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1927 Supreme(Lah) 158

Lahore High Court
Zafar Ali, J.
Firm Partap Singh Pardhan Singh - Appellant
Versus
Firm Bhai Mewa Singh Jodha Singh - Respondent
Decided On : 28-11-1927

JUDGMENT

Zafar Ali, J. - Under the Provincial Insolvency Act of 1907, when 'a debtor was adjudged an insolvent he ordinarily became immune from arrest. This immunity was taken away by the Provincial Insolvency Act of 1920 and according to that Act he could be arrested in execution of a decree, unless he should obtain a protection order under Section 31 of that Act. But the question is whether a decree-holder is competent to take out execution against the person of an insolvent judgment-debtor without obtaining leave of the insolvency Court. In the present case it is admitted that the insolvency Court has refused the insolvent's petition for a protection order but the decree-holder has not yet obtained permission to execute his decree by arrest of the insolvent. According to Clause (2), Section 28, Provincial Insolvency Act, 1920

no creditor shall, during the pendency of the insolvency proceedings, commence any suit or other legal proceedings (against the insolvent) except with the leave of the insolvency Court.

2. An execution proceeding is a legal proceeding and it was the first application for execution that the judgment-creditor made after having obtained the decree that he sought to execute. He thus commenced a legal proceeding but without the leave of the insolvency Court. The language of Clause (2), Section 28, Provincial Insolvency Act of 1920, is almost the same as that of Section 17, Presidency Towns Insolvency Act 1909. A Division Bench of the Madras High Court held in C.A. Easwara Aiyar v. K. Govindarijulu Naidu [1915] 39 Mad. 689 that in view of the provision of Section 17, Presidency Towns Insolvency Act when a person is adjudicated insolvent, creditors seeking any remedy against him must apply to get leave for that purpose. Another case in point is Thakurdeen v. J. Dubay [1920] 12 But. L.T. 218, where it was held that the words "other legal proceedings" in Section 17, Presidency Towns Insolvency Act, include an application for arrest in execution of a decree and that, therefore, no such application can be made against an insolvent after an order of adjudication has been made except with the leave of the insolvency Court.

3. I, therefore, set aside the order of arrest passed against the insolvent judgment-debtor by the Court below and direct that no proceedings in execution be taken against him unless the judgment-creditor should obtain leave of the insolvency Court to commence such proceedings. The parties to bear their own costs in this Court.

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