1929 Supreme(Lah) 12
Lahore High Court
Tek Chand, J.
Haveli Ram - Appellant
Versus
Zamindara Bank - Respondent
Decided On : 12-02-1929
JUDGMENT
Tek Chand, J. - On 23rd May 1927, the Zamindara Bank. Hafizabad, obtained a money decree against Haveli Ram appellant. On 16th May 1928, the decree-holder applied for execution of the decree by arrest of the judgment-debtor and attachment of his property, and on the same day the executing Court ordered warrants for arrest and attachment to issue returnable by 23rd June 1928. The process-server reported on both these warrants that the judgment-debtor had gone to Lahore and that, therefore, the warrants could not be executed. These reports were laid before the Court on 23rd June 1928, when it directed that fresh warrants for arrest and attachment should issue. On the same day, the judgment-debtor Haveli Ram applied for the cancellation of the warrants on the ground that the firm Kanshi Ram-Chuni Lal, in which he was a partner, had been adjudicated insolvent on 25th May 1928. This application was dismissed by the Subordinate Judge, as he was of opinion that the adjudication of the firm could not affect the execution of a decree passed against Haveli Ram personally. He accordingly held that the execution proceedings for his arrest as well as for attachment of his property could continue.
2. On appeal by Haveli Ram, the learned District Judge, following A.I.R. 1927 Lah. 234, ruled that the adjudication of the firm was in law tantamount to an adjudication of each individual partner as insolvent, and consequently Haveli Ram judgment-debtor was for the purposes of this case to be treated as an insolvent. He accordingly held that under Section 28(2), Provl. Insol. Act, 1920 the decree-holder had no remedy in the executing Court against the property of the judgment-debtor. He, however, held that the order for arrest having been passed before the order of adjudication, should stand till such time as the insolvent obtained a protection order from the Insolvency Court
3. From this order the judgment-debtor has preferred this second appeal to this Court and it is urged on his behalf that the order of adjudication has rendered him immune from arrest in execution of the decree. After hearing both counsel I am of opinion that this contention is devoid of all force and must be overruled. It is no doubt true that under the Provincial Insolvency Act 3 of 1907, the adjudication of a judgment-debtor as insolvent resulted in his automatic protection from arrest In Clause (2)(b), Section 16 of that Act, it was specifically provided that on the making of an order of adjudication the insolvent, if in prison for debt, shall be released; and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under that Act shall during the pendency of the insolvency proceedings have any remedy against the property or person of the insolvent in respect of the debt or commence any suit or other legal proceedings, except with the leave of the insolvency Court. This clause has been replaced by Section 28(2), Act 5 of 1920, in which the sub-clause directing release of the insolvent from prison on the making of an order of adjudication has not been re-enacted nor is there any provision that during the pendency of the insolvency proceedings no creditor shall have any remedy against the person of the insolvent. On the other hand, in the new Act a new Section (Section 31) has been added which lays down that the Insolvency Court may, in appropriate cases, make an order for the protection of the insolvent from arrest or detention. It is thus clear that under the existing law, a judgment-debtor is not normally immune from arrest or detention in execution of a decree until he has obtained a protection order from the insolvency Court: see also Hari Ram v. Krishna Ram and Radhey Sham v. Mahomed Taqi A.I.R. 1923 Oudh 36.
4. It is admitted that in this case no such protection order had been obtained on 23rd June 1928 when the Subordinate Judge passed the order in question. Reliance has, however, been placed upon