Appointment of person as hereditary trustee whose insolvency has been annulled.

This appeal by the Commissioner of the Hindu Religious Endowments raises an interesting point for determination. The appeal is against an order passed by the learned District Judge of Chingleput on a petition filed under section 84(2) of the Madras Hindu Religious Endowments Act by one Nallathambi Ayyaswami Mudaliar, the younger son of Suryaprakasa Mudaliar, who died on 16th March, 1942, to set aside an order passed by the Board declaring his elder brother P.N. Swaminatha Mudaliar to be the hereditary trustee on the latter’s application. The learned District Judge amended the order of the Board with a direction that the elder brother Swaminatha Mudaliar would be allowed to continue as hereditary trustee managing the affairs of the temple till a pending question of partition as between the brothers was decided and the right of the younger brother to be the hereditary trustee in rotation was determined by the Board. The Commissioner now questions the jurisdiction of the learned District Judge to amend the order of the Board in this manner.

The relevant and undisputed facts are briefly these. The elder brother P.N. Swaminatha Mudaliar was adjudicated an insolvent in I.P.No.109 of 1922 and his adjudication was annulled under section 41 of the Presidency Towns Insolvency Act, on 9th March, 1949, for failure to apply for his discharge. He appears to have come to Madras where he did business and got involved in financial difficulties. The younger brother stayed on in Poonamalle and appears to have been looking after the temple of Sri Vaideeswarar, after his father’s death The adjudication of the elder brother as an insolvent was brought to the notice of both the Religious Endowments Board and the learned District Judge. But both passed it over very lightly on the ground that the High Court had “annulled” the insolvency. Under section 54(1) of the Madras Hindu Religious Endowments Act a non-hereditary trustee shall cease to hold his office, inter alia, if he applies to be adjudicated or is adjudicated an insolvent. Under section 54(3) of the said Act if a hereditary trustee, inter alia, becomes subject to this disqualification the Board may supersede him and appoint a fit person to administer the temple until the disability of the trustee ceases to exist.

Normally the disability of a bankrupt or an insolvent would cease to exist on his obtaining an honourable discharge in the event of the annulment of his adjudication on composition with his creditor or under section 21 of the Presidency Towns Insolvency Act, corresponding to section 35 of the Provincial Insolvency Act, if he satisfies the Court that he ought not to have been adjudged an insolvent or where it has been proved that he has paid all his debts in full. Most unfortunately, the Insolvency Act uses the same word “annulment” to include cancellation of the adjudication on both honourable grounds and also on very dishonourable grounds, namely, the failure of the insolvent to appear before the Insolvency Court at all and stand an examination or even to apply for his discharge. In the latter case, the adjudication is annulled under section 41 of the Presidency Towns Insolvency Act primarily by way of a penalty and punishment to the insolvent who is for breach of this duty imposed upon him under the Act, exposed to ordinary process in execution at the hands of his decree-holders. It is therefore not possible to hold that an annulment of an adjudication under section 41 is tantamount to removal of a disability and does not continue to be a disqualification contemplated by section 54(1)(b) of the Madras Hindu Religious Endowments Act. I consider it very irregular, to say the least of it, in this view of annulment under section 41 of the Presidency Towns Insolvency Act, for the Board ever to appoint as a hereditary trustee a person who has been adjudicated an insolvent and whose adjudication has been annulled because he has not performed his elementary obligation under the Act