1937 (2) TMI 5 - HC - Companies Law

Summary

Issues:
1. Whether the respondents' debts, admitted by the Official Receiver, should be expunged from the schedule.
2. Interpretation of Section 34(2) of Act V of 1920 regarding provable debts under the Provincial Insolvency Act.
3. Determining the criterion date for assessing debts in insolvency cases.
4. Application of the doctrine of 'relation back' in insolvency proceedings.
5. Comparison of the scheme of the English Bankruptcy Law with the Provincial Insolvency Act.
6. Consistency and uniformity in interpreting insolvency laws across different provinces.

Analysis:
1. The Civil Revision Petition pertains to expunging the respondents' debts, acknowledged by the Official Receiver, from the schedule. The lower courts considered the debts enforceable at the time of the insolvency petition but barred by limitation before adjudication. The argument was presented based on this assumption.

2. Section 34(2) of Act V of 1920 states that debts owed by the insolvent upon adjudication are provable under the Act. The courts upheld the respondents' position, emphasizing Section 28(7) regarding the 'relation back' provision, indicating the petition filing date as crucial. Case precedents were cited to support this stance.

3. The determination of the criterion date for assessing debts was crucial. The courts relied on past judgments, including those from Lahore and Bombay High Courts, supporting the 'relation-back' doctrine. Previous cases emphasized that the doctrine governs the interpretation of 'order of adjudication' under the Act.

4. The doctrine of 'relation back' was extensively discussed, with references to various judgments supporting its application in insolvency matters. The judges highlighted the importance of considering the petition filing date as a representative proceeding, affecting all creditors involved.

5. A comparison between the English Bankruptcy Law and the Provincial Insolvency Act was made. The English law considers the receiving order date as crucial, unlike the Act, which focuses on the insolvency petition filing date for most purposes. The Act's departure from English practice raised questions about legislative intent and the dissociation from the 'relation back' doctrine.

6. The judgment emphasized the importance of consistency and uniformity in interpreting insolvency laws across different provinces. Despite reservations about the conclusion, the courts upheld past decisions for practical reasons, ensuring creditors' reliance and leaving any alterations to the legislature. The Revision Petition was dismissed on these grounds, without costs.