Ram Shanker v. Tiwari Janki Prasad — 1962 DIGILAW 347 (ALL)

JUDGMENT S. N. Katju, J. - These are two appeals arising out of suits for profits under Sec. 231 of the U.P. Tenancy Act. 2. The suits were decreed by the Assistant Collector, First Class, Etawah. From the aforesaid decision of the Assistant Collector the defendant-appellant appealed to the lower appellate court. The court below dismissed the appeal. Aggrieved from the decision of the court below the defendant has come up in second appeal to this Court. 3. The parties admittedly are co-sharers in the suit property. The two suits relate to the profits for the years 1355 to 1357F. and 1358 to 1359F. It is admitted that the plaintiff Janki Prasad is a co-sharer to the extent of one-half and the defendant Rama Shanker is a co-sharer to the extent of 7/16th share, while the defendants Nos. 2 to 8 own the remaining 1/16th share. None of the co-sharers is a Lambardar. 4. It is admitted that the defendant Rama Shanker was declared an insolvent and the Official Receiver, defendant No. 1, represents the estate of the defendant Ram Shanker. The adjudication of insolvency was prior to the institution of the suits in appeal. It was contended by the defendant Rama Shanker as also by the Official Receiver that the suits were not maintainable as against them. The defendant Rama Shanker contended that he was wrongly impleaded because the Official Receiver was representing his estate. It was further contended by him that the suits had been brought in violation of the provisions of Sec. 28 of the Provincial Insolvency Act and no leave of the court had been taken before instituting the suits. The Social Receiver also contended that apart from the leave under Sec. 28 of the Provincial Insolvency Act the suits against him were not maintainable on the ground that no notice under Sec. 80 of the Code of Civil Procedure had been served on him. The court below has repelled the contentions of the aforesaid two defendants on the ground that no authority had been cited in support of their contentions. 5. It was contended on behalf of the appellants that since Rama Shanker had been adjudged insolvent before the institution of the suits no suit could have been instituted without the prior leave of the court. 5. It was contended on behalf of the appellants that since Rama Shanker had been adjudged insolvent before the institution of the suits no suit could have been instituted without the prior leave of the court. The provisions of Sec. 28(2) run thus :- "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." 6. It is conceded that the aforesaid provisions are mandatory and no suit could be instituted by a creditor against the property of the insolvent in respect of a debt except with the leave of the Court. It was further admitted that such leave of the Court had to be obtained prior to the institution of such legal proceedings, and no subsequent leave could validate the proceedings, if commenced prior to obtaining such leave. The question, however, is whether in a suit for profits instituted by one of the co-sharers against the other co-sharers, a defendant co-sharer, who has been adjudged an insolvent could be said to be a debtor in respect of a debt. Furthermore, it has to be seen whether the defendant insolvent is indebted to the plaintiff `in respect of any debt provable under this Act.' The question, therefore, is whether the amount of profits due from the insolvent-defendant to the plaintiff would come within the meaning of "any debt provable under this Act." Learned counsel for the appellant contended that the suit was in respect of a debt and the suit was not maintainable. He relied on Davood Mohideen Rowther v. Sahabdeen Sahib, AIR 1937 Madras 667. It was held by a Division Bench of the Madras High Court in the aforesaid case :- that "The provisions of Sec. 28(2), Prov. Insol. He relied on Davood Mohideen Rowther v. Sahabdeen Sahib, AIR 1937 Madras 667. It was held by a Division Bench of the Madras High Court in the aforesaid case :- that "The provisions of Sec. 28(2), Prov. Insol. Act, are mandatory and after an order of adjudication is made, no suit or other proceeding can be instituted against the insolvent or his property without the leave of the insolvency Court and such leave is a condition precedent to the right of action. The want of previous sanction is a defect fatal to the suit and subsequent leave cannot validate it." Learned counsel for the appellant also relied on Raghubir Singh v. Ram Chander, I.L.R. 34 All. 121 = 8 A.L.J. 1287 where in a suit by a landlord against an insolvent-tenant, it was held that a suit for rent was not in respect of a secured debt. It was thus contended that the suits for the profits in the cases in appeal were similar in nature to a suit for rent and attracted the provisions of Sec. 28 of the Provincial Insolvency Act: Reliance was also placed on (Mst.) Radharani Dassaya v. Purna Chandra, AIR 1930 Calcutta 721(1) in which it was held that a suit for accounts against a receiver appointed by the Court was not maintainable without service of the notice, as contemplated by Sec. 80, C.P.C. 7. Learned counsel for the respondent has relied on Smt. Bhuban Mohini Devi v. Biraj Mohan Ghosh, 44C CWN. 74. In the aforesaid case it was thus observed :- "Sec. 80 of the Civil Procedure Code contemplates a suit against a personally liable for acts done or purporting to be done in his official capacity." A suit merely for possession of a property against the owners of an estate in respect of which a receiver has been appointed is not a suit against the receiver within the meaning of Sec. 80 C.P.C., and was a suit against an estate and, therefore, in such a suit no notice on the receiver under Sec. 80 of the Code was necessary. It was held further that leave of the Court which appointed the receiver should have been obtained before he could be made a party. Learned counsel also relied on a Division Bench decision of this Court Shyam Lal Gomatwala v. Nand Lal, A.I.R. 1944 Allahabad 220 = 1944 A.L.J. 248. It was held further that leave of the Court which appointed the receiver should have been obtained before he could be made a party. Learned counsel also relied on a Division Bench decision of this Court Shyam Lal Gomatwala v. Nand Lal, A.I.R. 1944 Allahabad 220 = 1944 A.L.J. 248. It was held there as follows :- "It may be that in the case of a Receiver appointed by the insolvency Court, permission may or may not be necessary, but in a case where a Receiver has been appointed under O. 40, R. 1, C.P.C. as the present Receiver was, the permission of the Court is absolutely necessary." Learned counsel contended that it was, therefore, absolutely necessary that permission should have been taken for impleading the Receiver. 8. It appears that the suit in appeal being for profits and the insolvent-defendant being one of the several co-sharers, the liability of the contesting defendant was not at all ascertained. No precise amount has been claimed against the defendant, and the amount has to be ascertained by the Court. I see force in this contention that Sec. 28(2) distinctly provides for such suits where the insolvent is indebted in respect of any debt provable under the Act. If the debt is not at all ascertained and the exact amount is to be determined on evidence by the Court, then it is not a debt which could amount to a debt provable under the Provincial Insolvency Act. It would follow that the provisions of Sec. 28 would not be attracted and, therefore, the prior leave of the Court before commencing the suit would not be necessary. No authority was cited by the learned counsel for the appellant in support of his contention that even in a suit, such as the suits in appeal, which were for recovery of profits, the claim would fall within the meaning of "any debt provable under this Act." 9. Coming to the next question, whether it was necessary that notice under Sec. 80, C.P.C. should have been given, and in the absence of any such notice the suit was not maintainable, I am in agreement with the view expressed in the case of Smt. Bhuban Mohni Devi, 44C CWN. Coming to the next question, whether it was necessary that notice under Sec. 80, C.P.C. should have been given, and in the absence of any such notice the suit was not maintainable, I am in agreement with the view expressed in the case of Smt. Bhuban Mohni Devi, 44C CWN. 74 and hold that since the suits were not against a public officer seeking to make him personally liable for acts done or purporting to be done in his official capacity the provisions of Sec. 80, C.P.C. will not apply and prior notice will not be necessary. 10. Furthermore, the profits claimed in the suit in appeal are for years prior to the date of the adjudication of the defendant as an insolvent, and it would follow that the Official Receiver in his personal capacity had nothing to do with the realisation of such profits, for which the defendant is to account for. Under these circumstances the Official Receiver could not be made personally liable for the act of the realisation of such profits. I am, therefore, of opinion that the notice under Sec. 80, C.P.C. was not necessary and it cannot be said that the suits in appeal were defective, because such notices were not served on the defendants. 11. I see no reason to interfere with the decision arrived at by the court below. The appeals are dismissed with costs.