C. Venkataramanujalu Chetty, an Insolvent A.B. Palani vs The Official Assignee of Madras

Venkataraman, J.—This is an appeal by a creditor of the insolvent against the order of the Official Assignee rejecting part of his claim. The

office has taken an objection on the question of limitation.

Section 101 of the Presidency Towns Insolvency Act reads:

The period of limitation for an appeal from any act or decision of the Official Assignee, or from an order made by an Officer of the Court

empowered u/s 6, shall be twenty days from the date of such act, decision or order, as the case may be.

The Official Assignee passed the order in this case on 21st December 1963; but the order was not pronounced. According to the usual

practice, the order was communicated to the party by post; and it reached him only on 3rd February 1964. Thereafter, he applied for a certified

copy of the order on 18th February 1964, got the copy on 12th March 1964 and filed the appeal on 18th March 1964. The office is prepared to

exclude the time taken for obtaining the certified copy, but feels a doubt as to whether time should be calculated from 21st December 1963 or 3rd

February 1964. The office submits that if time is calculated from 21st December 1963, the appeal will be time-barred but otherwise, if the time is

calculated from the 3rd February 1964. The question, therefore, is whether the time has to be calculated from the date of the order or from the

date of the communication of the order. This depends on the question whether there is any provision in the Act that such an order has got to be

pronounced in Court or has actually to be communicated to the party.

Rule 25 of the second Schedule to the Act states:

The Official Assignee shall examine every proof and the grounds of the debt, and in writing admit or reject it in whole or in part, or require further

evidence in support of it. If he rejects a proof, he shall state in writing to the creditor the grounds of the rejection.

There is nothing in the provision which requires the Official Assignee to pronounce an order, as is being done in the case of judgment of Courts.

As I said, the normal practice is to communicate such orders to the party, and that was the course which was actually adopted in this case. In such

cases, justice requires that the period of 20 days should commence only from the date of the receipt of the copy of order by the party. Otherwise,

it may happen that even before he comes to know of the order passed against him, the period of 20 days would have expired. This principle of

construction has been adopted consistently in several decisions of this Court, the last of which is Muthiah Chettar v. Commissioner of Income Tax,

Madras ILR (1951) Mad. 815. There, a person who was assessed to income tax moved the Commissioner of income tax in revision u/s 33A(2)

of Act XI of 1962, the relevant portion of which is:

The Commissioner may, on application by an Assessee for revision of an order under this Act passed by any authority subordinate to the

Commissioner made within one year from the date of the order...call for the record of the proceeding .

In that case the application was filed within one year from the date of the receipt of the order by the Assessee, but beyond the period of one

year from the date of the order. It was held that the application was within time.

The principle is thus stated at page 818:

...if a person is given a right to resort to a remedy to get rid of an adverse order within a prescribed time, limitation should not be computed from a

date earlier than that on which the party aggrieved actually knew of the order or had an opportunity of knowing the order and therefore must be

presumed to have had knowledge of the order.

The earlier decision in Annamalai v. Cloete ILR (1883) Mad. 189, 190 which was under the Madras Survey and Boundaries Act, expressed

the principle thus:

If there was any decision at all in the sense of the Act, it could not date earlier than the date of the communication of it to the parties; otherwise,

they might be barred of their right of appeal without any knowledge of the decision having been passed.

The wording in those Acts is similar to the one in Section 101 of the Presidency Towns Insolvency Act. The above decisions are binding on me.

I respectfully follow them. It is not suggested that in this case the applicant knew or could have known the order in question prior to 3rd February

1964, the date of communication of the order to him. I think it necessary to add that, in this case, no doubt has been raised with regard to the

exclusion of time u/s 12(2) of the Limitation Act for obtaining the certified copy of the order. Section 12(2) reads:

In computing the period of limitation prescribed for an appeal, an application for leave to appeal and an application for a review of judgment, the

day on which the judgment complained of was pronounced, and the time requisite for obtaining a copy of the decree, sentence or order appealed

from or sought to be reviewed shall be excluded.

In terms the section will apply only where there is a judgment which was pronounced and against which an appeal is sought to be filed. In the

present case there is no pronouncement of the judgment or order; but by analogy the principle of Section 12(2) of the Act has been, extended.

That will be right in the present case, because what was communicated to the Appellant was only the final result of the decision of the Official

Assignee that a part of the claim alone had been admitted. The reasons for the decision were not communicated and, obviously, it was necessary

for the Appellant to obtain a certified copy of those reasons, before he could file an appeal. The position would have been different, if what was

communicated to the Appellant was not merely the gist of the decision but also the full order of the Official Assignee containing the reasons. In such

a case, since the entire order would be available to the Appellant, he need not again obtain a certified copy of the order, and there would be no

justification for excluding the time taken for obtaining a certified copy of the order on the analogy of Section 12(2) of the Limitation Act.

The appeal is in time. It will be posted for hearing on merits.