The court clarified the applicability of the Provincial Insolvency Act, Section 28(2) in cases involving joint family debts and the necessity of leave from the Insolvent Court.

Venkataramana Rao, J.

1. This appeal arises out of a suit brought to recover the amount due under two promissory notes dated 12th November, 1930 and 5th December, 1930, executed by one Bulli Gangireddi. the deceased father of the defendant in favour of the plaintiff. At the date of the execution of the suit promissory notes the defendant and his father were members of a joint family and undivided. The father was carrying on a family business and the suit debts were incurred in the course 01 that business. The father was adjudicated insolvent on 13th November, 1931, on a petition filed by his creditors. Before the order of adjudication, the defendant represented by his next friend filed a suit for partition against his father and on 16th November, 1931, a preliminary decree for partition was passed and it has since been brought to our notice that a final decree was passed on 6th. April, 1935. The plaintiff proved his debt before the. Official Receiver but no dividend was paid to him on the date of the suit for even up to the date of the decree in the lower Court. The learned Subordinate Judge gave a decree in favour, of the plaintiff and this appeal has been preferred by the defendant.

2. Several defences were raised in the lower Court but Mr. Raghava Rao his learned Counsel has confined himself to two main defences, (1) the suit is barred by limiitation; and (2) the suit is incompetent by reason of (a) the leave of the Insolvent Court was not obtained before the institution of the suit under Section 28 (2) of the Provincial Insolvency Act, and (b) the Official Receiver not having been made a party to the suit, the suit against the defendant alone on a debt contracted by the father is not maintainable.

3. In regard to the first contention the lower Court relied upon a deed of composition (Ex. D), dated 22nd March, 1933, filed in the Insolvency Court as an acknowledgment of the debt by the father. The main contention of Mr. Raghava Rao is that the composition deed would not operate as an acknowledgment. He has taken us through the terms of the composition deed but was not able to convince us that the view of the lower Court was wrong. Ex. D is signed by the insolvent and the creditors including the plaintiff. This contention must therefore be overruled.

4. The next contention relates to the maintainability of the suit. The first branch of his contention is in regard to the necessity for the leave of the Insolvent Court as a condition precedent to the institution of the suit. Section 28 (2) of the Provincial Insolvency Act runs 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.

In view of the recent decisions of the Privy Council and of this Court, on the insolvency of the father, the share of the son will not vest in the Official Receiver and it will not be the property of the insolvent within the meaning of the said clause. Though the share of the son does not vest, the decisions have laid down that the power of the father to sell the sons interest will vest in the Official Receiver. But that power ceases the moment the severance of interest between the father and the son takes place and in this case the severance has taken place. Mr. Raghava Rao was not therefore able to sustain the argument with reference to Section 28 (2) of the Act based on the expression "the property of the insolvent".

5. He next contended that Section 28 (2) prohibits the commencement of any suit or legal pr