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1978 DIGILAW 63 (BOM)

Anant Govind Jhara v. Mataji Raghunathji Rathod, deceased by heir Ramlal Mataji Rathod

1978-03-28

G.N.VAIDYA

body1978
JUDGMENT - G.N. VAIDYA, J.:---The above first appeal is filed by the judgment-debtor, challenging the order, passed by the IInd Joint Civil Judge, Senior Division, Poona, to execute, by issuing the warrant under Order 21, Rule 46, upon Darkhast No. 74 of 1966, filed on April 28, 1966, for executing a money decree, passed in Special Civil Suit No. 154 of 1953, dated October 24, 1953. 2. The learned Civil Judge thought that the period of seven years between 1954 and 1961, during which an Insolvency Petition No. 10 of 1954 was filed by some other creditor of the judgment debtor giving a list of creditors including the present decree-holder was pending was liable to be excluded for computing the period of limitation, under section 14(2) of the Limitation Act, 1963, which reads as under :--- "14(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a Court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it." 3. The finding of the learned Judge is challenged in the above first appeal, on the ground that the article of limitation applicable under Limitation Act, 1963, was Article 136, which provided the period of limitation of 12 years from the time the decree became enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, when default in making the payment or delivery in respect of which execution is sought, takes place. In the present case there was no such dates given; and it was a simple money decree, passed as far back as, on October 24, 1953, and the Darkhast was barred by time, inasmuch as the decree-holder in the present case had no himself filed by insolvency petition, or taken any steps diligently or bona fide in those proceedings, and in fact he allowed the petition to be dismissed for want of prosecution by the creditor who had filed the petition on July 3, 1959, and he had not even joined or was made a party in the appeal filed by one other party, in Civil Appeal No. 4 of 1959. It was further submitted that it is settled law, according to the law of insolvency, in this country, that it is only under section 29, of the Provincial Insolvency Act, 1920, after the order or adjudication is made, that the period from the date of the order of adjudication to the date of the order of annulment, shall be excluded, as laid down in section 78(2); and hence, in the absence of any order of adjudication in this case, nothing prevented the decree-holder from applying for execution between 1954 and 1959, during the pendency of the insolvency proceedings. 4. These contentions are supported by the highest authority in the country, and must be upheld. In (Yeshwant Deorao Deshmukh v. Walchand Ramchand Kothari)1, 1950 S.C.R. 852, it was laid down that : "The period of time during which the decree-holder was prosecuting proceedings for adjudging the judgment-debtor an insolvent cannot be excluded under section 14(2) of Limitation Act, in computing the period of limitation for making an application for executing the decree." Notwithstanding this decision, when the Parliament enacted the new Limitation Act in 1963, the provisions of section 14 did not make any special provision for excluding the insolvency proceedings prior to the order of adjudication, as in the present case. 5. Moreover, this Court, in a Division Bench, consisting of Gajendra-Gadker and Vyas, JJ., in (Magandas Bhukandas Gujarathi v. Bhalchandra Ramrao Bangali)2, I.L.R. 1954 Bom. 840, held that : "Section 14 of the India Limitation Act, 1908, could not apply as the relief which the plaintiff claimed in the darkhast was not the relief claimed in his insolvency application"; Observing at pages 856-857: "Mr. 840, held that : "Section 14 of the India Limitation Act, 1908, could not apply as the relief which the plaintiff claimed in the darkhast was not the relief claimed in his insolvency application"; Observing at pages 856-857: "Mr. Gupte has next contended that in the interval between January 22, 1941 and October 11, 1949 the appellant decree-holder was prosecuting with due diligence a proceeding in insolvency and, therefore, under section 14(2) of the Limitation Act the said period should be excluded. I am unable to agree. The relief which the decree-holder was seeking in the insolvency proceeding was not the same was the relief he is seeking in the darkhast vide Yeshwant Deorao v. Walchand". 6. Again, in an earlier decision by Macleod, C.J., and Lallubhau Shah, J., in (Sidhrai Bhojraj and others v. Alli Haji)3, I.L.R. 1923(46) Bom. 244, it was laid down, in the context of the provisions of the Presidency Towns Insolvency Act, 1909, that : "Where, after a debt has become due and payable and time has begun to run against the creditor, the debtor is adjudicated insolvent but his petition is subsequently dismissed and the adjudication order cancelled, the time during which insolvency proceedings were pending cannot be deducted in computing the period of limitation for a suit instituted by the creditor against the debtor to recover the debt." Shah, J. observed that : "The mere fact of an adjudication order having been made does not necessarily mean that there is an injunction or order staying the institution of a suit within the meaning of section 15 of the Indian Limitation Act, though the effect of the order of adjudication read with section 17 of the Presidency Towns Insolvency Act is to prevent a creditor from commencing any suit against his debtor without the leave of the Court." 7. It may be that so far as it was a case under the Presidency Towns Insolvency Act, the decision of Macleod, C.J. and Shah, J. may not be strictly applicable as regards the provisions of section 78(2) of the Provincial Insolvency Act, 1920. It may be that so far as it was a case under the Presidency Towns Insolvency Act, the decision of Macleod, C.J. and Shah, J. may not be strictly applicable as regards the provisions of section 78(2) of the Provincial Insolvency Act, 1920. But, in the absence of an order of adjudication, the ratio will apply unless there was some provision in the Provincial Insolvency Act or in some other law which prevented the decree-holder from applying for the execution of decree, during the pendency of insolvency proceedings, at the instance of some other creditor pending adjudication of insolvency. No such provision and no authority was cited to show that merely because of the pendency of the insolvency proceedings, the decree-holder was barred from filing the darkhast Application, as erroneously held by the learned Civil Judge in this case. It may be that when such proceedings are filed by the decree-holder, they may be stayed at the instance of the judgment-debtor or creditors or the receiver appointed in the insolvency proceedings; but there is no bar to the filing of the darkhast, and hence, it would be wrong to say that the period during which the insolvency proceedings were pending, should be excluded under section 14(2) of the Limitation Act, which has already been quoted above. 8. Moreover, it also very difficult to say, in the facts and circumstances, of the present case, the period can be excluded merely because the decree-holders name was included in the list, though the decree-holder had himself not taken any diligent steps, in good faith, in those proceedings, particularly when I find from the certified copies of the orders produced by Mr. Agarwal, on behalf of the appellant in this Court, that the creditors petition was dismissed, for want of prosecution, as far back as July 3, 1959, without making any provision for the dues under the decree, to the decree-holder; and the decree-holder did not even lift his little finger to challenge that order; and he was not even made appellant or respondent in the appeal which was filed, of which also a certified copy is produced by Mr. Agarwal before me. Agarwal before me. It must be, therefore, held that the decree-holder, in the present case, is not shown to have acted in good faith or with due diligence, in waiting till the insolvency proceedings were disposed of, when there was no bar under the law, which prevented him from filing the darkhast. 9. In these circumstances, it is also difficult to say whether he was seeking the same relief which he is now seeking, in the insolvency proceedings as nothing has been produced before me to show what exactly he was seeking in the insolvency proceedings. 10. Lastly section 14(2) requires farther that the proceedings must have been prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of like nature, is unable to entertain it. This requirement is also not at all fulfilled by the insolvency proceedings in the present case, inasmuch as, there is nothing to show that either the insolvency proceedings were dismissed for want of jurisdiction or the Court dismissed it because it was unable to entertain it. What we are concerned with is, whether the insolvency Court could deal with the claim of the decree-holder and whether the claim has been dismissed by the insolvency Court for want of jurisdiction or other cause of like nature which disabled it from entertaining the claim. 11. I, therefore, find that the lower Court failed to apply its mind to the requirement of section 14(2), the restriction on the stay of proceedings, contained in section 29 of the Provincial Insolvency Act, 1920, and the special provisions contained in section 78 of that Act; and his attention was also, very unfortunately, not drawn to the aforesaid decisions of the courts, including the decisions of the highest Court and this Court. 12. In the circumstances, the order passed by the learned Civil Judge, holding the darkhast to be in time, is patently illegal, and must be set aside. 13. In the result, the first appeal is allowed. The judgment and order, passed by the IInd Joint Civil Judge, Senior Division, Poona, on July 22 1974, are set aside and the Special Darkhast No. 74 of 1966, is dismissed as barred by Article 136 of the Limitation Act, 1963. 14. 13. In the result, the first appeal is allowed. The judgment and order, passed by the IInd Joint Civil Judge, Senior Division, Poona, on July 22 1974, are set aside and the Special Darkhast No. 74 of 1966, is dismissed as barred by Article 136 of the Limitation Act, 1963. 14. But, in the circumstances of the case, having regard to the fact that the decree-holder has not able to recover anything from the judgment-debtor, there shall be no order as to costs throughout. -----