K. Dasaradharama Reddy vs Syed Rahimtulla Hussani and Another

Alfred Henry Lionel Leach, C.J.—The rule nisi must be made absolute. The respondent Board has entirely misconceived the law. On the

15th March, 1935, one Rahimtulla Hussani was adjudicated in the Court of the Subordinate Judge of Nellore. On the 28th June, 1935, he filed an

application to the respondent Board for settlement of his debts u/s 4(1) of the Madras Debt Conciliation Act, 1936. The applicant had not

obtained his discharge and is still an insolvent. The petitioner objected to the Board entertaining the application on the ground that the applicant''s

estate had vested in the Official Receiver. The leave of the Insolvency Court had not been obtained for the filing of the petition and the Official

Receiver was not a party to it. Thereupon, the Board directed notice to be issued to the Official Receiver who replied that he could not be made a

party to the application as the applicant had not obtained the consent of the Insolvency Court.

The Board overruled the objection and refused to accept the decision of this Court in Gaddipati Venkayya Vs. Chunduru Sambayya and

Others, , which was in point. In that case Pandrang Row, J., held that an application to a Debt Conciliation Board when the debtor was an

insolvent and the Insolvency Court had not given its consent was in direct contravention of Section 28(2) of the Provincial Insolvency Act. The

applicant happened to be a creditor and the respondent Board considered that that made all the difference. This is an opinion which certainly

cannot be accepted. The position is the same whether the application to the Debt Conciliation Board is made by the insolvent or by a creditor. The

debtor''s estate has become vested in the Official Receiver and the Provincial Insolvency Act requires that it shall be administered by the

Insolvency Court. An insolvency takes away the jurisdiction of the Debt Conciliation Board.

The order of the Board contains other statements which are equally open to objection but it is not necessary to discuss them. It is sufficient to

say that in the circumstances the Board had no jurisdiction to accept the petition and the proceedings must be quashed. The petitioner is entitled to

his costs and we fix the Advocate''s fee at Rs. 50.