SIVASUBRAMANIA PILLAI Vs. THEETHIAPPA PILLAI (DEAD)

JUDGEMENT

(1.) This insolvency originated in the arrest by 1 respondent of the insolvent, here appellant. On the latter's adjudication however, only two creditors, now represented by other respondents, proved debts, the appellant refraining from proving his, until after a dividend of less than half an anna had been distributed and about nine years had elapsed. Evidently what has led him now to tender proof of his debt under Section 24(3) of the Provincial Insolvency Act III of 1907 is that on the 20 September, 1918, the lower Court granted the insolvent what is described as a conditional discharge, the condition being that he should, subject to his right to an allowance of Rs. 25 per month for maintenance of himself and his family, place at the disposal of the Court all property he might afterwards acquire. This discharge was granted on the application of the insolvent based on the expectation that in case of his discharge his mother would relinquish a life estate, to which he was entitled in reversion, in his favour; and the appellant evidently thought it worth while to prove in order to obtain a share in these new assets. The lower Court held that he was entitled to do so notwithstanding the two points urged before it and here, that his claim was made after the order of discharge of 20th September, 1918 and that recovery of his debt would in proceedings other than insolvency be barred by limitation.

(2.) A preliminary objection has been taken to this appeal by the insolvent on the ground that he is not a "person aggrieved" within the meaning of Section 46(2) of the Act, because he has no interest in the distribution of assets, which have vested in the Official Receiver for his creditors, whoever they may be. But that is unsustainable. For under Section 41 he will eventually be entitled to any surplus remaining after the creditors, who have proved, have been satisfied and will be deprived of such surplus if the proof of another creditor, whose claim may diminish or exhaust it, is wrongly admitted. Another formal objection to the proceedings is, that the Official Receiver has not, so far as appears been a party to them at any stage. But, as all the creditors concerned have had notice of them, we simply note this irregularity and proceed.

(3.) First, as regards the order of 20 September, 1918, it is, we may observe, defective, because it contains no definite provision for or directions to the Official Receiver regarding the manner in which it is to be given effect; and it should probably have been framed with reference to Section 44(5) explicitly as imposing a condition and also suspending the discharge, until that condition had been fulfilled by the execution of the anticipated release in favour of the Official Receiver or otherwise for the benefit of the creditors. But its terms have already been stated and its meaning is clear. First, a point referred to by the lower Court, although in doubtful language, this order is consistent with the future declaration of a final dividend, since it contemplates the realization of further assets for distribution in one; and, it may be added, it is clear from the text of the order, by which the insignificant dividend already distributed was declared, that it was not final. Next, the order of 20-9-1918 was not one of absolute discharge. For it was in terms conditional, and expressly contemplated the continuance of the insolvent's disability to acquire property except for the benefit of his creditors and subject only to the reservation of a monthly income for himself and his family. Those terms are, as already stated, anomalous and it is doubtful what exact change in the insolvent's position they were intended to effect and whether they were intended to do or did more than release him from liability for his scheduled debts, those debts being made payable only from the property, which he was expected to acquire. Certainly, however, and this is the material point, there is nothing to indicate an intention on the part of the Court or other parties to the order to release such property from proveable debts or to make any charge in respect of them except as regarded the liability of the insolvent himself. It is then impossible to accept the first argument for the insolvent (appellant), that this order constituted such a discharge, as is referred to in Section 24(3) as fixing the stage in the insolvency, after which no more proofs, such as the respondents, could be received,