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1920 Supreme(Mad) 193

IN THE HIGH COURT OF MARAS
J Wallis, S Aiyar
S.N. Sen, Official Assignee Of
Versus
Chidambaram Chetty And Anr.
Decided On : 21 July, 1920

The main legal point established in the judgment is the requirement for the Assignee or Receiver to be given notice before concluding that they had neglected or refused to continue the suit or to give security, as well as the power of the court to strike out, add, and substitute parties under Order I, Rule 10.

Headnote:

Order XXI - Insolvency - Official Assignee of Rangoon - Order XXII, Rule 8(1) - Order XXII, Rule 8(2) - Section 17 of the Provincial Insolvency Act - The court discussed the provisions of Order XXI and Order XXII, Rule 8(1) and (2) of the Civil Procedure Code, as well as Section 17 of the Provincial Insolvency Act. The court emphasized the requirement for the Assignee or Receiver to be given notice before concluding that they had neglected or refused to continue the suit or to give security. The court also highlighted the power of the court to strike out, add, and substitute parties under Order I, Rule 10.

Fact of the Case:

The suit was dismissed under Order XXI, Rule 8, as the Official Assignee of Rangoon was added as the third plaintiff to continue the suit, but the Subordinate Judge held that the Official Assignee of Madras was the proper person to continue the suit. The appeal was filed by the Official Assignee of Rangoon, who subsequently became the proper person to represent the insolvents estate.

Finding of the Court:

The Subordinate Judge's decision to dismiss the suit was found to be wrong as the Official Assignee of Rangoon was entitled to represent the insolvents estate. The court also held that the Subordinate Judge acted with material irregularity and prejudicially to the general body of the insolvents creditors.

Issues: The issues revolved around the representation of the insolvents estate and the application of Order XXI, Rule 8 and Order XXII, Rule 8 of the Civil Procedure Code, as well as Section 17 of the Provincial Insolvency Act.

Ratio Decidendi: The court emphasized the requirement for the Assignee or Receiver to be given notice before concluding that they had neglected or refused to continue the suit or to give security. The court also highlighted the power of the court to strike out, add, and substitute parties under Order I, Rule 10.

Final Decision: The court set aside the order of dismissal and directed the Subordinate Judge to restore the case to his file and dispose of it according to law, with costs hitherto to abide.

JUDGMENT.

John Wallis, C.J.

1. This is an appeal from an order of the Temporary Subordinate Judge of Sivaganga dismissing, under Order XXI, Rule 8, the suit of the plaintiffs who had become insolvents. Before the date of the petition the Official Assignee of Rangoon, where an order of adjudication had been made against the plaintiffs, had been brought on the record as third plaintiff to enable him to continue the suit. It was contended for the defendant that he was not entitled to represent the insolvents or carry on the suit, because, before the date of the adjudication in Rangoon, there had been an adjudication in Madras under which the insolvents estate had vested in the Official Assignee of Madras who was the proper person to continue the suit. The learned Subordinate Judge accepted this contention and his decision on this point is in accordance with the subsequent decision of this Court in Official Assignee of Madras v. Official Assignee of Rangoon 49 Ind. Cas. 210 : 42 M. 121 : 9 L.W. 36 : 35 M.L.J. 533 : 24 M.L.T. 455 where the question was expressly raised as between the two Official Assignees. It did not, however, follow that the suit should necessarily be dismissed because the Official Assignee of Rangoon was not entitled to represent the insolvents estate and had been wrongly added as third plaintiff. Order XXII, Rule 8(1), in its present form, Bays the suit is not to abate unless the Assignee, which must mean the real Assignee, at the time the Official Assignee of Madras, declines to continue the suit or to give security if so ordered. Order XXII, Rule 8(2), then says the suit may be dismissed if the Assignee neglects or refuses to continue the suit or to give security within the time ordered. There is no evidence that the Official Assignee of Madras knew of the pendency of the suit, and if he did not, he can sorely be said to have neglected or refused to continue it. The fact adverted to by the Subordinate Judge, that the Official Assignee of Rangoon might, if so minded, have given notice of the suit to the Official Assignee of Madras is irrelevant, as it is not suggested that any such notice was given, Now, it has been held in Ibrahim v. Abdur Rahiman 12 B.H.C.R. 257 that the defendant was not entitled to set up that the suit had abated without giving notice to the Official Assignee. In these circumstances, the order dismissing the suit was clearly worng.

2. It was then argued that the third plaintiff, the Official Assignee of Rangoon, was not entitled to prefer this appeal as the order dismissing the suit was right so far as he was concerned. At the date of the order he did not represent the estate of the insolvents, but it subsequently devolved upon him by reason of the order of this Court annulling the prior insolvency in this Court. See Office I Assignee of Madras v. Official Assignee if Rangoon 49 Ind. Cas. 210 : 42 M. 221 : 9 L.W. 36 M.L.J. 533 : 24 M.L.T. 455 and he is at the present time the proper person. I do not think it necessary to consider this Act objection because I think that, in dismissing this suit under Order XXII, Rule 8(2), without notice to the Official Assignee of Madras who then represented the insolvents estate, the Subordinate Judge acted with material irregularity in the exercise of his jurisdiction and prejudicially to the general body of the insolvents creditors. I think it is our duty to in. derriere and set aside the order of dismissal and direct the Subordinate Judge to restore the case to his file and dispose of it according to law. Costs hitherto to abide.

Sadasiva Aiyar, J.

3. The Official Assignee of Rangoon, S.N. Sen, who came in as the third plaintiff in substitution of the original plaintiffs, filed this appeal (Appeal Suit No. 323 of 1918). During the pendency of this appeal, his successor, Mr. O. De Glanville, has been substituted as the appellant,

4. The suit was brought by the two insolvents against the first defendant, their agent, for an account. The plaintiffs were declare








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