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citation codes
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  • section 28(2) of the Provincial Insolvency Act, V of 1920, reproduces these provisions
  • section 28(2) of the Provincial Insolvency Act, Act V of 1920,
  • Act, the Provincial Insolvency Act III of 1907,
  • section 28(2) of the Provincial Insolvency Act
  • SECTION 31 PROVINCIAL INSOLVENCY ACT
  • section 186 of the Indian Penal Code.
  • section 16 of Act III of 1907,
  • PROVINCIAL INSOLVENCY ACT
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • section 28(2) of the Provincial Insolvency Act, V of 1920, reproduces these provisions
  • section 28(2) of the Provincial Insolvency Act, Act V of 1920,
  • Act, the Provincial Insolvency Act III of 1907,
  • section 28(2) of the Provincial Insolvency Act
  • SECTION 31 PROVINCIAL INSOLVENCY ACT
  • section 186 of the Indian Penal Code.
  • section 16 of Act III of 1907,
  • PROVINCIAL INSOLVENCY ACT
Smart Summary

Opinion Summary — Bennet, J.

Factual and Procedural Background

This is a reference from the Sessions Judge of Farrukhabad concerning an acquittal by a Magistrate of five persons charged under section 186 of the Indian Penal Code. The complaint was made by the Sub-ordinate Judge. The Magistrate, on 8 August 1931, recorded an order describing the facts but recorded no evidence.

The facts, as set out in the Magistrate's order, were that Lachhmi Narain had been adjudicated an insolvent on 14 September 1927. In execution proceedings a request was made to arrest him; he was arrested on 4 June 1931 and produced before the court on 5 June 1931. The court ordered a peon to take him to the creditor's house to realise the decretal amount. The peon took Lachhmi Narain to his (Lachhmi Narain's) house; while going to his house Lachhmi Narain entered Lalman's shop and refused to accompany the process server. The accused were said to have obstructed the process server in the discharge of his duty.

The Magistrate discharged (later altered to "acquit") the accused in what the Sessions Judge characterised as a proceeding in which no witnesses were examined, despite eleven witnesses being named in the complaint. The Sessions Judge referred the acquittal for consideration, focussing on the correctness of the legal reasons given by the Magistrate.

Legal Issues Presented

  1. Whether the Magistrate complied with the mandatory procedure for a summons-case trial under Chapter XX of the Code of Criminal Procedure (in particular sections 242–244) when he recorded no evidence though eleven prosecution witnesses were named.
  2. Whether section 28(2) of the Provincial Insolvency Act (Act V of 1920) bars a creditor from applying in execution for the arrest of a judgment-debtor who has been adjudicated an insolvent — i.e., whether adjudication as insolvent exempts a judgment-debtor from arrest in execution.
  3. Whether the Sessions Court should exercise its revisionary discretion to set aside the Magistrate's acquittal and order a retrial.

Arguments of the Parties

Accused's Arguments

  • Learned counsel for the accused contended (by reliance on several prior rulings) that under section 28(2) of the Provincial Insolvency Act a creditor is barred from applying in execution for the arrest of a judgment-debtor who has been adjudicated an insolvent; this was advanced as a legal basis for acquittal.
  • Counsel requested that the question of law be referred to a Full Bench for consideration, relying on those earlier rulings.

Complainant's Arguments

  • The complainant's counsel contended that the Sessions Court should exercise its discretion to interfere in revision and order a retrial; counsel relied on prior instances where retrial had been ordered following an acquittal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Solayappa Naicker v. Shunmugasundaram Pillai Cited as authority for the proposition that section 28(2) of the Provincial Insolvency Act bars a creditor from applying for the arrest of an adjudicated insolvent. The court rejected the weight of this ruling, finding it to be without adequate reasoning for the proposition relied upon.
Partap Singh Pardhan Singh v. Bhai Mewa Singh Jodha Singh Cited similarly as supporting a bar to arrest under section 28(2) of the Provincial Insolvency Act. The court found the ruling unconvincing and lacking substantive reasoning and therefore not persuasive.
Tan Seik Ke v. C.A.M.T. Firm Cited as another authority to the effect that section 28(2) bars arrest of an adjudicated insolvent. The court dismissed its reasoning as singularly devoid of reasons and not persuasive.
Maharaj Hari Ram v. Sri Krishan Ram Held that section 28(2) does not operate to protect a judgment-debtor who has been adjudicated an insolvent from arrest; a contrary view to the earlier rulings. The court followed this Bench ruling as binding on a single judge and accepted its correctness; Bennet, J. stated he was bound to follow it and gave reasons agreeing with it.
Mahomed Roshan v. Gulam Mohiddin Given as a similar ruling to Maharaj Hari Ram — i.e., not operating to bar arrest. Noted as consistent with the Bench ruling which the court followed.
Hit Narayan Singh v. Brij Nandan Singh Cited by others for the proposition that the latter part of section 28(2) of the Provincial Insolvency Act refers to the person; used to support immunity from arrest. The court described this authority as containing merely a statement of the proposition without reasoning and therefore unpersuasive.
Alamelu Ammal v. Venkatarama Iyer Cited in support of the view that section 28 operates as a bar (implicit reliance on insolvency provisions). The court observed the single-judge ruling made no reference to section 31 of the Provincial Insolvency Act and found it lacking in engagement with relevant statutory provisions.
Easwara Iyer v. Govindarajulu Naidu Cited in support of a broader construction (court noted it deals with the Presidency Towns Act rather than the Provincial Insolvency Act). The court noted it dealt with a different Act (the Presidency Towns Act) and therefore its utility was limited; the ruling lacked adequate reasoning for the conclusion in the Provincial Insolvency Act context.
Nand Ram v. Khazan and Musammat Nanhi Bahu v. Dhunde Cited as examples where this Court ordered a retrial following an acquittal. The court relied on these authorities in considering whether to exercise revisionary powers and concluded retrial was appropriate in the present matter.

Court's Reasoning and Analysis

The court's analysis proceeded in two principal strands: (A) procedural law under the Code of Criminal Procedure applicable to summons cases, and (B) substantive law under the Provincial Insolvency Act concerning whether adjudication as an insolvent prevents arrest in execution.

(A) Procedural Analysis

  • The court held that the offence under section 186 IPC was a summons-case and the Magistrate's procedure should have followed Chapter XX of the Code of Criminal Procedure.
  • Under section 242 the Magistrate should state the substance of the accusation to the accused and ask if they had any cause to show why they should not be convicted; under section 243 conviction could follow on admission (which did not occur here).
  • The accused pleaded that the acts alleged formed no offence; therefore under section 244 the Magistrate had a compulsory duty to "take all such evidence as may be produced in support of the prosecution." Eleven witnesses were named in the complaint, and it was the Magistrate's duty to take their evidence.
  • The Magistrate recorded no evidence (the order-sheet was silent as to any evidence being taken) and proceeded to discharge/acquit. The court concluded there was no trial at all before the Magistrate and that this procedural failure constituted an absolute miscarriage of justice.

(B) Substantive Analysis — Construction of the Provincial Insolvency Act

  • The court compared the earlier Provincial Insolvency Act (Act III of 1907), section 16(2), which stated that "no creditor ... shall have any remedy against the property or person of the insolvent" with section 28(2) of Act V of 1920, which omits the words "or person" and says "no creditor shall have any remedy against the property of the insolvent."
  • Counsel for the accused admitted that under the 1907 Act the omitted words "or person" prevented a creditor from applying for the arrest of an adjudicated insolvent. Given their omission in the 1920 Act, the court rejected the approach of reading the protection against arrest into other phrases (for example "or commence any suit or other legal proceeding"). The court described that method of construction as radically unsound.
  • The court noted that the 1920 Act introduced a new section 31, providing for discretionary protection orders on application by the insolvent (the court "may make such an order on application" and it "may apply to any or all of the debts as the court thinks fit"). This discretion, the court concluded, demonstrated that immunity from arrest was no longer automatic; the legislature deliberately omitted "or person" from section 28 and provided a distinct mechanism in section 31 to regulate protection from arrest.
  • On these textual and structural grounds the court agreed with the Bench ruling in Maharaj Hari Ram v. Sri Krishan Ram that section 28(2) does not operate to bar the arrest of a judgment-debtor adjudicated an insolvent.
  • Consequently, the warrant issued by the Sub-ordinate Judge for the arrest was legal, and those executing it were protected by section 186 of the Indian Penal Code.

Holding and Implications

CORE RULING: The reference was accepted; the Magistrate's order of acquittal was set aside and a retrial was directed.

More precisely, Bennet, J. held that (1) the Magistrate committed a procedural miscarriage by failing to take the prosecution evidence in a summons-case as required by sections 242–244 CrPC; (2) on the substantive law the omission of the words "or person" from section 28(2) of the Provincial Insolvency Act, coupled with the introduction of section 31 in the 1920 Act, demonstrates that adjudication as an insolvent does not ipso facto bar the arrest of a judgment-debtor; and (3) the warrant of arrest issued by the Sub-ordinate Judge was lawful and those executing it were protected by section 186 IPC.

Direct consequence for the parties: the Magistrate's acquittal was set aside and the accused are to be retried by a Magistrate having jurisdiction; the record will be sent to the District Magistrate for directions for retrial.

Broader implications noted by the court: the matter is of public importance because it concerns the execution of warrants by civil court process-servers and the need to support them in the exercise of their duties. The court applied and followed an existing Bench ruling (Maharaj Hari Ram v. Sri Krishan Ram) on the construction of the Provincial Insolvency Act; Bennet, J. declined to follow single-judge and other rulings that, in his view, lacked sufficient reasoning.

    Ali Husain And Another v. Lachhmi Narain Mahajan And Others

    Bennet, J.:— This is a reference by the learned Sessions Judge of Farrukhabad of an acquittal by a Magistrate of five persons who were charged under section 186 of the Indian Penal Code. The complaint was made by the Sub-ordinate Judge. The Magistrate recorded no evidence but he made an order on the 8th of August, 1931, setting forth the facts of the case and stating that the contention on behalf of the defence was an argument of law. The facts set forth were as follows: “The said Lachhmi Narain has been declared an insolvent on the 14th of September, 1927. In execution proceeding the request was to arrest Lachhmi Narain. Lachhmi Narain was arrested on the 4th of June, 1931. On the 5th of June, 1931, Lachhmi Narain was put up before the court which had ordered the arrest. The court ordered a peon to take Lachhmi Narain to the hitter's house and realise the decretal amount. The peon took Lachhmi Narain to his (Lachhmi Narain's) house. Lachhmi Narain while going to his house got into the shop of Lalman and refused to accompany the process server. The accused obstructed the process server doing his duty of taking Lachhmi Narain to court.” Now the offence of section 186 of the Indian Penal Code was a summons case and the procedure of the Magistrate should have been governed by chapter XX of the Code of Criminal Procedure. The accused had appeared on this date and under section 242 the Magistrate should have stated the substance of the accusation to the accused and asked if they had any cause to show why they should not be convicted. Under section 243 if the accused admitted the offence they might have been convicted; but that is not the case here. The accused pleaded that the acts alleged formed no offence. The duty of the Magistrate therefore lay under section 244 to hear all the evidence in support of the prosecution. The language is compulsory and says: (“The Magistrate shall …. take all such evidence as may be produced in support of the prosecution.” There were eleven witnesses named in the complaint and it was the duty of the Magistrate to take the evidence of these eleven witnesses. The Magistrate did not take the evidence of any of these witnesses apparently, as the order sheet is silent on this point, but the Magistrate proceeded to write an order ending with the words: “I therefore discharge the accused, this being a summons case.” Later the Magistrate altered the word “discharge” to “acquit”. Learned counsel for the accused cannot point to any section of the Code under which the procedure of the Magistrate could be justified. There was therefore no trial at all before the Magistrate. The learned Sessions Judge has not made the reference on account of this defect in procedure but because he considers that the leal reasons given by the Magistrate are incorrect. The Magistrate relied on the following rulings of other left Courts: Solayappa Naicker v. Shunmugasundaram Pillai (1). Partap Singh Pardhan Singh v. Bhai Mewa Singh Jodha Singh (2) and Tan Seik Ke v. C.A.M.T Firm (3). These rulings lay down that under section 28(2) of the Provincial Insolvency Act, Act V of 1920, a creditor is barred from applying in execution for the arrest, of a judgment-debtor against whom an order of adjudication is passed. A contrary view has been taken in Maharaj Hari Ram v. Sri Krishan Ram by a Bench of this Court which has held that section 28 does not operate as any protection from arrest of a judgment-debtor who has been adjudicated an insolvent. There is also a similar ruling in Mahomed Roshan v. Gulam Mohiddin . The ruling of a, Bench of this Court is binding on a single Judge, and therefore I am bound to follow it. Learned counsel has however addressed me on the strength of various rulings with the request that for the reasons given in those rulings I should ask that this question should be referred to a Full Bench. I find myself unable to see any merit in the rulings to which counsel refers, and they seem to me to be singularly devoid of reasons for what they state. In Hit Narayan Singh v. Brij Nandan Singh there is a mere statement that the latter part of section 28(2) of the Provincial Insolvency Act would refer to the person. This is what it is required to prove, and merely stating a proposition is not the same as adducing reasons for that proposition. Alamelu Ammal v. Venkatarama Iyer (4), a single Judge ruling, made no reference at all to section 31 of the Provincial Insolvency Act which deals with the question of the freedom from arrest, and again there is a mere assumption that section 28 will be a bar Easwara Iyer v. Govindarajulu Naidu (5) deals with the Presidency Towns Act and not with the Provincial Insolvency Act and again there is an absence of reasons for the conclusion, even if we assume that the language of the various sections in the Presidency Towns Act is similar. Part of the reasoning is based on “section 41 of the old Act” and that does not appear to refer to any of the Provincial Insolvency Acts.

    I may briefly set forth the reasons which lead me to conclude that the ruling of this Court reported Maharaj Hari Ram v. Sri Krishan Ram is correct, and a ruling from which I see no reason to differ. In the former Act, the Provincial Insolvency Act III of 1907, there was a paragraph in section 16(2) which ran as follows: “On the making of an order of adjudication…. no creditor to whom the insolvent is indebted in respect of any debt payable under this Act shall, during the pendency of the insolvency proceedings, have any remedy against the property or person of the insolvent in respect of the debt or commence any suit or other legal proceeding except with the leave of the court and on such terms as the court may impose”. Now section 28(2) of the Provincial Insolvency Act, V of 1920, reproduces these provisions with an important difference. In place of the words “no creditor…. shall have any remedy against the property or person of the insolvent” we now have the phrase “no creditor shall have any remedy against the property of the insolvent”. The difference is that the two words “or person” have now been omitted. Learned counsel for the accused admits that under Act III of 1907 it was these words, “or person”, which prevented a creditor from applying to an execution court for process of arrest against a judgment-debtor when his judgment-debtor had been adjudicated an insolvent. It would follow therefore that if tins is provided by that part of section 16 of Act III of 1907, the remaining words which are separated by the conjunction “or”, that is “or commence any suit or other legal proceeding”, are not the words under which a creditor was prevented from applying for arrest of his judgment-debtor. Now in the present Act (Act V of 1920) the words “or person” no longer exist, but the rulings on which learned counsel for the accused relies assume that the words “or other legal proceedings” are words which now bar a creditor from applying for execution by arrest of his judgment-debtor. It is to me a very strange method of construction to hold that the question of freedom from arrest could come under one part of the paragraph in Act III of 1907 and, when that part is omitted in Act V of 1920, that the same provision should be held to exist under another and separate part of that paragraph. It appears to me that the courts have gone out of their way to hunt about in various parts of this paragraph and have seized on any phrase which they think can give shelter to the provision in question. I consider that this method of construction, of changing the meaning of words from one Act to another Act and of holding that in one Act they bear one meaning and in another Act the same words bear another meaning, is a method which is radically unsound.

    There is another reason as to why the ruling of this Court is sound. In the present Provincial Insolvency Act there is a new section introduced, section 31, which provides for an insolvent applying for a protection order to the insolvency court. The language used is that the court “may make such an order on application” and that the order may “apply to any or all of the debts as the court thinks fit”. There is therefore a discretion granted to the court either to make such an order or make a limited order or not to make a protection order at all. It is no longer a matter of right for a judgment-debtor to apply in insolvency and be ipso facto absolved from liability to arrest. It appears clear to me that the words “or person” were deliberated taken out of the present section 28 by the legislature, because provision was made in section 31 for dealing with this particular matter of how far insolvency proceedings bar the arrest of a judgment-debtor. When we find that in the new Act certain changes have been made in the old Act by the omission of a provision dealing with a certain matter and the introduction of new provisions dealing with that matter, the natural conclusion should be that the new provisions are intended to deal solely with that matter and that the courts should look for guidance to these new provisions and not attempt to read provisions into general words in other parts of the Act. I note that the rulings on which learned counsel for accused relies do not in general deal with this point of view. For these reasons I consider that in the present case the judgment-debtor was not barred from being arrested in execution and the action of the learned Sub-ordinate Judge in issuing a warrant of arrest was perfectly legal and the warrant was a perfectly legal warrant. The persons who were carrying out that warrant would be protected by section 186 of the Indian Penal Code. The Magistrate therefore was not only wrong in his procedure but he was wrong in his substantive law. Having been wrong on both points, it appears to me that his proceeding was an absolute miscarriage of justice.

    Further argument has been made as to whether the case is not one in which this Court should exercise its discretion and interfere in revision. Learned counsel for the complainant has pointed out that this Court has ordered a retrial where there was an acquittal in Nand Ram v. Khazan and Musammat Nanhi Bahu v. Dhunde . In the present case it appears to me that the trial is of some public importance because it is a case of the execution of a warrant by the civil court process servers, and it is necessary that such process servers should be supported in the exercise of their duties. For these reasons I accept this reference and I set aside the order of acquittal of the Magistrate and I direct that the accused shall be retried by a Magistrate having jurisdiction. The record will be sent to the District Magistrate for directions for retrial.

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    Comments

    Ali Husain And Another v. Lachhmi Narain Mahajan And Others
    (Dec 8, 1931)