Raja Pande v. Sheopujan Pande

Iqbal Ahmad, C.J:— This appeal is directed against an order of remand passed by the District Judge of Ghazipur in an insolvency case and arises under the following circumstances. On the 5th of July, 1937, Sheopujan Pande respondent filed an application in the court of the Civil Judge of Ballia for the adjudication of Raja Pande, appellant as insolvent. In his application. Sheopujan alleged that on the 8th of March, 1937, Raja Pande had fraudulently transferred almost air his pro perties with intent to defeat or delay his creditors and had, thus, committed, an act of insolvency within the meaning of section 6 of the Provincial Insolvency Act (V of 1920).

Raja Pande contested the application of Sheopujan Pande inter alia on the ground that “the petitioner's application has been made after the expiry of three months from the date of the execution of the sale-deed, that is the alleged act of insolvency, and is not entertainable according to law.” This contention of Raja Pande was based on sub-clause (c) of section 9(1) of the Provincial Insolvency Act which runs as follows: “A creditor shall not be entitled to present an insolvency petition against a debtor unless—(c) the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition.”

The rejoinder of Sheopujan to this contention was that, as the civil courts were closed for the long vacation from the 4th of June to the 4th of July, 1937, and as the period of three months prescribed by section 9(1)(c) expired during the long vacation, the petition was within time, presented as it was on the day that the court re-opened after the long vacation. Sheopujan in support of tins assertion placed reliance on section 4 of the Limitation Act which provides: “Where the period of limitation prescribed for any suit, appeal or application expired on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day that the court re-opens.”

The learned Additional Civil Judge of Ballia relying on the Full Bench decision of the Madras High Court in Chenchuramana v. Arunachalam(1) held that the application was not maintainble and, accordingly, dismissed the same. It was held in that case that the period of three months fixed in section 9(1)(c) of the Provincial Insolvency Act is not a period of limitation but is a condition to an adjudication, and accordingly an act of insolvency which has occurred more than three months prior to the presentation of the petition is not available: as a ground of adjudication, even though on the day on which the three months expired the court was closed, and the petition for insolvency was filed on the date that the court re-opened. This case is an authority for the proposition that neither section 4 of the Limitation Act nor section 10 of the General Clauses Act (X of 1897) apply to a petition for insolvency filed under Provincial Insolvency Act. To the same effect are the decision in Lakshmayya v. Subba Rao(2) and Muradan Sardar v. Secretary of State for India(3). section 10 of the General Clauses Act enacts:

“10. (1) Where, by any (Central Act) or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period, then, if the court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open: Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877, applies. (2). This section applies also to all (Central Acts) and Regulations made on or after the fourteenth day of January, 1887.”

Sheopujan being dissatisfied with the decision of the Civil Judge appealed to the District Judge and the District Judge, relying on Ma Than May v. The Bailiff of the Township Court of Kyaunggon held that section 4 of the Limitation Act does apply to petitions made under section 9(1)(c) of the Provincial Insolvency Act and that the application of Sheopujan was within time. He accordingly set aside the decision of the Additional Civil Judge and remanded the case for decision according to law. It was held in the Rangoon case that, by reason of the express terms of section 29(2)(a) of the Limitation Act, section 4 of the Limitation Act applies to applications made under the Provincial Insolvency Act. section 29(2) of the Limitation Act inter alia provides that for the purpose of determining any period of limitation prescribed for any suit or appeal or application by any special or local law, (a) the provisions contained in section 4, sections 9 to 18, and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local laws.

The decision of the Rangoon High Court was based on a Full Bench decision of this Court in Dropadi v. Hira Lal. The question before the Full Bench in Dropadi's case was whether a person filing an appeal under section 46 of the then Provincial Insolvency Act (III of 1907) was entitled to the benefit of section 12 of the Limitation Act? Section 12 lays down inter alia that in computing the period of limitation prescribed for any appeal the time requisite for obtaining a copy of the judgment and decree shall be excluded. There was no provision in the Insolvency Act of 1907 for the exclusion of such time. The Full Bench, however, held that the Provincial Insolvency Act is a special law within the meaning of section 29 of the Indian Limitation Act, and, inasmuch as it is not in itself a complete code, there is nothing to prevent the application thereto of the general provisions of the Indian Limitation Act and that those general provisions do not “affect or alter” the period prescribed by a special law, but only indicate the manner in which that period is to be computed.

It would appear from what has been stated above that there is divergence of judicial opinion on the question as to whether the provisions of the sections of the Limitation Act enumerated in section 29(2)(a) of that Act, and in particular the provisions of section 4 of that Act, are applicable to petitions for insolvency filed under the Provincial Insolvency Act. I confess that much can be said in favour of either view, but, after giving the matter my best consideration, I have come to the conclusion that the sections of the Limitation Act specified in section 29(2)(a) of that Act have no application to petitions under the Insolvency Act.

The question that I have to decide did not and could not arise for consideration in Dropadi's case for the simple reason that in the year 1912, when that case was decided, clause (2) of section 29 in its present form did not exist. This clause was introduced for the first time by the Indian Limitation (Amendment) Act (X of 1922). In 1912 the provision in section 29 was that “nothing in this Act shall affect or alter any period of limitation specially prescribed for any suit, appeal or application by any special or local law now or hereafter in force in British India.” There was then conflict of judicial opinion on the question whether the application of the general provisions of the Limitation Act to special or local statutes did or did not “affect or alter” the period of limitation prescribed by such statutes, and the question was answered in the negative in Dropadi's case. In view of the amendment to section 29 by Act X of 1922 that question can no longer arise.

The decision of the question under consideration must, in view of the provisions of sub-clause (2) of section 29, depend on the answer to the questions Whether, within the meaning of that clause:—(1) the Provincial Insolvency Act is a special or local law; (2) a petition for insolvency is a “suit, appeal or application” and (3) the provisions contained in section 4, sections 9 to 18 and section 22 are to any extent not expressly excluded by the Provicial Insolvency Act.

I respectfully adopt the decision in Dropadi's case that the Provincial Insolvency Act is a “special law.” The Act affects the status of a citizen, deals with a special branch of law and creates special jurisdiction. I am, however, of the opinion that a petition for insolvency is not a “suit, appeal or application” within the meaning of clause (2) of section 29. No argument is needed to demonstrate that a petition, for insolvency is not a “suit” or an “appeal”. Both the words “suit” and “appeal” are technical expressions and have been used in clause (2) of section 29 in contradistinction to the word “application”. A suit, generally speaking, starts with a plaint and not with an application, and a study of the Provincial Insolvency Act will show that the legislature has not used the word “suit” in relation to a “petition” or “application” under, that Act. Similarly the word “appeal” connotes the idea of a motion by a party for the reversal or modification of a decision by which he is aggrieved. It is needless to observe that a petition for insolvency is not motion for redress being granted against a certain decision. It follows that a petition for insolvency is neither a “suit” nor an “appeal” within the meaning of clause (2) of section 29 of the Limitation Act. The question, however, remains whether a petition for insolvency is or is not an “application” within the meaning of that clause.

A perusal of the various sections of the Provincial Insolvency Act discloses that the legislature has, in that Act, used the expressions “petition” and “application” for different purposes and with different legal significations. The word “petition” has, for instance, been used in section 6(f) and in all the sections from section 8 to section 28 of the Act. The word “petition” also finds a place in sections 52, 53 and 54 of the Act. The words “application” or “apply”, on the other hand, have been used in sections 10(2), 31, 35, 41, 52, 68 and other sections of the Act. In ordinary parlance the words “petition” and “application”, no doubt, connote the same meaning, but when one finds that in a statute the legislature has, in different sections, used the one or the other word, the conclusion is irresistible that the legislature intended to use the one word in a sense different from the other.

Sections 6 to 28 are under the sub-heading “Acts of Insolvency”, “Petition” or “Order of adjudication”, and sections 52 to 54 are preceded by the sub-heading “Effect of insolvency on antecedent transactions”. The words “apply” or “application” have, on the other hand, been used in relation to applications for protection order, for order of discharge, for annulment of adjudication, for reversal of the decisions of a receiver and for other kindred matters. I conclude from this that the legislature has used the word “petition” in the Act with reference to matters relating to acts of insolvency, and the word “application” has been used with respect to motions other than those that have direct reference to acts of insolvency. It follows that petition for insolvency either under section 9 or section 13 of the Act is not an “application”.

If I am right in the above conclusions, section 29(2) of the Limitation Act, which makes provision for the determination of the periods of limitation prescribed “for any suit, appeal or application by special or local law”, can obviously have no application to petitions under the Provincial Insolvency Act.

There is yet another reason that leads me to hold that the section enumerated in section 29(2) of the Limitation Act cannot apply to petitions under the Insolvency Act. By section 46 of the Provincial Insolvency Act (III of 1907), which was in force when Dropadi's case was decided, provision was made for appeals against orders made in the exercise of insolvency jurisdiction, and by clause (4) of that section it was provided that “The periods of limitation for appeals to the district court and to the High Court under this section shall be thirty days and ninety days respectively.” There was, however, no provision in that Act, similar to section 12 of the Limitation Act, as to the exclusion of time taken in obtaining certified copy of the judgment or of the formal order of the Insolvency judge, in computing the period of limitation for appeals prescribed by that Act. This gave rise to difference of judicial opinion that necessitated the reference of Dropadi's case to a Full Bench and the Full Bench held that the general provisions of the Limitation Act, including the provision of section 12 of that Act, were applicable to appeals under Insolvency Act of 1907. While replacing the Provincial Insolvency Act of 1907 by the present Provincial Insolvency Act (V of 1920) the legislature, for the first time, introduced section 78—a section which did not find a place in the Act of 1907. Sub-clause (1) of section 78 of the present Act (V of 1920) enacts that “The provisions of sections 5 and 12 of the Limitation Act, 1908, shall apply to appeals and applications under this Act, and for the purpose of the said section 12, a decision under section 4 shall be deemed to be a decree.”

It is permissible to assume that the legislature was cognizant of the conflict of judicial opinion referred to above and, it appears to me, that it introduced section 78 with a view to set that conflict at rest. The main reason assigned in Dropadi's case for holding that the general provisions of the Limitation Act applied to proceedings under the Provincial Insolvency Act was that the latter Act was “not in itself a complete code”, and, as such, recourse could be had to the general provisions of the Limitation Act for the computation of the periods of limitation prescribed by the Provincial Insolvency Act. By recasting section 78 in the new Act the legislature, to my mind, intended to make good the omission in the Act pointed out in Dropadi's case, and to make that Act a self-contained Act or in other words “a complete Code.”

That the Act is self-contained so far as the procedure to be followed in proceedings under the Act is concerned admits of no doubt. By section 18 “the procedure laid down in the Code of Civil Procedure, 1908, with respect to the admission of plaints”, has been made applicable to insolvency petitions. The procedure to be followed at the hearing of such petitions is set out in paragraph 24 of the Act. Similarly the Act contains detailed provisions as to the procedure to be adopted after the order of adjudication, or in applications for annulment of adjudication or order of discharge. Part III of the Act also contains detailed provisions for the procedure to be followed in the administration of the insolvent's property. By section 75 in part VI provision is made for appeals. It is true that the procedure to be followed at the hearings of the appeals is not prescribed by the Act but, by section 79 of the Act, the High Courts are empowered to make rules “for carrying into effect the provisions of” the Act. Under this rule-making powers the High Courts can, therefore, prescribe the procedure for the admission and hearing of appeals. It follows that in the matter of procedure the Act is a self-contained Act.

Leaving aside, for the present, the controversial question whether the period of three months prescribed by section 9(1)(c) of the Act is a period of limitation or a “condition” to an adjudication, there can be no room for doubt that the Act has prescribed periods of limitation for applications and appeals, vide for instance, sections 68 and 75. Then by clauses (1) and (2) of section 78 the Act has made the provisions of sections 5 and 12 of the Limitation Act applicable to appeals and applications under the Act, and has also made provision for exclusion of time in the computation of the periods of limitation prescribed for any suit or application for the execution of a decree in certain cases. It is, therefore, manifest that, unlike any other “special or local law”, the Provincial Insolvency Act does not stop short at merely prescribing periods of limitation, but also makes provisions for the computation of such periods and for exclusion of certain time in such computations. This, I feel, is a strong indication of the fact that the legislature intended to make the Act a self-contained Act in the matter of “limitation” for proceedings contemplated by the Act. If the legislature had intended that, apart from sections 5 and 12 of the Limitation Act, other sections of that Act should apply to proceedings under the Provincial Insolvency Act, one would have expected the legislature to enumerate those sections of the Limitation Act also in section 78. When one finds that the legislature, in a particular statute, has made provisions about the applicability of certain sections of the Limitation Act to proceedings under that statute, the conclusion is irresistible that the legislature intended only the enumerated sections and no other sections of that Act to apply to proceedings under that statute. It, therefore, appears to me that the Provincial Insolvency Act is a self-contained Act in the matter of “limitation” with respect to proceedings contemplated by the Act. It follows that the general provisions of the Limitation Act, other than those specified in the Provincial Insolvency Act, cannon be appealed to for determining the periods of limitation as regards proceedings under the latter Act.

I have already given my reasons for holding that the provisions of the Limitation Act have no reference to “petitions”, and, as such, those provisions cannot apply to petitions under the Insolvency Act. There was also, to my mind, very good reason for the legislature to exclude the application of the sections enumerated in section 29(2) of the Limitation Act (except section 12) to appeals and applications, under the Insolvency Act.

The sections referred to in section 29(2)(a) are section 4, sections 9 to 18 and section 22. I shall presently show that section 4, which for all practical purposes is a reproduction of section 10 of the General Clauses Act, was not made applicable to the Insolvency Act as section 10 of the General Clauses Act applies to that Act. Section 9 is confined in its operation to suits and no suits are contemplated by the Insolvency Act, and, as such, that section could not be made applicable to the Insolvency Act. Similarly sections 10, 11, 13, 14(1), 16 and 22 of the Limitation Act are applicable only to suits, and, as such, could not be made applicable to proceedings under the Provincial Insolvency Act. Again section 15 of the Limitation Act makes provision for computation of period of limitation prescribed for “any suit or application for the execution of a decree” and, as no suit or application for execution of a decree is contemplated by the Provincial Insolvency Act, that section could not be made applicable to proceedings under the latter Act. Section 12 of the Limitation Act has been, as already pointed out, made applicable to appeals and applications under the Provincial Insolvency Act.

The only sections out of the sections enumerated in section 29(2)(a) that are thus left are 14(2), 17 and 18. Out of these sections section 17 deals with the effect of death of a person who, if living, would have a right to institute a suit or make an application or against whom, if he were living, a right to institute a suit or make an application would have accrued. This section by any stretch of imagination cannot be applied to proceedings under the Provincial Insolvency Act. We are thus left only with section 14(2) and section 18.

Section 14(2) enacts that “In computing the period of limitation prescribed for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding …… against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction, or other cause of a like nature is unable to entertain it.” There was, in my judgment, very good reason for the legislature not to apply this provision to applications under the Insolvency Act. In the first place the Insolvency Act, as already observed, creates a special jurisdiction, and, as such, no applicant could be expected to entertain a bona fide belief that a court other than the insolvency court could grant reliefs of the nature contemplated by the Insolvency Act. There could, therefore, be no question of any applicant prosecuting with due diligence another civil proceeding in a court other than the insolvency court with respect to a relief which the insolvency court alone could grant on an application. In the second place the policy underlying the Insolvency Act is that the proceedings in bankruptcy should be brief and swift and the stogma of bankruptcy should be removed from the insolvent as soon as, possible. This object would have been frustrated by making the provisions of section 14(2) of the Limitation Act applicable to applications under the Provincial Insolvency Act.

There remains section 18 which provides about the computation of the periods of limitation when a person “having a right to institute a suit or make an application has, by means of fraud, been kept from the knowledge of such right or of the title on which it is founded, or where any document necessary to establish such right has been fraudulently concealed from him”. This section, so far as it deals with suits, could obviously not apply to the Provincial Insolvency Act, and, there were, in my opinion, very good reasons for excluding its applicability to applications under that Act. The applications contemplated by the Insolvency Act are applications consequent on and not antecedent to the making of an order of adjudication. An order of adjudication can be made only after due notice to all concerned has been given under section 19 of the Act. On the passing of an order of adjudication, the right, to make an application under the Act must, therefore, be presumed to have come to the knowledge of the person interested in making an application under the Insolvency Act, and there could be no question of his being kept from the knowledge of such right by the exercise of fraud.

The above analysis would demonstrate that out of sections 9 to 18 and section 22 of the Limitation Act, the only section that could apparently be made applicable to the Insolvency Act was section 12 and this the legislature did by enacting section 78. The utmost that can be urged against this conclusion is that, by some farfetched reasoning, sections 14(2) and 18 could be made applicable to applications under the Insolvency Act. The short answer to this contention, in my opinion, is that, if these sections could be made applicable, the legislature instead of specifying only two sections of the Limitation Act in section 78 of the Provincial Insolvency Act would also have specified these sections in section 78.

For the reasons given above I have no hesitation in holding that the Provincial Insolency Act is a self-contained Act and section 29(2) of the. Limitation Act has no application to that Act. In arriving at this conclusion I have not overlooked the fact that section 29(2) was enacted in 1922, i.e, two years after the present Provincial Insolvency Act was passed; nor have I overlooked the phrase “expressly excluded” in section 29(2)(a). I am aware of the decisions in Sati Prasad Garga v. Gobinda Chandra Shee and Rewachand Fatehchand v. Karachi Municipality, in which it has been held that the sections enumerated in section 29(2) cannot be held to be “expressly excluded” within the meaning of that section, unless specific reference is made in the special or local law to each section and it is provided that they shall not apply to that particular special or local law. With all respect I am not prepared to go as far as that. The fact, that the legislature thought fife to make a special or local law a self-contained Act in the matter of limitation, is proof positive of its intention to forbid recourse to the Limitation Act for the ascertainment of the periods of limitation prescribed for proceedings under that special or local law. Again if the very phraseology of most of the sections specified in section 29(2) makes those sections wholly inapplicable to a particular special or local law, it would be verging on absurdity to attempt to apply those sections to that special or local law. I would, therefore, hold that if a special or local law is a complete code in the matter of “limitation” or if the phraseology of the sections enumerated in section 29(2) of the Limitation Act makes those sections inapplicable to proceedings under a special or local law, the application of those sections to the special or local law must be deemed to have been expressly excluded by the legislature.

I, however, consider that section 10 of the General Clauses Act applies to proceedings under the Provincial Insolvency Act. That section has been quoted above, and it has been pointed out that its practical effect is the same as that of section 4 of the Limitation Act. It is well known that the Provincial Insolvency Act of 1920 was modelled on the lines of the English Bankruptcy Act of 1914 and, indeed, some sections of the Indian Act have been copied verbatim from the English Act. In the English Act there exists a provision similar to section 10 of the General Clauses Act, vide section 145 of the Bankruptcy Act. The legislature did not reproduce section 145 of the English Act in the Provincial Insolvency Act for the simple reason that the General Clauses Act governs the Provincial Insolvency Act, and, as such, the provisions of section 10 of the General Clauses Act apply to proceedings under the Provincial Insolvency Act. It would be noted that section 10 does not speak of the “period of limitation” and applies to “any act or proceeding” which is directed or allowed to be done by any Central Act or Regulation. That the presentation of an insolvency petition under section 9(1)(c) of the. Provincial Insolvency Act is an “act or proceeding” within the meaning of section 10 admits of no doubt. I am therefore, clear that, in view of the provisions of section 10, the petition presented by Sheopujan on the date that the court re-opened was within time.

Before concluding this judgment I must deal with the question whether or not the period of three months referred to in section 9(1)(c) of the Provincial Insolvency Act is a period of limitation. To my mind it is. A period of limitation” is, I consider, synonymous with a “time limit” for proceedings in a court of law. The period of three months in sub-clause (c) of section 9(1) does impose a limit of time about the presentation of an insolvency petition and is, therefore, a “period of limitation”. A period of limitation is in one sense a condition precedent to the enforcing of rights and remedies in a court of law. It is in this sense that one may call the period of three months prescribed for the presentation of insolvency petitions as a condition governing such petitions. Nevertheless it does not cease to be a period of limitation. But, as already indicated, whether it is or it is not a period of limitation, section 10 of the General Clauses Act must apply to petitions for insolvency.

For the reasons given above I hold that the order of remand passed by the learned District Judge is perfectly correct and, accordingly, I would dismiss this appeal with costs.

Dar, J.:— This is an appeal against an order of the District Judge of Ghazipur, dated 25th February, 1938, by which he reversed an order of the Additional Civil Judge of Ballia, dated 5th October, 1937, whereby a creditor's application for adjudication of an insolvent was dismissed.

On 8th March, 1937, Raja Pande, a resident of village Rampur in Ballia district, executed a sale deed of his grove and of his fixed rate holdings situated in certain villages in Ballia district in favour of his two cousins, Ram Tapesa Pande and Ram Iqbal Pande, for an ostensible consideration of Rs. 2,488. On 4th June, 1937, the insolvency court at Ballia was closed for summer vacation and it re-opened on 4th July, 1937. On the re-opening of the court on 4th July, 1937, Sheopujan Pande, another resident of village Rampur, presented a petition in the court of the Insolvency Judge of Ballia under section 13(2) of the Provincial Insolvency Act (V of 1920) against Raja Pande and Ram Tapesa Pande and Ram Iqbal Pande, the said transferor and transferees. In this petition it was alleged that Raja Pande, the opposite party No. 1, owed a debt for Rs. 1,012-4-0 to the petitioner Sheopujan Pande, that in order to defeat this debt and his other creditors Raja Pande had made a sham and fraudulant transfer without any consideration in favour of his two relations, Ram Tapesa Pande and Ram Iqbal Pande, the opposite party Nos. 2 and 3, that the said transfer was void and unenforceable and was not binding upon the petitioner and other creditors of the opposite party No. 1 and that the said transfer was an act of insolvency and the petitioner prayed that Raja Pande, the opposite party No. 1, “be adjudged insolvent”. This petition was opposed both, by Raja Pande as also by Ram Tapesa Pande and Ram Iqbal Pande and one of their pleas in defence was that the petition made by Sheopujan Pande was made three months after the alleged act of insolvency and consequently under section 9(c) of the Provincial Insolvency Act the petition was incompetent. The Insolvency Judge considered this objection as a preliminary issue and holding that inasmuch as the period of three months from the act of insolvency expired during the summer vacation the petition for adjudication was filed beyond three months of the act of insolvency and was consequently incompetent, dismissed the petition with costs. On appeal the District Judge of Ghazipur came to the conclusion that inasmuch as the period of three months from, the act of insolvency expired during the summer vacation the petitioner was entitled to present his petition on the next sitting of the court which he did and consequently the petition must be taken in law to have been made within three months of the act of insolvency and was properly made. On this finding he set aside the order of the Insolvency Judge and remanded the case for disposal according to law. Against this order Raja Pande has made this appeal and the only question for my consideration in this case is that in a creditor's petition of insolvency if the period of three months from the act of insolvency expires on a day when the court is not sitting, can the petition be validly presented on the next day when the court is sitting?

The law of England as enacted in Bankruptcy Act, 1914, with amendments up to date contains similar provisions as are to be found in the Indian statute about the right of a creditor to move a petition of insolvency and to avoid fraudulent transfers or transfers which give preference to one creditor. Sections 9 and 54 of the Provincial Insolvency Act (V of 1920) have been modelled on sections 4 and 44 of the Bankruptcy Act, 1914, and their language is substantially the same in regard to the matter which I am considering. In the English statute as also under the Indian Act, it is one of the conditions of a creditor's petition that it should be made within three months of the act of insolvency and under the English statute as also under the Indian Act a transfer by way of preference to a creditor shall be declared void if the transferor is adjudged insolvent on a petition presented with three months after the date of the transfer. By section 145 the English statute further provides as follows:

“145. (1) Where by this Act any limited time from or after any date or event is appointed or allowed for the doing of any act or the taking of any proceeding, then in the computation of that limited time the same shall be taken as exclusive of the day of that date or of the happening of that event, and as commencing at the beginning of the next following day; and the act or proceeding shall be done or taken at latest on the last day of that limited time as so computed, unless the last day is a Sunday, Christmas Day, Good Friday, or Monday or Tuesday in Easter week, or a day appointed for public fast, humiliation, or thanks-giving, or a day on which the court does not sit, in which case any act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards which is not one of the days in this section specified. (2) Where by this Act any act or proceeding is directed to be done or taken on a certain day, then, if that day happens to be one of the days in this section specified, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards which is not one of the days in this section specified.”

It is, therefore, manifest that according to law of England if the period of three months of an act of insolvency or of a transfer by way of fraudulent preference of a creditor expires on a day when the court is not sitting on account of vacation the petition can be made and transfer can be avoided on the next day when the court is sitting and the period of three months shall be taken to expire not on the day when the court is closed but it shall be deemed in law to expire on the next day when the court is sitting.

The Provincial Insolvency Act (V of 1920) contains in sections 9 and 54 corresponding provisions to sections 4 and 44 of the English Bankruptcy Act; in other words, they require a petition to be presented and a transfer by way of fraudulent preference to be avoided within three months of the act of insolvency or of the act of transfer. But it contains no provision corresponding to section 145 of the Bankruptcy Act which enjoins that if time expires on a holiday it must be deemed to expire on the next working day. But we have two provisions in our statute which practically serve the same purpose. section 4 of the Indian Limitation Act (IX of 1908) is as follows:—“Where the period of limitation prescribed for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may he instituted, preferred or made on the day that the court re-opens.” section 10 of the General Clauses Act (X of 1897) is as follows:

“10. (1) Where, by any Act of the Governor General in Council or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period, then, if the court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open: Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877, applies. (2). This section applies also to all Acts of the Governor General in Council and Regulations made on or after the fourteenth day of January, 1887.”

The main problem in the case is whether to a creditor's petition presented under section 13(2) read with sections 6, 7 and 9 of the Provincial Insolvency Act the said provisions of the Indian Limitation Act and of the General Clauses Act, one or the other, can be applied. Prior to the year 1920 on the wording of the Provincial Insolvency Act (III of 1907) and on the wording of the Indian Limitation Act (IX of 1908), as they stood enacted in those days, there existed a great deal of controversy and opposite views were held on the question whether general sections of the Limitation Act applied to the provisions of the Provincial Insolvency Act. By the enactment of a new Provincial Insolvency Act (No. V of 1920) which is now in force and by the amendment in the year 1922 of the Indian Limitation Act (V of 1908) a good deal of this controversy has now been set at rest and good deal of case law which had grown round the question whether the Provincial Insolvency Act was a self-contained code or not and whether the application of the provisions of the Limitation Act affected the periods of limitation prescribed by the Provincial Insolvency Act or only furnished a mode of computation of time has ceased to be of any value. There is now a provision in the Provincial Insolvency Act, namely, section 78 which is as follows and which provides for the application of two specific sections of the Limitation Act to the Provincial Insolvency Act, namely, sections 5 and 12, and there is a provision in the Limitation Act, namely, section 29, which is as follows and which provides for the application of certain sections of the Limitation Act to special laws.

“S. 78. (1) The provisions of sections 5 and 12 of the Indian Limitation Act, 1908, shall apply to appeals and applications under this Act, and for the purpose of the said section 12, a decision under section 4 shall be deemed to be a decree … S. 29 … (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefor by the first schedule, the provisions of section 3 shall apply, as if such period were prescribed therefor in that schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law—(a) the provisions contained in section 4, sections 9 to 18, and section 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law; and (b) the remaining provisions of this Act shall not apply….”

It will be observed that by the Provincial Insolvency Act of 1920 which is the earlier Act, two specific sections of the Indian Limitation Act, namely, sections 5 and 12, were made applicable to appeals and applications under the Provincial Insolvency Act and one matter of controversy which has arisen now is whether applications include petitions for adjudication of insolvency or whether applications are only confined to those applications which are made during the pendency of the petition of insolvency. The Madras High Court in Gangee Premjee and Company v. Firm Colombo has expressed the view that the word “application” in section 78 is in contradistinction with the word “petition” as used in the Provincial Insolvency Act and sections 5 and 12 do not apply to petitions for adjudication of insolvency, but only apply to other applications which are made after proceedings have originated by a petition of insolvency. Apart from this controversy it is generally agreed that sections 5 and 12 of the Indian Limitation Act apply to appeals and applications under the Provincial Insolvency Act by virtue of section 78 which was enacted by the Provincial Insolvency Act of 1920.

After the coming into force of the Provincial Insolvency Act of 1920 by an amendment of the Indian Limitation Act, section 29(2) was introduced in the year 1922 and it will be observed that section 29 enjoins that for the purpose of determining any period of limitation prescribed for any application by special law the provisions contained in section 4, sections 9 to 18 and section 22 shall apply only in so far as and to the extent to which, they are not expressly excluded by such special law. The words “expressly excluded” as used in this section have been judicially considered in Sati Prasad Garga v. Gobinda Chandra Shee and they are held to mean “that express reference is made to the specific section in the Act; and unless such reference is made to the section and by that reference they are expressly excluded then they would apply”, and in Rewachand Fatehchand v. Karachi Municipality they were held to mean “an exclusion of express words that is by express words of the reference and not exclusion as a result of a logical process of reasoning.” See also Chhaganlal Sakerlal v. The President, Thana Municipality.

It is now generally agreed that the Provincial Insolvency Act is a special law and it does not expressly exclude the provisions contained in section 4 of the Indian Limitation Act; but it is also generally agreed that section 29(2) can only apply “for the purpose of determining any period of limitation prescribed for any suit or application by special law” and if the special law does not prescribe any period of limitation for any petition section 29 will have no application; and, the main controversy which arises in the case is whether the period of three months from the act of insolvency within which a petition has to be presented under the Provincial Insolvency Act is a period of limitation so as to attract the provisions of section 29(2) of the Indian Limitation Act or it is a period which cannot be regarded as a period of limitation, but is laid down as one of the conditions precedent under which the petition for insolvency has to be made.

The phrase “period of limitation” has nowhere been defined in the statute. Generally speaking, it may mean a time prescribed by law for enforcing rights and remedy by presenting a plaint, appeal or application. By section 7 of the Provincial Insolvency Act a right is given to a creditor to present a petition of insolvency. By section 9 of the Act conditions are laid down on which a creditor may present a petition and one of the conditions thus set out in clause (c) is that “the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition.” Section 13(2) lays down the contents of the creditor's petition, and in clause (a) of section 13(2) the creditor is required to set out “the act of insolvency committed by such debtor, together when the date of its commission” and by section 18 of the Act it is laid down that “the procedure laid down in the Code of Civil Procedure, 1908, with respect to the admission of plaints, shall so far as it is applicable, be followed in the case of insolvency petitions.” It is, therefore, permissible to take the view that the petition of insolvency is substantially in the nature of a plaint and the act of insolvency in substance partakes the nature of a cause of action and the condition that the petition should be presented within three months of the act of insolvency substantially provides a period of limitation for the petition. It is true that the Act nowhere says that the period of three months within which the petition is to be made is a period of limitation. It is also true that the Act nowhere lays down the consequences which would follow in neglecting the period of limitation. It is also true that the wording of section 9 is such that the period of three months mentioned therein may be regarded as a condition on which petition has to be made. But, at the same time, the Act nowhere provides any period of limitation for a petition of insolvency with reference to a particular act of insolvency and the Act definitely says that the petition is to be made within three months of the act of insolvency. Is it, therefore, unreasonable to take die, view that in substance this period of three months is a period of limitation?

In Drigpal Singh v. Pancham Singh a Full Bench of this Court had to consider whether a period of 12 years in section 48 of the Civil Procedure Code is a period of limitation and though the question which arose in that case was somewhat different from that which is now before me, the late Sir John Thom, C.J, in his judgment thus defined a period of limitation:—“It appears to me that if the result of a statutory provision is in substance to fix a period within which a person must take appropriate and necessary action if he desires to assert his rights in a court of law, that provision prescribes a period of limitation.” With this observation I respectfully agree.

But if there be any difficulty in applying section 4 of the Indian Limitation Act to a creditor's petition of insolvency on the ground that sections 9 and 13 of the Provincial Insolvency Act do not prescribe any period of limitation and only lay down a condition precedent, then I see no reason why section 10 of the General Clauses Act may not apply to the facts of this case. section 10 of the General Clauses Act applies in all those cases where the Indian Limitation Act does not apply and where within a limited time any act or preceding “is directed or allowed to be done or taken in any court by any Act of the Governor-General in Council.” This section does not take into consideration the purpose for which time is allowed, whether it is by way of condition precedent or for any other purpose, nor does it in any way extend or affect the period of limitation; it only furnishes a rule of interpretation by which time expiring on a day when court is not sitting is deemed to expire on the next day of the sitting of the court. Now sections 9(c) and 54 of the Provincial Insolvency Act allow a limited time, namely a period of three months for making a petition of insolvency and for avoiding fraudulent preference respectively and this limited time, in my opinion, should be interpreted in accordance with section 10 of the General Clauses Act.

In Chenchuramana v. Arunachalam a Full Bench of the Madras High Court has expressed the view that the period of three months within which a creditor's petition is to be made from the act of insolvency is a condition precedent and not a period of limitation and that a creditor's petition in which three months' time from the act of insolvency expired during vacation was incompetent on the re-opening of the court; and this view was followed in Lakshmayya v. Subba Rao and Kumarappa v. Chidambaram.

In Muradan Sardar v. Secretary of State(4) the Calcutta High Court has expressed the view that section 9(c) of the Provincial Insolvency Act lays down a condition precedent and not a period of limitation and consequently section 5 of the Indian Limitation Act read with section 78 of the Provincial Insolvency Act does not apply to a creditor's petition.

On the other hand, in Ma Than May v. The Bailiff of the Township Court of Kyaunggon(5) the Rangoon High Court has held that section 68 of the Provincial Insolvency Act prescribes a period of limitation and section 4 of the Limitation Act applies to proceedings under section 68. In Narayana v. Official Receiver South Malabar Pandalai, J., held that section 4 of the Limitation Act applies to a petition to avoid a fraudulent preference under section 54 of the Provincial Insolvency Act and in Seth Balkisan v. Bhanu Prasad Niyogi, J., held that section 4 of the Limitation Act and section 10 of the General Clauses Act—one or the other—applied to a petition of the creditor under section 54 of the Provincial Insolvency Act to avoid a fraudulent preference.

There is undoubtedly high authority in favour of the view that the period of three months prescribed by section 9(c) of the Provincial Insolvency Act for a creditor's petition is a condition precedent and not a period of limitation. But the main grounds in support of this view as expressed in the Full Bench case of Chenchuramana are these that under English authorities a fraudulent preference if not challenged within three months ceases to be voidable and becomes absolutely valid both as a transfer and as an act of insolvency, that the period of three months within which a fraudulent preference can be avoided under section 54 of the Provincial Insolvency Act is not a period of limitation and therefore the period of three months under section 6, clause (c) of the Provincial Insolvency Act in which a fraudulent preference is mentioned as an act of insolvency cannot also be a period of limitation and if for the purpose of clause (c) of section 6 the period of three months cannot be a period of limitation, it cannot be for the purposes of other clauses also i.e, from (a) to (h) of section 6, and the wording of section 9 and its marginal note suggest that the period of three months mentioned therein is a condition precedent and not a period of limitation.

With greatest respect I cannot see that these ground are really decisive of the controversy. The English cases Ex parte Games in re Bamford and Allen v. Bonnett referred to in the Full Bench case of Chenchuramana do not deal with the question whether in a case of fraudulent preference if the period of three months expires on a day when the court is closed and a petition is presented on the next day, such a petition is incompetent. They only lay down what, no doubt, is the law and what our section 54 reproduces that a fraudulent preference can only be adjudged void if a petition is presented within three months of the transfer and if such a petition is not presented the transfer, becomes absolute and also ceases to be available as an act of insolvency. The question whether the expiration of the time of three months would be taken on the date when the court is closed or would be taken as the next sitting day of the court was not considered in those cases and in view of section 145 of the English Bankruptcy Act cannot arise in England.

Again section 54 of the Provincial Insolvency Act no doubt enacts that a fraudulent preference shall be annulled if the transferor is adjudged insolvent on a petition presented within three months after the date-thereof. And it may be that the period of three months specified in section 54 is not a period of limitation, but it is a time given by the statute within which a transfer is liable to be impeached and at the expiration of which it becomes absolutely valid. Still the question remains how the period of three months is to be interpreted and if the three months expire on a date when the court is closed whether the holiday is to be taken the date of the expiration of the period or the day of the next sitting of court. This again raises the question whether a period of three months is to be interpreted according to calender in disregard of all statutory rules of interpretation of time or it is to be interpreted subject to the law prevalent in a country which lays down a rule of interpretation of such time; and this again raises the question that failing section 4 of Limitation Act why section 10 of General Clauses Act does not apply to the time given in section 54 of the Provincial Insolvency Act. Sir Owen Beasley, C.J, in his judgment in the Madras Full Bench case referred to above, has not considered section 10 of the General Clauses Act at all and though Cornish, J., has considered it and has not applied it, in my opinion, he has given no convincing reasons for rejecting it.

Nor do I see that it necessarily follows that because the period of three months for purposes of section 54 is not a period of limitation, therefore, it must not be so for purposes of section 9(c) also, because section 9(c) relates back to section 6 and one of the clauses of section 6, namely clause (c) relates to fraudulent preference which is also a subject-matter of section 54. In clauses (a) to (h) of section 6, eight acts of insolvency are specified, three of which are transfers made by the debtor specified in clauses (a) to (c) and five are other kind of acts of insolvency specified in clauses (d) to (h). Of these three kinds of transfers specified in clauses (a) to (c) which are regarded as an act of insolvency, one dealt with in clause (b) is provided in section 53 and can be avoided in two years and the other dealt with in clause (c) is provided in section 54 and can be avoided within three months and there is no period for the transfer dealt with in clause (a). It seems to me that the period of three months given under section 9(c) to make a petition from an act of insolvency applies to all eight acts of insolvency including three acts of transfer and five other kind of acts and the fact that for one act of transfer out of these three is the same period to avoid the transfer as it is for making the petition is a mere accident and this coincidence furnishes no adequate reason for holding that the period of three months in section 9(c) is used in exactly the same sense and is subject to same legal interpretation as in section 54.

There remains the argument on the wording of section 9 and on its marginal note. I realise the force of it, but the problem is a problem of the interpretation of the section and the whole question is whether the legislature in enacting that no creditor shall be entitled to present a petition for adjudication unless he does so within three months of the act of insolvency on which the petition is grounded, was providing a period of limitation or laying-down a condition precedent. It seems to me that having regard to the fact that no period of limitation is provided elsewhere for such a petition which is in the nature of a plaint, the sounder interpretation is that the time specified by the statute should also be regarded as a period of limitation.

Section 4 of the Indian Limitation Act and section 10 of the General Clauses Act give expression to the general principle of law enunciated by the maxims “Lex non cogit ad impossibilia”—the law does not compel a man to do that which he cannot possibly perform, and “Actus Curiae neminem gravabit”—an act of the court shall prejudice no man. These sections do not in any way extend the period of limitation, nor do they furnish any data for computation of time; they merely embody a rule of elementary justice that if the time allowed by statute to do an act or to take a proceeding expires on a day when the court is closed, it may be done on the next sitting of the court. In Maqbul Ahmad v. Pratap Narain Singh, Lord Tomlin in delivering the judgment of the Judicial Committee has thus explained the true nature of section 4 of the Limitation Act: “The language employed in section 4 indicates that it has nothing to do with computing the prescribed period. What the section provides is that where the period prescribed expires on a day when the court is closed, notwithstanding that fact the application may be made on the day that the court reopens; so that there is nothing in the section which, alters the length of the prescribed period;” I see no reason why the creditor's petition in this case may not also be protected and be governed by one or other of these provisions.

For the reasons given above, I am of opinion that the petition of Sheopujan Pande for adjudication of Raja Pande as an insolvent was competent as having been made within three months of the act of insolvency and this appeal should be dismissed with costs.

Plowden, J.:— I agree with the conclusion arrived at in this case by the Hon'ble the Chief Justice.

By the Court:—We dismiss this appeal with costs.