MOHAMADU CASSIM v. PERIANAN CHETTY

107-NLR-NLR-V-14-MOHAMADU-CASSIM-v.-PERIANAN-CHETTY.pdf


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Present: LasceUes C J. and Middleton J.
In re the Insolvency of Mohamadu Cassim.MOHAMADU CASSIM v. PERIANAN CHETTY.
June 20,1911
79—D. C. Kandy, 1,571.
Insolvency—Motion by insolvent to expunge debt after the'appointment ofassignee—Practice—Power of Judge to inquire into validity ofjudgment obtained by fraud—Summons—Service of summons onone partner after dissolution of partnership—Judgment obtainedwithout service of summons null and void.
Before the close of the first sitting in insolvency proceedingsone P. tendered proof of a debt. The insolvent did not admit thedebt, but proof was admitted without further inquiry. Subse-quently, after the appointment of assignee, the insolvent movedto have the debt expunged.
Held, the procedure of moving to expunge a debt is not open tothe insolvent, but only to the assignee or to two creditors undersection 110 of Ordinance No. 7 of 1853. The proper course wouldhave been to have inquired into the bankrupt’s objection at thetime when it was made, or, at any rate, before the appointmentof the assignee.
But a practice has grown up in our Courts under which debtaare admitted to proof notwithstanding non-admission, and objectionis allowed to be made subsequently by way of motion.
“ A bankrupt has a right to petition for expunging of a debtproved by a creditor, provided that the admission of the debt wascalculated to affect the surplus or the allowance of the bankrupt.”The power of a Judge to inquire into the validity of a judgment-debt, where there is evidence that the judgment has been obtainedby fraud or collusion, or that there has been some miscarriage ofjustice, is unquestionable.
In an action brought after the dissolution of a co-partnershipagainst the former partner’s nomination, service of summons onone of the defendants is not a good service on the others.
A judgment is null and void, and cannot be executed against aperson who is not served with summons.
rjpHE facts are set out in the judgment.
Bawa, for the appellant.—The Court ought not to have expunged.the debt. The Court will listen to an insolvent only when hecontests proof of a debt. Once the Court has admitted the debt,the insolvent cannot thereafter raise the question by moving theCourt to expunge the debt. Only the assignee or two creditors can
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MohamaduCassim v,PeriananChetty
move the Court to expunge the debt. (Section 110 of OrdinanceNo. 7 of 1853.) The insolvent has no interest in having the debtexpunged. Counsel cited Archbold, p, 194 (11 th ed.) ; In re Andrisl.If the judgment against the insolvent was bad for any reason, theassignee should bring a separate action to impeach that judgment.The judgment is perfectly valid as it stands.
The District Court of Kandy had no power in the insolvencyproceedings to review the validity of the judgment of the DistrictCourt of Colombo obtained by the appellant against the insolvent.
The service of summons on the defendants in the Colombo casewas good. Section 64 of the Civil Procedure Code enacts thatservice on one partner is a good service against the other partners.Counsel cited Davis & Son v. Morris,2 Ex parte Young.*
Allan Drieberg, for the respondent.—The insolvent has a right topetition the Court to expunge a debt. See In re Andris.' Thepractice of our Courts is to allow proof of debts without inquiry inthe first instance, though the debt be not admitted by the insolvent.
The District Court of Kandy has the power to review thejudgment obtained against the insolvent in the Colombo case. Itis open to the District Judge in these insolvency proceedings toinquire if summons were served on the insolvent. Counsel citedWigram v. Cox, Sonsy Buckley & Co.,' In re Flatau,5 Ex parteLennox,6 Boater y. Power/
The service of summons on the insolvent in the Colombo casewas bad, because summons was not served on him personally, andas at the date of the action the partnership was dissolved. Itis only in the case of a continuing partnership that service ofsummons on one partner is a good service on the other.
Bawa> in reply.
Cur. adv. vult.
June 20,1911. Lascelles C.J.—
This is an appeal from an order of the District Judge of Kandy inan insolvency case, on the petition of the insolvent, expunging aclaim of Rs. 5,381.25 and interest. It appears that on February 10,1910, before the close of the first sitting, one Perianan Chettytendered proof of a debt of Rs. 5,381.25. The insolvent did notadmit the debt, but the proof was admitted without further inquiry.On November 16, 1910, after the appointment of the assignee, theinsolvent filed an affidavit, on which Perianan Chetty was noticed toshow cause why his claim should not be expunged. The learnedDistrict Judge, after examining the insolvent, expunged the debt.
* (1900) 4 N. L. R. 372 ; 2 Br. 31.4 (1894) 1 Q. B. D. 795.
2 L, R. 10 Ch. Dii. 436.5 L. R. 22 Q. B. D. 83.
31. R. 19 Ch. Div. 125.6 L. R. 16 Q. B. D. 315.
2 102 h. T. N- S. 451,
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It was proved that the insolvent was a partner with several othersin the firm of P. Adam Saibo & Co., carrying on business in partner-ship at Halgranoya in Uda Pussellawa ; that the partnership wasdissolved as from October 2, 1904, notice of the dissolution beingadvertised in the local press ; that after the dissolution themanaging partner, Abdul Rahiman Saibo, continued the business inhis own name under the style Ena Abdul Rahiman Saibo & Co. ;that in D. C. Colombo case No. 27,499 the insolvent with nine otherdefendants were sued nominatim, and decree passed against themin October, 1908 ; and that the summons and copy of the decreenisi was not served on the respondent or on any other of thedefendants than the first defendant. In these circumstances,the insolvent contended that the decree tendered in proof of thedebt was not binding on him.
Before dealing with the principal question involved, it is necessaryto consider several minor objections advanced by the appellant.It was argued that the procedure adopted in this case is faulty,inasmuch as the procedure of moving to expunge a debt is not opento the insolvent, but only to the assignee or to two' creditors undersection 110 of Ordinance No. 7 of 1853. I think that this objection,so far as it extends, is well founded, and that the proper coursewould have been to have inquired into the bankrupt’s objectionat the time when it was made, or, at any rate, before theappointment of the assignee. This appears to have been thepractice under the corresponding English Act. {Archbold; 11 th ed.,p. 194).
But this technical objection is not necessarily fatal to the orderunder appeal. Mr. Drieberg stated—and his statement was notdisputed—that a practice has grown up in our Courts under whichdebts are admitted to proof notwithstanding non-admissions,and objection is allowed to be made subsequently by way ofmotion. The course taken by the District Judge in In re Andris'points to the existence of some such practice. It would, in myopinion, be inequitable to deprive the insolvent on account of thisirregularity, for which the insolvent was probably not responsible,of the opportunity of raising any objection which the law allowshim to the proof of this debt.
The conditions under which an insolvent may object to a claimare discussed in In re Andris, where the Court adopted the rulingin Ex parte Pitchforth2 that the bankrupt had a right to petition forthe expunging of a debt proved by a creditor, provided that theadmission of the debt was calculated to affect the surplus or theallowance of the bankrupt. There is hardly room for any doubt asto the insolvent’s interest in objecting to this claim, as, besidesthe petitioning creditor’s debt of Rs. 577, no other claim than that
now in dispute has been preferred.
1 (1900) 4 N. &. R. 37?- .
June 20,1911
Lasceli.es
C.J.
MokamaduCassim v.PeriananOhetty
2 3 Deacon's Reports 487,
June 20,1911
Lasobx&bs
C.J.
Mohamadu .Cassvrn v.PeriananChetty
( 388 )
It was also contended that it was not competent for the DistrictJudge of Kandy, in an insolvency case, to review a decree of theDistrict Court of Colombo. This objection seems to rest on amisconception. There is no question of reviewing or setting asidea decree. The insolvent’s contention is not that the decree iserroneous, but that it is not binding upon him, because he was notserved with summons in the action.
A judgment is null and void, and cannot be executed against aperson who is not served with summons (Wigram v. Cox, Sons,Buckley & Co.1). Further, the power of a Judge to inquire intothe validity of a judgment debt, where there is evidence that thejudgment has been obtained by fraud or collusion, or that there hasbeen some miscarriage of justice, is unquestionable. {In re Flatau?Ex parte Lennox? Boater v. Power?)
The substantial point for consideration is the ruling of the DistrictJudge that the decree in the Colombo case does not bind theinsolvent. The question involved is whether, in an action broughtafter the dissolution, of a co-partnership against the former partnersnominatim, service on one of the defendants is. a good service onthe others. The question turns upon the construction of section64 of the Civil Procedure Code, the material words of which are asfollows : “ And in case of an action against partners relative to a
partnership transactioneach partner is an agent so empowered
(/.e., empowered to accept service of summons) of each other partner,as is also the person, if any, not being a partner who has the manage-ment of the business of the partnership at the principal place ofbusiness within the local limits of the Court’s ordinary jurisdiction.”
A similar question was discussed in the English Courts in Ex parteYoung? and in Davis & Son v. Morris? 9 with reference to the con-'struction of Order XVT., r. 10, which .provided that partners mightbe used in the name of their firm. In Ex parte Young the Court wasdivided in opinion, and the question was left open whether the ruleapplied to a partnership dissolved before the issue of the writ. InDavis & Son v. Morris it was held that the rule in question was notlimited to the case of partnerships carrying on business at the dateof the writ.
But Order XVI., r. 10, on the construction of which these decisionsturned, is so essentially different from section 64 of the Code inscope and expression that these decisions have little direct bearingupon the question under consideration. The question primarilyturns upon the true construction of section 64. The section deals,in the first place, with specially appointed agents and with proctorsholding warrants of attorney empowered to accept service ; it thengoes on to deal with actions against partners, and declares that each
1 (1S94) 1 Q. B. D. 795.
* L. R. 22 Q. B. D. 83.
3£. R.6Q. B, D. 315.
J102 L. T. Ar. S. 451.
L. R. 19 Ch. Di'v. 125.•£,' R. lOCiuDiv. 430.
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of the partners is an agent of each other partner “ so empowered,”that is, empowered in the same way as the agents referred to aboveto receive summons on behalf of their principals. The section thusturns upon the principle of agency. One partner is declared to bethe agent of the other for a particular purpose, so that service onthe one is service on the others, in the same way as service on anagent appointed under section 30 is a good service on the principal,and service on a duly authorized proctor binds the client. In thecase of the specially-appointed agent or the proctor, it could hardlybe disputed that the power to accept summons on behalf of theprincipal or client determines as soon as the relationship,of principaland agent or proctor and client comes to an end. In the same wayI think the power of one partner to receive service on behalf of hisco-partners must be held, in the absence of express provision to thecontrary, to determine on the dissolution of the partnership.
In my opinion the District Judge is right in holding that theinsolvent was not served with summons in the Colombo case, andthat the decree is therefore not binding on him. It is worthy ofnotice that the ruling in Davis & Son v. Morris does not representthe practice now in force in England. The rule now in force (Order48a, r. 3) provides that, in the case of a co-partnership which hasbeen dissolved to the knowledge of the plaintiff before the commence-ment of the action, the writ of summons shall be served upon anyperson within the jurisdiction sought to be made liable. This rulehas now been adopted in India as Order XXX., r. 3. If we had beenobliged to support the appellant’s contention and to hold that theinsolvent was bound by the Colombo decree, the necessity for anamendment on the lines of the English rule would have been im-perative, for it would have been an intolerable injustice that therespondent, who lives at Halgranoya, a great distance from Colombo,should be held to be bound by a judgment given at Colombo, of whichhe' had no notice, the summons having been served on a person whowas his co-partner in a partnership which was dissolved as longago as in 1904.
I think that the order appealed from is correct, but the order doesnot preclude the respondent from proving his debt alieunde if he isin a position to do so.
June 20,1911
Lascelles
C.J.
MohamaduCassim v.PeriananChetty
Middleton J.—I entirely concur.
Appeal dismissed.