TMI Blog2003 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the date of adjudication and cannot be said to be provable under section 46(3) of the Presidency Towns Insolvency Act. The legal position has been consistent in this regard that debt to be provable under insolvency must be arising out of obligation incurred before the order of adjudication or the insolvent must become subject before discharge - - - - - Dated:- 14-11-2003 - Judge(s) : R. M. LODHA., A. V. MOHTA. JUDGMENT The judgment of the court was delivered by R.M. Lodha J. - None appears for the appellants. The appeal is, accordingly, liable to be dismissed in default. Even otherwise, we are satisfied that there is no merit in the appeal. Respondents Nos. 1 to 4 herein were adjudicated insolvents in the insolvency proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject when he is adjudged an insolvent or to which he may become subject before his discharge by reason of any obligation incurred before the date of such adjudication, shall be deemed to be debts provable in insolvency." The Division Bench of this court way back in the year 1931 in Gustasp Behram Irani v. Bhagvandas Sobharam, AIR 1931 Bom 554, held that the debt to be provable against the insolvent must be arising out of an obligation incurred before the order of adjudication or the insolvent must become subject before discharge. The Division Bench held thus: "The question, therefore, arises whether the decretal debt with regard to the costs in the application for leave to sue is a provable debt within the meaning of sub-section (3), s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unsuccessful, no costs become payable by him or out of his estate, and no question as to them can arise. But if an unsuccessful action is brought by a man who becomes bankrupt, then, if he is ordered to pay the costs, or if a verdict is given against him before he becomes bankrupt, they are provable. On the other hand, if no verdict is given against him, and no order is made for payment of costs until after he becomes bankrupt, they are not provable. In such a case there is no-provable debt to which the costs are incident, and there is no liability to pay them by reason of any obligation incurred by the bankrupt before bankruptcy; nor are they a contingent liability to which he can be said to be subject at the date of his bankruptcy.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim does not constitute a debt provable in insolvency under the provisions of section 46(3) of the Presidency Towns Insolvency Act. In Insolvency Petition No. 52 of 1969, the claim was made by the Commissioner of Sales Tax before the official assignee in the insolvency of one Sureshchandra Jayantilal Thakkar. The claim related to sales tax dues, penalty, revised sales tax dues and rectification of earlier assessment orders made under the provisions of the Bombay Sales Tax Act, 1959. The official assignee rejected the part of the claim which related to the period after the order of adjudication was made against the insolvent. Aggrieved thereby, the Sales Tax Department took out notice of motion before the learned judge and it was held the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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