correct. Section 148, Code of Civil Procedure would apply to insolvency proceeding's and the time may be extended on an application made after the expiry of the period fixed, provided it is made before the order of adjudication is annulled under Section 42(1). This proposition is now firmly established by the several authorities. See 'A.J.E. Abraham v. H.B. Sookias'. 51 Cal 337 : : AIR 1924 Cal 777 (A); 'Saligram v. Official Receiver', AIR 1926 Sind 94 (B); 'K.K.S.A.R.A. Chettiar v. Maung Myat Tha', AIR 1927 Rang 136 (C); 'Gopal Ram v. Magni Ram', 7 Pat 375 : : AIR 1928 Pat 338 (D) and 'Bishamchand v. Kishanlal Sheosingh', ILR (1939) Nag 478 :, AIR 1939 Nag 103 (E).
It must be noted that Section 42(1), Gwalior Insolvency Act only says that 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. The annulment under this section is thus not automatic on the failure of the debtor to apply; it requires an order of the Court. So long as the order is not passed by the Court annulling the order of adjudication (sic) application to extend the time under Section 20(2) riate(sic) competent. Here the Court never passed of (sic) the order of annulment.
(3.) IN the result this appeal is allowed, discharged order dated 26 -7 -1954 is set aside and the lea (sic) in this (sic) District Judge is directed to dispose of the petion (sic) for discharge according to law. There will (sic) order as to costs.
Copyright © Regent Computronics Pvt.Ltd.