Bhandari, C.J. - (1.) Two questions arise for decision in the present case, namely, (1) whether the provisions of Order 34 of the Code of Civil Procedure apply to movable property; and (2) whether the provisions of Section 28(6) of the Provincial Insolvency Act empower a secured creditor to execute a decree against the personal property of an insolvent after the order of discharge has been passed.
(2.) The facts "of the case are simple and not in dispute. Messrs. K. B. Burnel and Company obtained a loan from the New Citizen Bank of India Limited by depositing certain pieces of serge by way of security. On 17-6-1947 the Company was declared insolvent. On 30-8-1948 the Bank brought a suit against the Company for the recovery of a sum of Rs. 382/12/ and on 10-3-1949 an 'ex parte' decree was granted in favour of the Bank. About a year later the serge belonging to the Company was sold for a paltry sum of Rs. 7/8/, but in view of the provisions of Section 28(6), Provincial Insolvency Act, it declined to make an application to the Official Receiver or to inform him that it wanted to rank as one of the creditors of the Company. The Company was discharged on 14-12-1951. On 25-6-1952 the Bank submitted an application under Order 21, Civil P. C. for the execution of the decree. The executing Court held that it was the duty of the Bank, after the serge had been sold, to apply to the Official Receiver for the recovery of the balance and that as no such application was made and as the debt owing by the Company to the Bank was not proved before the discharge of the company, it was not open to the Bank to claim preferential treatment. In view of these findings the Court dismissed the application filed by the Bank. The Bank has come to this court in revision and the question for this Court is whether the Court below has come to a correct determination in point of law.
(3.) The first point for consideration is whether the provisions of Order 34, Civil P. C. apply to movable property. In -- 'Co-operative Hindusthan Bank, Ltd. v. Surendra Nath', AIR 1932 Cal 524 (A), a Division Bench of the Calcutta High Court held that the rules of Order 34, based as they are on well settled rules of equity, apply not only to suits for mortgages on immovable property but also to suite on mortgages of movable property. This observation, however, appears to me to be obiter and has been made without a careful consideration of the relevant facts. The correct principle appears to have been enunciated in --'Official Assignee Of Bombay v. Chimniram Motilal', AIR 1933 Bom 51 (E) where the learned Judges after a careful consideration of the history of that Order and the fact that the Chapter is headed "Suits relating to mortgages of immovable property", held that the operation of Order 34 must be confined to mortgages of immovable properly.;