The main legal point established in the judgment is that obtaining leave of the Insolvency Court is a condition precedent to the institution of a suit for the recovery of a debt provable in insolvency.

Venkataraman Rao, J.

1. The facts sufficient for the disposal of these revision petitions are fully stated in the order of reference and it is unnecessary to repeat them. On those facts the question arises whether, after a person is adjudged an insolvent, a suit filed by a creditor for the recovery of a debt provable in insolvency without the leave of the Insolvency Court is maintainable and can the Court in which the suit is instituted give leave to continue it? The sections of the Provincial Insolvency Act relevant to this question are Sections 28 and 29. Section 28, Clause 2 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 proceedings, except with the leave of the Court and on such terms as the Court may impose.

2. Section 29 runs thus:

Any Court in which a suit or other proceeding is pending against a debtor shall, on proof that an order of adjudication has been made against him under this Act, either stay the proceeding, or allow it to continue on such terms as such Court may impose.

3. Unhampered by authority, reading both sections together and giving the words their plain and natural meaning the following propositions are clearly deducible:

(i) Section 28(2) is 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; and

(ii) where any suit or other proceeding is pending on the date of the adjudication in any Civil Court, such Court on being apprised of the order of adjudication can in its discretion either stay the suit or proceeding or give leave to continue the same.

4. It will be seen that Section 27 which deals with the power of Insolvency Courts to make an order of adjudication is the first of the sections enacted under the heading "Order of adjudication". The succeeding sections deal with the legal consequences which follow from the order of adjudication. Thus the point of time in relation to which both Sections 28 and 29 speak is the date of the order of adjudication. Section 28 deals with proceedings not pending on the date of the order of adjudication and Section 29 deals with proceedings then pending. The term "pending" literally means "begun but not yet carried out or finished". Therefore when Section 29 speaks of a suit pending, it refers to a suit already begun but not finished when the order of adjudication is made. (See Subramanyam v. Narasimham (1928) 56 M.L.J. 489.) In the view that under Section 28 leave of the Court is a condition precedent to the right of action, no other interpretation of Section 29 is possible. If leave is a condition precedent, the want of it is a defect fatal to the suit and subsequent leave cannot validate it. If it be held that leave can be given under Section 29 to continue a suit commenced without the leave of the Insolvency Court, it would be rendering Section 28 nugatory. To illustrate, suppose a District Court before which proceedings in insolvency are pending refuses to grant leave to a creditor to institute a suit against an insolvent; after such refusal the creditor files a suit in the District Munsifs Court and it can grant leave to continue the suit; this means the District Munsif will be sitting as it were in judgment against the order of the District Judge, a state of affairs which could never have been in the contemplation of the legislature in enacting the Provincial Insolvency Act, whatever may be the English Law o