The Court clarified the application of Section 16 of the Insolvency Act and the effect of obtaining leave subsequently on a suit instituted without leave.

Phillips, J.

1. In this case the appellant (first defendant) attached certain properties in execution of a decree obtained against Defendants Nos. 2 to 4 on 22nd June 1915. These properties were actually attached on 25th June 1915, but prior to that, on 24th June 1915, Defendants Nos. 2 and 3 presented an insolvency petition. The plaintiff who had purchased the properties under a sale-deed dated 11th March 1915, put in a claim petition on 28th July 1915, and this was allowed on 8th November 1915. Defendants Nos. 2 and 3 were adjudged insolvents on 16th November 1915, and first defendant filed a suit to set aside the claim order on 31st March 1916, and eventually obtained a decree which the present plaintiff sues to set aside. The Subordinate Judge has given the plaintiff a decree on the ground that the decree obtained by the first defendant is null and void. The reasons given by him are that the Official Receiver was not made a party thereto, that no sanction had been obtained to institute the suit under Section 16, Clause (2) (b) of the Provincial Insolvency Act and that the decree of the District Court in appeal was passed without jurisdiction.

2. To take the last point first, I think the Subordinate Judges order is wrong. The suit O. S. No. 23 of 1916 was valued at Rs. 5,816 and consequently under Section 13 of the Civil Courts Act, an appeal would ordinarily lie to the High Court. The appeal was, however, filed in the District Court and in the memorandum of appeal we find that the value of the appeal and the value of the suit are given as Rs. 4,000 for purposes of jurisdiction. I am inclined to think that the value was the correct value and not Rs. 5,816 given in the original plaint. Whether that is so or not, under Section 11 of the Suits Valuation Act:

Notwithstanding anything in Section 578 of the Civil P. C., an objection that by reason of the over-valuation or under-valuation of a suit or appeal a Court of first instance or lower appellate Court, which had not jurisdiction with respect to the suit or appeal exercised jurisdiction with respect thereto shall not be entertained by an appellate Court unless, etc.

3. It is now admitted that none of the exceptions would apply. It is, I think, clearly obvious that unless this appeal had been valued at less than Rs. 5,000 the District Judge would not have admitted it and tried it, but we see in the appeal memorandum that not only was the appeal which related to the whole subject-matter of the suit valued at Rs. 4000, but also that it states that the suit itself was valued at Rs. 4,000. I think it is, therefore, clear that it was by reason of the under-valuation that the District Court exercised the jurisdiction. No objection was then taken and, therefore, no objection can be taken in the appellate Court. This is not an appellate Court, but I certainly think that the principle of this section must be extended to collateral proceedings in the same manner as the principle of Section 21 of the Civil P. C. has been held to be applicable to proceedings other than appeals vide Chokkalingha Pillai v. Velayudha Mudaliar A. I. R. 1925 Mad. 117. It has been held by a Full Bench of this Court in Kelu Achan v. Parvathi Nethiyar A. I. R. 1924 Mad. 6 that the mere fact that a party was deprived of the right of appeal on facts before the High Court cannot be held to prejudicially affect the disposal of the appeal on the merits within the terms Section 11 of the Suits Valuation Act. The, respondent relies on Ranjis Missir v. Ramudar Singh [1912] 17 C. W. N, 116 but that decision is not an authority as it does not refer to Section 11 of the Suits Valuation Act and it is doubtful whether that case would come within that section. This being so the decree of the Court is not void for want of jurisdiction.

4. The other point raised that the leave of the insolvency Court was not obtained under Section 16 of the Insolvency Act is a more difficult question. That section says that after the making