Chatrati Sriramamurthi and Another vs Official Receiver, Krishna and Others

Viswanatha Sastri, J.—This is an appeal from the decree of dismissal of O. S. No. 8 of 1942 on the file of the Court of the Subordinate Judge of Vijay Wada brought by the Plaintiffs for the recovery of possession of a half share in the A schedule properties with manse profits, or, in the alternative, for a half share of the amounts realized in Court sales in which the properties were sold, if the sales themselves could not be set aside.

Sitaramayya Garu, an affluent pleader of Bezwada, died in 1905 leaving an adopted son, the first Defendant, who inherited his properties. By his first wife, Satyavatamma who died in 1919, the first Defendant had two sons, the elder of whom is the third Defendant, tire younger Kesavarow having died before suit. By his second wife, Venkata-lakshmamma who died on 12th April, .1934, the first Defendant had four sons of whom one died an infant and another was adopted into another family; the remaining two sons are the Plaintiffs. The first Plaintiff was born on 18th June, 1922 and the second on 2nd February, 1925 and the suit was filed on 23rd January, 1941. The first Defendant died on 14th November, 1945, pending the suit. During his lifetime, the first Defendant acquired some properties and these, in addition to those inherited by him, were said to be valuable. He also started a commission agency business and a rice mill which ended in a loss. He was living in a comfortable style with his family in Bezwada. He was involved in litigations wherein he unsuccessfully claimed occupancy rights in certain mokhasa and shrotriem lands which he had purchased. He got into debts and was adjudged an insolvent on 27th April, 1931 on his own petition I. P. No. 6 of 1931 presented on 19th January, 1931, in the Sub-Court, Vijayawada. The Official Receiver was about to sell the properties of the insolvent on 4th September, 1931. On the previous day, the four sons of the first Defendant by hii second wife who were then in existence and who were minors represented by their maternal uncle as next friend filed O. S. No. 302 of 1931 on the ftU of the District Munsifs Court. Bezwada, for a partition of their shares of the family properties and for,an injunction restraining the Official Receiver from I (Selling them except tire l/7th share of the insolvent ''. Jperein. The insolvent father, the step-brothers of (4he Plaintiffs, the Official Receiver and the creditors -Wiera.all Defendants in that suit.

The Plaintiffs and their step-brothers entered into!�An arrangement on 1st December, 1953 among them wives regarding the division of the properties and debts. The suit however was dismissed by the Court �on the ground that a partition was not in the interests of the minor Plaintiffs. There was no appeal from the decree. Many of the creditors filed suits against 1 "die 1st Defendant and his sons and obtained decrees.

O. S. No. 22 of 1931, O. S. No. 29 of 1934 & O. S. ''No. 37 of 1934 on tire file of the Sub-Court, Bezwada were three such suits and decrees. In execution of'' these decrees, the shares of the sons in the family ''properties were sold and purchased by some of the Defendants in the present suit, the Official Receiver caving sold the one-seventh share of the insolvent. The decrees in O. S. No. 22 of 1931, O. S. No. 29 1934 and O. S. No. 37 of 1934 and the Court Sales: that followed them are now sought to be set side by die Plaintiffs.

Though it was alleged in the plaint that the debts of the father were illegal and immoral, the learned advocate for the Appellants did not challenge .the finding of the Court below which was adverse Jo the Plaintiffs on this point. The main attack on '' these decrees is that the next friend of the Plaintiffs in O. S. No. 302 of 1931, and their guardians-ad-them in, the suits of the creditors above referred to Were; guilty of gross negligence in conducting or: defending the suits.

In spite of the dissent expressed in Krishnadas Padmanabhrao Chandavarkar Vs. Vithoba Annappa Shetti, it must now be J tfaken in view of the decision of die Supreme Court Bishundeo Narain and Another Vs. Seogeni Rai and Jagernath, , which affirms the principle of die decisions of the Madras, . Allahabad, Calcutta, Lahore and Patna High Courts, Ayya Pillai Vs. Ayyadurai Goundan and Others, at p. 85) (C); Haji Muhammad Shadak Koyi Sahib Vs. Burra Venkata Komaraju and Others, ;Egappa Chettiar v. Ramanathan Chcttiar, ILR 1942 Mad 526 : AIR 1942 Mad 384 Chunduru Ponniyya and Others Vs. Rajam Viranna and Others, ; Mt. Siraj Fatima and Others Vs. Mahmood Ali and Others ; Mahesh Chandra Bayan Vs. Manindra Nath Das and Others, ; Iftkhar Ilussain Khan v. Bearrt Singh, ILR 1946 Lah 515 : AIR 1946 Lah 233 and Kamakshya Narain Singh Bahadur Vs. Baldeo Sahai and Others, (FB) g)V, that gross negligence on the part of a nextend or guardianadlitem of the minor in conducting or defending a suit to which he is a party, entitles the minor to challenge the decree passed taints'' him and avoid its effects.

The negligence must have been such as to result .in the loss of a; right which would have been successfully asserted if the suit had been conducted or leased with, ordinary care and prudence. It might Court in the omission to raise an available plea or, adduce available evidence to subunit it. If an injunction restraining the Official Receiver from I (Selling them except tire l/7th share of the insolvent ''.peering. The insolvent father, the step-brothers of the Plaintiffs, the Official Receiver and the creditors -Were all Defendants in that suit.

The Plaintiffs and their step-brothers entered into an arrangement on 1st December, 1953 among them wives regarding the division of the properties and debts. The suit however was dismissed by the Court on the ground that a partition was not in the interests of the minor Plaintiffs. There was no appeal from the decree. Many of the creditors filed suits against 1 "die 1st Defendant and his sons and obtained decrees.

O. S. No. 22 of 1931, O. S. No. 29 of 1934 and O. S. ''No. 37 of 1934 on tire file of the Sub Court, Bezwada were three such suits and decrees. In execution of'' these decrees, the shares of the sons in the family ''properties were sold and purchased by some of the Defendants in the present suit, the Official Receiver fcaving sold the one-seventh share of the insolvent. The decrees in O. S. No. 22 of 1931, O. S. No. 29 ii 1934 and O. S. No. 37 of 1934 and the Court Sales: that followed them are now sought to be set side by die Plaintiffs.

3 Though it was alleged in the plaint that the debts of the father were illegal and immoral the learned advocate for the Appellants did not challenge .the finding of the Court below which was adverse Jo the Plaintiffs on this point. The main attack on '' these decrees is that the next friend of the Plaintiffs in O. S. No. 302 of 1931, and their guardians-ad-Them in, the suits of the creditors above referred to I Were; guilty of gross negligence in conducting or could only sell the share of the insolvent leaving the''. creditors to pursue their remedies against the sons'' shares by means of suits instituted against them invoking the pious obligation of the sons to discharge their father''s untainted debts.

This was the view taken by the Madias High Court and.it has since been upheld by the Supreme - Court. Veerappa Chettiar Vs. S.A. Ar. M. Annamalai Chettiar and Others, ; Kuppan: Chettiar v. Masa Goundan, ILR 1937 Mad 1004:AIR 1937 Mad 424 The Official Receiver Vs. Amara Seshayya and Others, (N); Firm Schwebo Vs. Subbiah, ; Pannalal and Another Vs. Mst. Naraini and Others, dP). It was evidently to avoid having to institute such suits that the creditors resisted the |''minors'' suit fbr partition. The Official Receiver '' sold only the l/7th share of the insolvent father j pending O. S. No. 302 of 1931.

There is one circumstance connected with, of O. S. No. 302 of 1931 to which pointed reference Was made by the Appellants. Pending the suit the v: J4th Plaintiff died and the remaining three Plaintiffs J and their step-brothers entered into au agreement. Exhibit A-101 whereby the Plaintiffs agreed to take Jl/18th share and their step-brothers l/3rd share of the 6/7ths of the family properties left unsold by the Official Receiver. They agreed to divide the family debts in the same ratio.

The compromise was filed in Court along with I. A.. No. 2688 of 1933 praying for the recording of the compromise. I. A. No. 2688 of 1933 was dismissed by die Court on 8th January, 1934, along with the suit. The next friend of the minors did not prefer an appeal other from, the order refusing to record the compromise in I. A. No. 2088 of 1933 or the decree dismissing the suit.

It is urged on behalf of the Appellants that, in the circumstances then existing it was to the interest of the minors to have a partition in O. S. No. 302 of .1931, that the decrees of the Court dismissing'' the suit and the order refusing to record the ''" compromise in I. A. No. 2688 of 1933 were both erroneous and grossly detrimental to their interests and that it was the duty of the next friend of the �minors to have appealed against those decisions.� Consequently, it was argued that the Plaintiffs should be regarded as having become divided in ''1931 or in 1934 on the date of Exhibit A-101, that in the suits filed by the creditors (O. S. No. 22 of, pL931, O. S. 29 of 1934 and O. S. 37 of 1934) impleading the present Plaintiffs, who were then minors, as Defendants their guardians ad litem should have but did not put forward defences appropriate to. their position and status as divided sons and that their omission to do so was gross negligence on their part. It is not the case of the Plaintiffs "seven in their plaint that they had become divided firm their father in 1933 or later. They do not then claim their share of the family properties adoring to Exhibit A-101. They proceed on the _ Sifting that they were members of a joint family Titled to A half share in the family properties. The Plaintiffs have, in effect, accepted the decin'' ''in O. S. No. 302 of 1931 and claimed relief the basis of membership of a joint family.

Seconly, it cannot be said that the omission of the J next friend to appeal from the decision in O. S. No. 302 of 1931 was gross negligence on his part: The first Defendant was unable to pay his debts from the family properties and filed an insolvency petition in January, 1931; The next friend of the Plaintiffs in O. S. No. 302 of 1931 was their maternal uncle. Having regard to the fact that O. S. No. 302 of 1931 was filed on the day previous to the date fixed for sale of the insolvent''s property by the Official Receiver and an injunction was asked restraining the Official Receiver from selling the properties, it is likely that their insolvent.father was behind the minor Plaintiffs.

The Plaintiffs put forward a plea in O, S. 302 of 1931 that the debts of their father were illegal and immoral but there was no evidence to substantiate it. Even if a partition had been decreed p> the Plaintiffs in O. S. No. 302 of 193.1. their shares were liable to be proceeded against for satisfaction of the pre-partition debts of their father, if the ere-'' ditors took appropriate steps for the purpose, which indeed they did. The chance of salvaging any portion of the family property after satisfying the creditors was, to say the least, very remote. The suit itself was a somewhat speculative and hazardous venture whose object was to protract the administration in insolvency and delay the creditOrs. In such circumstances it could not be said that the next friend of the minors was guilty of gross negligence in not filing an appeal or that his omission to do so caused the minors the loss of a valuable right. The omission to appeal against a decision adverse to the minor is not negligence on the; part of his next friend or guardian ad litem unless it is established that he had sufficient funds of the minor to meet the expenses of the appeal that the decision was so plainly illegal, erroneous or perverse that no reasonable person could have arrived at ft and that a valuable right of the minor had been lost'' as the result of the adverse decision, If a next friend or guardian ad litem of a minor after conducting or defending a suit to the best of his ability elects to abide by an adverse decision in the belief that an appeal would not secure any material advantage to the minor, he cannot be said to-have acted negligently. Daiva Ammal and Others Vs. Selvaramanuja Nayakar and Others, ; Kota Nagayya Vs. Vanipenta Venkatayya and Another, . In the present case the appeal, even if successful would not have stood in the way of the creditors suing the sons and recovering their debts from the sons'' shares in the family property. For these reasons we hold" that the decree in O. S. 302 of 1931 could not now be set aside and the suit re-opened for trial at the instance of the Plaintiffs.

(8A) It is settled law that a Court may refuse partition to a minor suing through a next friend if, in its judgment, a partition would not be in the minor''s interests.

The Court takes upon itself the task of deciding that which the minor if he were an adult would have done himself, namely, whether it is beneficial or not to become separate." Rangasayi v. Nagara&namma ILR 57 Mad 95 : AIR 19S3 Mad 890.

Till the Court decides that the suit for partition was for the benefit of the minor, there can be no severance, though if it so decides; the severance takes effect from the date of the suit and not merely from the date of the decree. The Court having dismissed O. S. No. 302 of 1931 on the ground that a partition was not beneficial to them, no severance \\ was effected'' between the Plaintiffs who were then minors and"their father. The compromise Ex. A-101 y entered into between the Plaintiffs and their stepbrothers fixing their respective shares in the assets and liabilities of the family was not accepted by the Court and I. A. No. 2688 of 1933 filed for recording the compromise was rejected.

Having examined the proceedings in O. S. No. 22 of 1931, O. S. No. 29 of 1934 and O. S. No. 37 of 1934 filed by the creditors against the insolvent and his sons including the Plaintiffs, we find that in considering the question of limitation raised on behalf of the Plaintiffs it makes no difference whether the Plaintiffs became divided or not as a result of O. S. No. 302 of 1931 or Ex. A-101. At a time when the father and sons were joint, the former filed I. P. No. 6 of 1931. It appears from Ex. A-79 the judgment in O. S. 37 of 1934 that the insolvency petition together with the schedule of creditors was filed by the father on 19th January 1931.

In the schedule of creditors filed with the insolvency petition the father included the debts due to the creditors in the three suits aforesaid. In O. S. No. 22 of 1931 the Plaintiffs were imploded as defeats by order, dated 11th April 1932, within 3 years the insolvency petition acknowledging the debt. O. S. Nos. 29 and 37 of 1934 were filed on 19th January 1934, imp leading the present Plaintiffs as Defendants to those suits. These suits were all filed in time against the Plaintiffs and no valid defence on the ground of bar by limitation was available to their guardian ad-litem in those suits. Indeed, the defence of limitation was raised and rightly overruled in O. S. No. 37 of 1934 (See Ex. A-79).

It is next argued that Ex. A-101 was a partition arrangement between the Plaintiffs and their step-brothers providing for the discharge of binding debts and that that arrangement was binding on the creditors and should have been pleaded as a defence to their suits. Reference was made in dis connection to the decision of the Supreme Court in Pannalal and Another Vs. Mst. Naraini and Others, . Under the Hindu Law the normal rule is that debts binding on the family have to be satisfied or provided for before the coparceners divide the family property. AIR 1936 277 (Privy Council) . In Pannalal and Another Vs. Mst. Naraini and Others, , the Supreme Court, while affirming the liability of the son''s shares for the pre-partition debts of their father, introduced a qualification in these terms:

The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place, (p. 21.9 of SCJ): (at p. 176 of AIR).

If the arrangement made at the time of partition is reasonable and proper an unsecured creditor cannot have any reason to complain. The fact that ha is no party to such arrangement is, in our opinion, immaterial. Of course if the transaction is fraudulent or is not meant to be operative, it could be ignored or set aside; but otherwise it is the duty of the unsecured creditor to be on his guard lest any family property over which he has no charge or lien is diminished for purposes of realisation of his dues.(p. 220 Of SCJ): (at p. 176 of AIR).

In the absence of any such arrangement for. payment of binding debts" at a partition

the debts are to be paid severally by all the sons according to their share of the inheritance.

as observed by the Court relying on a text of Vishnu.. Now Ex. A-101 merely declares the shares of the Plaintiffs and their step brothers in the family properties and their liability for the family debts in proportion to such shares. This is merely effecting a. division in status. It does not say what were the properties to be divided or winch properties were allotted to each sharer or what were the family debts-to be paid or what arrangement was made for their discharge.

Exhibit A-101 merely specifies the fractional shares of'' the brothers in the family properties and liabilities without any allotment of any properties or debts to any of them. It is difficult to regard Ex. A-101 as an ''arrangement'' of the kind referred to by the Supreme Court in Pannalal and Another Vs. Mst. Naraini and Others, . It is further significant that the Plaintiffs do not rely or even refer to this arrangement in their plaint and claim partition on the basis-of a joint Hindu family now existing. It was apparently only, a blind intended to hamper the creditors-and the Official Receiver.

The further contention of the learned advocate for the Appellant was that the decrees in O. S. No. 22 of 1931 and O. S. Nos. 29 and 37 of 1934 were null and void because tire leave of the Insolvency Court u/s 28 (2) of the Provincial Insolvency Act had not been obtained for the filing of these suits. This objection was not raised in the plaint but it has been noticed in the judgment of the Court below. An examination of .the record shows-that leave was in fact obtained for instituting O. S. No. 37 of 1934. Vide Ex. B-7.

It is not clear whether leave to sue was or was not obtained for O. S. No. 29 of 1934. It is conceded by the Respondents that leave to sue was not applied, for or obtained for O. S. 22 of 1931. instituted on 17th, February 1931. The insolvency petition was filed, by the father on 19th January 1931, and he was adjudicated an insolvent on 27th April 1931. The Official Receiver was made a party to O. S. No. 22. of 1931 on 1st September 1931, and the suit was decreed against die present Plaintiffs among others on. 20th December 1933.

The contention of the Appellants is two-fold: (i; that the guardian ad-litem was guilty of gross negligence in not putting forward the want of leave of the insolvency Court as a bar to the maintainability'' of the suit and the decree in O. S. No. 22 of 1931 should be set aside on that ground; and (ii) that even, otherwise the want of leave to sue rendered the decree in Q. S. No. 22 of 1951 null and void.

These points were elaborated by reference to several decided cases. It is now settled law in Madras that a creditor suing for the recovery of a debt contracted by" the father has only one cause of" action which arises equally against the father and his undivided sons on the date when the debt is payable-and the period of limitation is the same and runs-both against the father and his undivided sons from, that date. Mallesam Naidu v. Jugala Panda, ILR.

As observed by Bhashayam Iyengar, J., in the Pull Bench case cited above, the fact that the son''s liability is confined to debts which are not villega or immoral, does not make it a different liability; the son cannot be sued alone during his father''s llife and his pious obligation lasts only so long as the . father''s liability subsists. If the father is adjudged ian insolvent and gets his discharge, his liability for debts provable in insolvency is extinguished and his ''undivided sons would not thereafter be liable there-for. "Fiirayana v. Veerappa, ILR 40 Mad 581 : AIR 1917 Mau 989 (W), Maya Nadan v. Arunachalam, AIR 1926. Mad .1100

Starting from these premises, it was argued that the father was a necessary party to O. S. No. 22 of ''1931 where the creditor sought relief against the interest; of the sons in the joint estate and leave of the "insolvency Court not having been obtained for the suit, the decree was one made without jurisdiction.

''"The law as then understood was that the power of the father to sell the son''s interest vested in the Official Receiver and a creditor who sued the insolvent-father and his undivided sons might in some . Indirect way be regarded as proceeding against the property of the insolvent so as to attract the requirements of leave to sue.

(13A) Sections 28(2) and (7) and 29 of the Provincial Insolvency Act (hereinafter referred to as "the Act run thus: Section 28. (2)-On the making of an order of adjudication, the whole of the property of the insolvent shall vest in the Court or in a receiver as hereinafter provided, and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings liave any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceedings, except with the leave of She Court and on such terms as the Court may impose.

(7) An order of adjudication shall relate back to and take effect from, the date of the presentation of the petition on which it is made. Rule 29. Stay of pending proceedings: Any Court in which a suit or other proceeding is pending against a debtor shall, on proof data an order of adjudication has been made against him under this Act either stay the proceeding, or allow it to continue on such terms as such Court may impose." Leave of the Insolvency Court u/s 28 (2) of the Act is essential to the Institution of a suit or other legal -proceeding of the nature described in the Sub-section. Want of leave before the institution of the suit or proceeding entails its dismissal and cannot the cured by the grant of leave subsequently. The Plaintiffs ignorance of the order of adjudication is court ; material and if the plea of want of leave is ipsused, the suit has to be dismissed. See Subraman- v, Narasimham, 56 Mad LJ 489 : AIR 1929 Mod l83 Davood Mohideen Rowther Vs. Sahabdeen Sahib, and Cuddappa Ghouse Khan Vs. Bala Subba Rowther, ; Katta Venkatannagari Sreenivasayya Vs. Kutagulla Mudda Nagappa by guardian Mr. C.P. Venugopal (Pleader) and Others, .

The mora important contention, of the Appellants is that if a suit is instituted after th| filing of an insolvency petition and before the date of adjudication, the effect of the relation back of the adjudication commences from the time when the insolvency petition was presented and the suit therefore should be deemed to have been commenced after the adjudication. If, as in the present case, the suit is one for recovery of a debt provable in insolvency filed after the presentation of the insolvency petition and before adjudication, it would be unsustainable by reason of the leave of the Court to commence the suit not having been obtained.

Ayya Pillai Vs. Ayyadurai Goundan and Others, : Muluktla Achuta Ramayya Garu Vs. The Official Receiver, , a decision of Beasley, C. J.; and Cornish, J., on which strong reliance is placed, supports this contention ol die Appellants. -The decision of Govinda Menon and Basheer Ahmed Sayced, JJ., in The Official Receiver, East Tanjore Vs. Sait Jessasingh Chathurbhujadas and Another, cited for the Appellants related to a suit instituted before the filing of the insolvency petition itself. Whether the learned Judges were right in equating the position of an interim receiver to that of a receiver in whom the property of the insolvent vested by relying on the rule of relation back is a matter which we need not pause to consider:

In A. Subramania Aiyar Vs. S. Meenakshisundaram Chettiar, , Varadachariar and King, JJ., held that a debt which could have been enforced in a Court of law on the date of the presentation of the insolvency petition but which was barred by limitation on the date of the order of adjudication was a debt provable in insolvency by reason of the relation back of the order of adjudication to the date of the presentation of the petition. Referring to Ayya Pillai Vs. Ayyadurai Goundan and Others, ;: Muluktla Achuta Ramayya Garu Vs. The Official Receiver, , the learned Judges observed that if the matter was reintegrated, they would have hesitated to reach the conclusion arrived therein. The interpretation of S. 28 (2) and (7) in the light of S. 29 of the Act and the effect of the rule of relation back on suits and proceedings instituted after the filing of the insolvency petition and before adjudication was not canvassed in that case.

There are earlier and later decisions faking a view contrary to that taken in Ayya Pillai Vs. Ayyadurai Goundan and Others, : Muluktla Achuta Ramayya Garu Vs. The Official Receiver, . In T. K. Kaliaperumal Naicker and Others Vs. O. S. Ramchandra Ayyar and Others, , Ramesam J., held that leave of the insolvency Court was not required for a suit filed before the order of adjudication and that the fiction of or back had reference to the vesting of property, and not to suits and other proceedings. The learned Judge observed:

The filing of a suit prior to the order of adjudication may be regarded outside the purpose of the Insolvency Act with reference to the provisions of Section 28 (2).

This observation of Ramesam J. was accepted as correct and the decision in Ayya Pillai Vs. Ayyadurai Goundan and Others, ; Muluktla Achuta Ramayya Garu Vs. The Official Receiver, ,,was dissented from by, Venlcatararnana Rao and Pandrang Row, JJ.,a Nagarpur Sambayya Vs. Nagarpur Pedda Subbayya, The actual decision was to the effect that a creditor was entitled u/s 78 (2) of the Act to a deduction only of the period from the date of adjudication to the date of annulment and that the date of adjudication did not relate back to the filing of the insolvency petition. The learned Judges observed:

If a suit can be filed by a creditor without leave before the date of the order of adjudication and the Court before which it is filed has jurisdiction to entertain it and pass a decree thereon it is difficult to understand how an order passed ex post facto by another Court could render such a suit incompetent and the decree passed therein void. The learned Judges (Beasley, C. J. and Cornish J.,) in ILR 58 Mad 1032: All 1935 Mad 817) (Z3), have not given due weight to the word ''thereafter'' in Section 28 (2) and to provisions of S. 29 of the Act which clearly apply to a state of affairs which occurred in the case they were dealing. u/s 29 it was Competent to the Court to pass an appropriate order and it was not necessary to pronounce the suit to be incompetent or the decree void. It seems to us that to apply the doctrine of legation back to a suit instituted before an order of adjudication is against the plain language of, Section 28(2).

These were the only decisions cited before us on this point and we are in respectful agreement with the view taken by Ramesam J., and Venkata-ramana Rao and Pandrang Row, JJ., in the cases above cited. There is also a decision of Panckridge J., in Chandumal v. Satyachurn, 42 Cal WN 34 in support of our conclusion.

In view of this difference of judicial opinion, we might point out the difficulties in the way of accepting the Appellant''s contention. If a suit filed by a creditor after the presentation of an insolvency petition against the debtor is decreed before the making of the order of adjudication, is the validity of the suit and decree dependent on the making or refusing of an order of adjudication subsequently by the insolvency Court? Should a creditor who is aware of pending insolvency petition postpone the filing of a suit expecting an order of adjudication and expose himself to the risk of his debt becoming barred by limitation if an adjudication is refused or is annulled subsequently? Should the creditor jump before he reaches the stile and apply for leave in anticipation of an order of adjudication being made before anybody can say whether it is going to be made or not? It is only when an order of adjudication is made that leave is necessary.

What is to happen if the Court refuses to grant leave" postpones passing orders on the application for leave till the matter of adjudication is decided and eventually refuses an adjudication order and in the meantime the debt gets barred? Till the order of adjudication is made, the Official Receiver cannot be made a party. Why should a. suit lawfully and properly instituted be then out by reason of a ban which was not in existence at its commencement but which is supposed to invalidate the suit from its inception?

There may be some ambiguity in the word "thereafter" as used in Section 28 (2) but having regard j to the explicit reference to "the order of adjudication" to which the word ''thereafter" is related in the same clause and to the anomalous results flowing from a different interpretation it must be held that doctrine of relation back in Section 28 (7) applies to the first part of Section 28 (2) and not to the second part and that a suit instituted after the filing of an insolvency petition and before adjudication does not become incompetent or unsustainable by reason of want of leave of the insolvency Court.

Section 29 of the Act refers to such a suit and the Court in which it is instituted has to act under the provisions of that section, if and when an order of adjudication is made by the Insolvency Court. We would have referred this question to a Full Bench had the decision of the case turned solely upon this point but as there are also other grounds available in support of our decision we. refrain from doing so and express our own preference of the view taken in Nagarpur Sambayya Vs. Nagarpur Pedda Subbayya, .

(17A) Even if leave of the insolvency Court were held to be necessary, does the want of it render the decree in O. S. No. 22 of 1931 wholly void and one passed without jurisdiction? In C. R. Subramania [ C.R. Subramania Aiyar Vs. The Official Receiver and Another, , Spencer and Madhavan Nair JJ., upheld the validity of an execution sale of the debtor''s property held without leave between the date of filing the insolvency petition and the date of adjudication.

In Donepudi Subramanyam Vs. Nune Narasimham and Others, , Wallace and Tiruvenkatacliariar, JJ., expressed the opinion that the fact that the leave of the insolvency Court was not obtained for the institution of a suit by a creditor u/s 16 (2) (b) of the Act of 1907 (corresponding to S. 28 (2) of the present Act) did not render the decree passed therein a nullity. The decree is not liable to be challenged in a subsequent suit on. the ground of want of leave. Here the Subordinate Judge''s Court of Bezwada had jurisdiction to try O. S. No. 22 of 1931.

It had jurisdiction over the parties and the subject-matter and the want of leave did not affect its jurisdiction to entertain or. try the suit, though if the objection had been raised and upheld, the Court would have dismissed the suit. If the objection was overruled the suit would have been decreed. In either case the Court would be acting within its jurisdiction. If the Court acted erroneously in the exercise of its jurisdiction the remedy of the aggrieved party is by way of a direct attack in that very litigation, that is to say, by way of an appeal against the decree. The decree cannot be collaterally impeached by a separate suit or in other proceedings.

The judgment and decree in O. S. No. 22 of 1931 are not: void on their face and cannot be treated as nullities. Indeed Courts have gone to the length of holding that an objection to the maintainability of a suit on the ground of want of leave u/s 28 (2) of the Act should be raised in the first Court and where it has not been so raised, it is not open to the Official Receiver on appeal to contend that the suit should have been dismissed on that ground. Nidamanuri Satyamma Vs. Official Receiver and Another, Malan Devi v. The Amritsar National Bank, AIR 1936 Lah 286 This shows that the objection is not one in relation to the jurisdiction of the Com The grant of leave by the insolvency Court was lot condition precedent to the exercise of its jurisdiction by the Court of the Subordinate Judge of ''.yfeezwada over the suits of the creditors. Its jurisdiction to entertain the suit was conferred by the Code of CPC and the Madras Civil Courts Act. The" suits were properly instituted in the Court of the Subordinate Judge and leave of the. Insolvency Court was not necessary at the time of their insolent . Even after adjudication the Court had the bower to stay or try the suits u/s 29 of the Act. ''The decrees and judgments in the suits of the creditors were good on their face and cannot now be teeth aside for want of leave. The law is thus sum-Vamped jump in Halsbury''s Laws of England (2nd Edition) Volume 13,.page 439:

The absence of a condition necessary to found the jurisdiction to make an order, or give a decision, deprives. the order or decision of any conclusive elect; but it is otherwise where the order is good on its face and the Court adjudicating has jurisdiction to determine the existence or not of the'' condition, and the party denying its existence has neglected his opportunity of raising the objection at the hearing.

The contention that the decrees in O. S. No. ''22 of 1931 and O. S. No. 29 of 1934 are null and ; void as having been passed by a Court without jurisdiction is unsupportable, the objection on the ground of want of leave having been waived at the time of their trial.

If, as the Appellants sought to maintain, they ''had become divided from their father when O. S. No. 302 of 1931 was instituted there was no need for the creditors who sued them thereafter to obtain the leave of the insolvency Court. On such division the Insolvency Court ceases to have any control over the, shares of the sons and the Official Receiver could not " exerci-FC the father''s power of sale of the sous'' shares. Creditors who sue the divided sons for realisation of the preparation debts of the father cannot be said to be seeking a remedy against "the property of the insolvency in respect of the debt" within the meaning of S. 28(2) of the Act. Therefore leave of the Insolvency Court is not necessary for a creditor''s suit against the divided sons of the insolvent debtor, Muroli Mohan Reddi v. Brahmayya, 1942-1. Mad LJ 173 AIR 1942 Mad 527: .

Lastly an objection was raised to the validity of the Court sales under which the Respondents or their predecessors-in-title purchased the shares of the Plaintiffs in execution of the decrees in O. S. No. 22 of 1931 and O. S. Nos. 29 and 37 of 1934 on the ground of want of leave of the Insolvency Court. This objection was not raised in the plaint or in the Court below or even in the grounds of appeal to this Court and we cannot allow it to be urged at the stage pf arguments in appeal and remand the suit for a consideration of the objection.

Considerable stress was laid by the Appellant''s learned advocate on the fact diat the adult stepbrothers of the Plaintiffs who were Defendants to.

Section 37 of 1934 along with the Plaintiffs and who had raised a number of defenses withdrew their defence in consideration of their getting a share of the fruits of the litigation from the Plaintiff in that suit. It is /suggested that the step-brothers of the Plaintiffs on whom they depended for the defence of the suit suddenly forsook them and their guardianadlitem was taken by surprise.

The Plaintiffs were imp leaded as Defendants in that suit and their guardianadlitem should have been prepared with evidence to substantiate their defence or asked for an adjournment to enable him to get ready. There is nothing in the evidence, now adduced to show that the Defendants had a serious-or valid defence to that suit and we cannot set aside the decree in O. S. No. 37. of 1934 on conjectural, grounds.

It is reported that the Appellants and Respondents 10, 13 and 14 have settled their dispute with regard to 4 acres 43 cents in R. S. No. 503-2 and 1 acre 3 cents in R, S. No. 186-2 forming part of item 6 of the plaint A schedule properties. The Appellants gave up their claim against Defendants 39, 49 and 50 (Respondents 10, 13 and 14) as result of the settlement. In other respects the appeal fails and is-dismissed with costs.