Decided on October 06,1950

Hind Screws Appellant
Official Assignee And Ors. Respondents


Khosla, J. - (1.) THIS order will dispose of S.A.O. Nos. 6, 7, 8 and 9 of 1949. The point involved in all these cases is not devoid of interest. The facts are that in October 1947 an appln was made in the insolvency Court at Karachi for an order of adjudication in respect of a firm Shankar Das -Rup Lal. The order of adjudication was passed on 16 -12 -1947 and then the Official Assignee at Karachi made a request to the insolvency Court at Delhi for taking possession of certain property belonging to the insolvent firm. A number of objections were taken and the competence of the Delhi Court to grant such an order was questioned. The Insolvency Court dismissed the appln of the Official Assignee but on appeal the learned Dist Judge held that the Official Assignee had the right to make such an application and the Insolvency Court at Delhi was competent to issue the order prayed for. This order of the learned Dist Judge was passed on 26 -1 -1949 i.e., a year before the Indian Dominion was declared to be a Republic.
(2.) TWO questions now arise, namely, (1) whether even before 26 -1 -1950 (but after 15 -8 -1947) the Courts in Delhi can grant a request of the kind made by the Official Assignee of Karachi under the provisions of Section 77, Proyincial Insolvency Act, and (2) whether despite the order of the learned Dist Judge anything further can be done after 26 -1 -1950 when Pakistan is a foreign country and Court's in India are not British Court's. The second point has greater practical importance than the first which in my view has now become a purely academic matter. The learned Dist Judge relied upon the provisions of Section 122, British Bankruptcy Act, 1914, which is in the following terms: The High Court, the country Court's, the Court's having jurisdiction in bankruptcy in Scotland and Ireland, and every British Court elsewhere having jurisdiction in bankruptcy or insolvency, and the officers of those Court's respectively, shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy.... The learned Dist Judge took the view that the expression "every British Court" included Court's in the Dominion of India even after 15 -8 -1947. It is, however, clear that after 26 -1 -1950. when India became a Republic no Indian Court can be described as a British Ct by any stretch of meaning, and Section 122, Bankruptcy Act has no application whatever to Cts in the Republic of India.
(3.) THE contention of the learned Counsel for the Respondents however, is that the provisions of Section 122, Bankruptcy Act were kept alive by Section 18, Indian Independence Act, 1947 and Article 372 of the Constitution. Section 18, Indian Independence Act provides: In so far as any Act of Parliament, Order in Council, order, rule, regulation or other instrument passed or made before the appointed day operates otherwise than as part of the law of British India or the new Dominions, references therein to India or British India, however worded and whether by name or not, shall, in so far as the context permits and except so far as Parliament may hereafter otherwise provide, be construed as or as including, references to the new Dominions, taken together, or taken separately, according as the circumstances and subject matter may require.... The learned Counsel argues that the expression "every British Ct" in Section 122, Bankruptcy Act of 1914 should be read as "every Ct in British India" and this section therefore contains a veiled or implicit reference to British India, and by virtue of the provisions of Section 18, Indian Independence Act the expression "British India" should be read as "the Dominion of India", and Section 122, Bankruptcy Act can be said to apply to "...every Ct in the Dominion of India.... This in my view is straining the language of the section to too great an extent. The reference is to a British Court and not to British India or India and I cannot hold that by virtue of the provisions of Section 18, Indian Independence Act, Section 122, Bankruptcy Act can be said to apply to the Dominion of India as constituted after 15 -8 -1947 - Even if it were conceded that the Dominion of India being a part of the British Commonwealth was included in the territory referred to in Section 122, Bankruptcy Act and that Cts in the Dominion of India were to be looked upon as British Cts this state of affairs ceased on 26 -1 -1950 when India was declared a Republic. The learned Counsel met this argument by Invoking the aid of Article 372 of the Constitution. This Article, however, does not in my view refers to any law or Act of the type that the Bankruptcy Act of 1914 is. This Article clearly refers, to those laws and statutes which were in ford in the territory of India. It does not in terms continue any laws which had international implications. To interpret Article 372 in this manner would be against the provisions of the entire Constitution. Pakistan became a foreign territory so far as India is concerned after 26 -1 -1950 and it cannot be said that Cts in India are British Cts for the purposes of Bankruptcy law. So far as I am aware there is no international convention or law whereby the arrangement contemplated in Section 122, Bankruptcy Act holds good in two foreign countries. The learned Counsel for the Respondents relied upon the decision in 'Aiyaswami Chetty v. Official Assignee, Madras' : AIR 1934 Mad 344 : (57 Mad. 616) which has also been relied upon by the learned Dist Judge. In this case a debtor was adjudicated an insolvent at Penang which was a part of the British Commonwealth. The learned Judges of the Madras High Court considered the provisions of the Presidency Towns Insolvency Act. The Ct at Madras was clearly a British Ct at that time and the provisions of Section 122, Bankruptcy Act of England were applicable. Now the Cts in India are no longer British Cts and Section 122, Bankruptcy Act cannot be said to apply to any Cts in India. Therefore even if for the sake of argument it is conceded that the order of the learned Dist Judge was according to law this order cannot now be enforced and no Cts in Delhi would be competent to grant the application of the Official Assignee after 26 -1 -1950. It has therefore become impracticable to implement the order of the learned Dist Judge and in view of this practical difficulty obtaining at present it is unnecessary to consider in detail the other issues involved in the cases. I therefore allow these appeals and dismiss the applns of the Official Assignee at Karachi. In the circumstances of the case I leave the parties to bear their own costs in all the appeals.;

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