The legal character assigned to a person announces to all the world what the legal status of the person in question is. The rreaning of "legal character" must be narrowly construed for it must be remembered that an action in rem is not an action against a thing but an action availing against all the world. One must be cautious lest litigation between A and B ba allowed unduly to affect the rights of C. The sort of danger is clearly shown inOfficial Assignee of Madras v. C.R.M.O.R.S. Firm.The principle is lucidly stated in Phipson's Law of Evidence (5th Edition) at page 387 as follows: "The principle of the conclusiv-eness of judgment in rem as regards persons is that public policy for the peace of society requires that matters of social status should not be left in continual doubt; and as regards things, that generally speaking, every one who can be affected by the decision may protect his interest by becoming a party to the proceedings. In addition to it, it has to be remembered that a decision in rem not merely declares the status of the person or thing but ipso facto renders it such as it is declared; thus a decree of divorce not only annuls the marriage but renders the wife feme sole; an adjudication in bankruptcy not only declares but constitutes the debtor a bankrupt; a sentence in a prize Court not merely declares the vessel prize but vests it in the captor." The expression "legal character" has not been defined in any Statute. Its meaning has to be understood in the light of the principles relating to judgments in rem which the Legislature must have had in view in framing this section. The same expression 'legal character" is found in Section 42 of the Specific Relief Act. That section says that only a person entitled to any legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or right to property. In construing the significance of that expression, a Division Bench of this, Court has observed in Ramakrishna, Pattar v. K.P. Narayana Pattar 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912 at page 82 Page of 46 M.L.J.--[Ed.] as follows: "We take it that a man's legal character is the same thing as a man's status. A man's status or legal character is constituted by the attributes which the law attaches to him in his individual and personal capacity the distinctive mark or dress as if were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general,"
1. This case arises on a complaint filed by one P. Kumaraswami Rao. The Tribunal of the Bar Council to whom this complaint was referred for enquiry framed the following charge:
That between 1921 and 1923, you, P. C Venkataramanayya Pantulu now an Advocate of the High Court, Madras, and formerly a Vakil of the said Court taking advantage of a remittance in January, 1921, by you through one Piratla Subba Rao of a sum of Rs. 1,300 to P. Kumaraswami Rao in Madras on some other account and not by way of loan conspired with the eaid Subba Rao and one L, V.N. Sastry to prefer a false claim against the said Kumaraswami Rao through and in the name of the said L.V.N. Sastry by filing a suit O S. No. 282 of 1922 on the file of the District Munsif's Court at Cocanada as upon a promissory note alleged to have been executed by the said Kumaraswami Rao in favour of the said Subba Rao and to have been endorsed by the said Subba Rao in favour of the said L.V.N. Sastry and alleged subsequently to have been lost by the said L.V.N. Sastry and wilfully and fraudulently obtaining an ex parte decree against the said Kumaraswami Rao without proper service of summons and all this with the ulterior purpose of utilizing the same against the said Kumaraswami Rao who was then making some pecuniary claims against you; and further you had the said decree transferred to Madras for execution and had it, executed by arresting the said Kumaraswami Rao at or about the time he filed a suit against you in the Presidency Court of Small Causes, Madras, namely, Suit No. 9738 of 1923 and you have thereby made yourself guilty of misconduct which renders you unfit to continue in the profession.
2. The enquiry before the Tribunal has resulted in findings adverse to the Advocate. The Tribunal does not accept in its entirety the complaint of Kumaraswami Rao It disbelieves certain of his allegations. It, however, does not accept the re-spondent'a answers with regard to all important matters either alleged againet him or appearing in the course of the enquiry to require an answer. It does not accept the whole of the complainant's case and only accepts a part of the respondent's.
3. The history of this case is as follows: Kumaraswami Rao was admittedly on terms of close friendship with, the respondent from about 1916 up to 1921 except for a short period in 1918 to 1919. He seems to have been more or less a dependant of the respondent and it seems clear that at no time was his financial position a good one. One D. Seshagiri Rao an Advocate of the High Court was also at this time very friendly with the respondent and appears to have been sharing the same business premises. In March, 1921, arising out of some business transactions the respondent and Seshagiri Rao filed a suit in the High Court against one Subramaniam Chetty claiming Rs. 7,000 from him. Subramaniam Chetty then filed a suit against the respondent in the High Court and another suit against Seshagiri Rao also in the High., Court setting up the case in each suit that the respondent and Seshagiri Rao owned him sums of money. All the three suits ended in a victory for the respondent and Sesha-giri Rao but the appeals against the decrees in those suits ended in the appeals being allowed and the suits ordered to be remanded for fresh trial. They were subsequently compromised. It seems tobe a fact that Kumaraswami Rao was interesting himself in those suits and it appears to have been supposed that he was in a position to assist the respondent in the litigation and it is admitted by the respondent that he believed that Kumara-swami Rao might be useful to him and that he felt that he had to keep him in good humour. It seems probable that it was supposed by the respondent that Kumaraswami Rao was in possession of correspondence or documents the production or suppression of which might assist the parties to the litigation. At the latter end of January 1921, Kumaraswami Rao after an urgent request by him to the respondent received, by the telegraphic money order sums amounting to Rs. 1,300 and it does not appear to be disputed, by Kumaraswami Rao that the money was sent to him by one P. Subba Rao. Whose money this really was is one of the important matters in this case. It is represented by Kumaraswami Rao that this money was due to him from respondent on account of business transactions although this version is disbelieved by the Tribunal and was the respondent's money and not Subba Rao. On the other hand the respondent alleges that this money was P. Subba Rao's money and that it was lent by P. Subba Rao to Kumaraswami Rao at the request of the respondent. According to the respondent, this, therefore, was a loan from P. Subba Rao to the complainant and he (the respondent) had nothing whatever to do with it beyond requesting Subba Rao to lend the money to Kumaraswami Rao. The Tribunal has disbelieved the respondent's allegation that the money was Subba Rao's and also his denial that it was his (the respondent's). It is alleged by the respondent that after the receipt of the money by Kumaraswami Rao the latter executed at Madras a promissory note in favour of Subba Rao dated the 28th January, 1221, payable on demand and bearing interest at 18 per cent, per annum. This allegation has been disbelieved'by the Tribunal and the history with regard to this alleged promissory note is another of the important matters in this case. It is a curious one. It is alleged that the pro roe was assigned by endorsement to one L.V.N. Sastry on the 29th January, 1922. L.V.N. Sastry is a near relative by marriage of the respondent and a notice of demand was sent by a Pleader at Cocanada Mr. Kameswara Rao on behalf of L.V.N. Sastry addressed to the petitioner at 46, Thambu Cnetty Street, Madras. This notice was returned undelivered through the Dead Letter Office in February, 1922. The alleged promissory note is stated on the respondent's behalf to have been shown to Mr. Kameswara Rao the Pleader for the purpose of the before-mentioned notice and thiB statement is supported by the evidence of that gentleman and it may well be that a promissory-note purporting to have been executed by the petitioner was shown to him. It is alleged that after being shown to Mr. Kameswara Rao it was lost by L.V.N. Sastry about the 14th February, I922, at the Bezwada Railway Station and L.V.N. Sastry had to file a suit O.S. No. 288 of 1922, in the District Munsif'e Court of Cocanada, upon the footing of a lost promissory-rote. The suit was filed against Kumaraswami Rao, as the first defendant and P. Subba Rao, the endorser, as the second defendant. The address of Kumaraswami Rao is given as 46, Thambu Chetty Street. The first summons to Kumaraswami Rao was returned unserved as Kumaraswami Rao was not then at the address given, namely, 46,, Thambu Chetty Street. The date of the summons is 29th June, 1922. The endorsement on it by the Bailiff is as follows:
I went to the within-mentioned premises in search of the defendant where he, could not be found but I found, it is a hotel, The hotel keeper told me that there is no person living in that hotel by the name of the defendant. So 1 posted a copy of summons on the outer-door of the house No. 46, Thambu Chetty Street, George Town, at 10 a m., on the 9th July, 1922.
4. A fresh summon was ordered on the 14th August and it was addressed to the defendant Kumaraswami Rao, at the same address and was again returned unserved with a similar endorsement by the Bailiff to that which appears on the earlier summons. It must be noted that P. Subba Rao the second defendant filed a written statement contesting the suit although on what ground it is neither stated nor apparent. L.V.N. Sastry then obtained a decree ex parte against Kumara swami Rao in this suit but gave up his claim against Subba Rao the second defendant who did not Dress for costs. In suoport of his claim L.V.N. Sastry filed an affidavit in which he stated that he was present when Kumaraswami Rao, the first defendant executed the promissory note in favour of the second defendant, that he saw Kumaraswami Rao sign and that he knew his signature. The statement that he was present when the first defendant executed the promissory note and that he saw him sign it has been admitted by L.V.N. Sastry in his evidence before the Tribunal to be untrue. The decree in the suit which is dated the 22nd September, 1922, is as against the first defendant Kumaraswami Rao alone. As the promissory note was alleged to have been lost L.V.N. Sastry the plaintiff filed an indemnity bond in order to obtain his decree. This decree was subsequently transferred to the Court of Small Causes, Madras, for execution. On 9th August, 1923, L.V.N. Sastry applied for a warrant of arrest without notice against Kumaraswami Rao, and the application is supported by an affidavit dated the 8th August. Therein it is stated that the first defendant (Kumaraswami Rao) "is not possessed of any immoveable property or moveable property sufficient to satisfy the decree" and is '"unemployed." By this time the decretal amount had with interest risen to Rs. 1,930. 8 0, A warrant for the arrest of Kumaraswami Rao was issued and ha was arrested. When he was arrested on the, 20th August he appeared before the Court and got himself adjudicated an insolvent. It must be noted that Kumara-swarni Rao had not taken any steps up to then to set aside the ex parte decree passed against him in the District Munsif's Court of Cocanada. He says that he only learnt of this decree when the warrant of arrest was issued against him. L.V.N. Sastry filed his claim before the Official Assignee based on the ex parte decree obtained by him against Kumaraswami Rao. Kumaraswami Rao repudiated the ex parte decree as falsely and fraudulently obtained. The Official Assignee enquired into that claim and made his report on 11th January, 1929, rejecting it as a false and on appeal from the Official Assignee's order Kumaraswami Sastri, J., upheld the Official Assignee's order on the 22nd January, 1929. Against this an appeal was filed O.S.A. No. 25 of 1929. This appeal was disposed of by our learned brothers Ramesam and Cornish, JJ., whilst this matter was under enquiry by the Tribunal. The appeal was allowed and L.V.N. Sastry's claim based on the ex parte decree in the Cocanada suit and also on the merits was allowed: and with regard to this appellate judgment a legal contention has been raised both here and before the Tribunal which has resulted in an argument which has necessarily occupied a great deal of our time. It has been argued that this last j udgment is conclusive of the matter now before us and that it was neither open to the Tribunal nor is it open to us now to go into the question of the truth or otherwise of L.V.N. Sastry's claim. Before dealing with that contention, there are some other matters to which reference must be made. It is quite clear that at the time when Kumaraswami Rao received the remittance of Rs. 1,300 he was on friendly terms with or at any rate willing to assist the respondent in his litigation but his attitude changed later on. It is a fact that he was cited as a witness in Subramaniah Chetty's suits for Subramania Chetty against Seshagiri Rao and the respondent, though he was eventually not examined. In connection with Kumaraswami Rao's changed attitude it must be observed that on the 5th April, 1921, Kumaraswami Rao put forward an alleged claim against the respondent for payment of Rs. 1,200 the balance stated to be due to him in connection with transactions he alleged he had had with the respondent for the previous 21/2 years. The respondent disputed the claim as being false and fraudulent and made a counter demand for Rs. 357 against Kumaraswami Rao. It is alleged by Kumaraswami Rao that there immediately followed a settlement of his claim and the respondent's claim in the presence of Mr. Ramachandra Raju the respondent's then Vakil and Mr. Seehagiri Rao and it is said that the respondent agreed to pay Kumaraswami Rao Rs. 600 in full settlement. Kumaraswami Rao gave a notice of claim on the alleged settlement already referred to on 18th November, 1922, (Ex. C) and on the 7th August, 1923, the Official Assignee filed a suit against the respondent claiming from him the Rs. 600 agreed to be paid by him under that settlement. The plaint in the suit is Ex. J. Although a previous warrant for the arrest of Kumaraswami Rao had been taken out, it was not executed, It is significant that steps to arrest Kumara-Swami Rao were again taken immediately the Official Assignee filed the before-mentioned sait in the Court of Small Causes. The position, therefore, was that Kumaraswami Rao at one time a great friend of the respondent and able to assist him in hia litigation or embarrass him in it found himself under arrest at the instance of L.V.N. Sastry in execution of the decree in the District Munsif's Court of Cocanada and sought the protection of the Insolvency Court; and when L.V.N. Sastry's claim was investigated it was rejected by the Official Assignee and that decision was upheld by Kumaraswami Sastri, J., but was reversed on appeal by Ramesam and Cornish, JJ.
5. This brings me now to the consideration of the important and difficult question of law raised by Mr. T.M. Krishna-swami Ayyar in the course of his very able argument. That question is whether the judgment of the Appellate Court must be deemed to be a judgment in rem, within the meaning of Section 41 of the Indian Evidence Act. If it is, it is conclusive and any other Court is precluded from re opening the same question. It is argued by Mr. T.M. Krishnaswami Ayyar that the finding of the Appellate Court that the debt claimed by L.V.N. Sastry as due to him from Kumaraswami Rao is true is a conclusive finding under Section 41 of the Indian Evidence Act. What has to be decided is whether the judgment of the Appellate Court confers upon or takes away from L.V.N. Sastry any "legal character." The decision of what is a "legal character" within the meaning of that section is not free from difficulty. Mr. T.M. Krishnaswami Ayyar contends that in insolvency proceedings a declaration that a person is a creditor in the insolvency confers upon him a "legal character," He draws a distinction between a person who is a creditor of an ordinary debtor not an insolvent, and the creditor of an insolvent and although he does not admit that the former does not possess a "legal character" he contends that the latter certainly does because directly the claims of a creditor in insolvency are recognised, the Insolvency Act confers upon him special rights and places upon him certain liabilities which he did not formerly possess or have placed upon him and that he thus becomes clothed with a "legal character." He has, of course, to establish that position for his client because his client was not a party to the insolvency proceedings. He has, therefore, to contend that the appellate judgment is a judgment in rem. Tha term "legal character" is not defined in the Evidence Act nor in any other Act and we are, therefore, driven to the consideration of cases where it has been held that a person possesses a "legal character" or status. One of these is K.P. Ramakrishna Pattar v. K.P. Narayana Pattar. That was a case under Section 42 of the Specific Relief Act. Under that section only a person entitled to any 'legal character" or to "any right to property" can institute a suit for a declaratory relief in respect of his title to such legal character or right to property and on page 82 Page of 46 M.L.J.--[Ed.] the Division Bench states :
We take it that a man's 'legal character' is the same thing as a man's status. 'A man's status or "legal character"is constituted by the attributes which the law attaches to him in his individual and personal capacity, the distinctive mark or dress, as it were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general.' According to Holland, the chief varieties of status among natural persons may be referred to the following Clauses (1) sex, (2) minority, (3) 'patriapotestas' and 'menus', (4) coverture, (5) celibacy, (6) mental defect, (7) bodily defect, (8) rank, caste and official position, (9) slavery, (l0) profession, (1l) civil death, (12) illegitimacy, (13) heresy, (14) foreign nationality, and (15) hostile nationality.
6. There must, of course, be other varieties such as for example, insolvency. To declare a man to be an insolvent is clearly to place beyond all doubt the status of that individual and it is conclusive as against the whole World. But it is a very different thing to say that to declare a person to be the creditor of an insolvent is to confer a status upon that creditor which is equally conclusive as against the whole world. Apart from an insolvency the creditor's position arises out of a contractual relationship. Does the mere fact that his relationship is recognised in the Insolvency Court confer upon him a status? I think that it would be most undesirable to extend the scope of Section 41 of the Indian Evidence Act and that the description "legal character" should receive a strict and limited construction. Mr. T.M. Krishnaswami Ayyar has referred to us to cases where a presumptive reversioner under the Hindu Law has been held to possess a 'legal character" [Sheoparsan Singh v. Ramanandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.) a decision of the Privy Council under Section 42 of the Specific Relief Act and a legatee or a beneficiary under a, Will has also been. Chinnaswami v. Hariharabadra 16 M. 380]. In the latter case it was held that the judgment of a Probate Court granting or refusing Probate is a judgment in rem and, therefore, the judgment of any other Court in a proceeding inter parte3 cannot be pleaded in bar of an investigation in the Probate Court as to the factum of the Will propounded in that Court. These decisions, though no doubt useful, do not, in my view, carry Mr. Krishnaswami Ayyar sufficiently far. On the other hand there is a decision of this Court which seems to me to place a very necessary limit on the scope of Section 41 of the Indian Evidence Act That is Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad.
662. There it was held by Sir Walter Schwabe, C.J. and Ramesam, J., that an order of an Insolvency Court refusing to adjudicate a person insolvent on the ground that he was not a member of a firm which had been declared insolvent is not a final order which conferred upon or took away from him any "legal character" within the meaning of Section 41 of the Evidence Act and hence is not a judgment in rem and that being a partner in a firm is not a "legal character' as contemplated by that section. On page 587 Page of 46 M.L.J.--[Ed.] Sir Walter Schwabe, C.J., states as follows :
In this case the way the Court in Rangoon arrived at its decision was by saying that Annamalai Ghetty was a member of the joint family and that he had disclaimed any interest in the joint family property as against his creditors, that there was no evidence before it that he was a partner and, therefore, it declared that he was not a partner. It would be a very remarkable thing if that is a binding decision on, all the world that a partnership did not exist. For instance, if a creditor, here or elsewhere, were taking proceedings against Annamalai on the basis of the partnership he could set up the decision of the Rangoon Oourt as a judgment in rem binding on the party here who was not a party in Rangoon. I do not think that was the intention of Section 41 at all.
7. This case, in my view, is one that is very much against Mr. Krishnaswami Ayyar's argument. If a partner does not possess a "legal character" then it is difficult to see how a creditor in an insolvency can be entitled to claim for himself such a character. The section does not use the words "legal right" but uses the words "legal character" and Mr. Krishnaswami Ayyar's argument in the main has been that a creditor has acquired a "legal right" which is a very different thing from saying that he has acquired a status which he can hold as against the whole world. In the absence of any authority for the contention that a creditor in an insolvency has a "legal character", I am not disposed to extend the scope of Section 41of the Indian Evidence Act to include such a person. Mr. Krishnaswami Ayyar in the alternative contends that the judgment of the Appellate Court declares L.V.N. Sastry to be entitled to a specific thing, namely the debt from the insolvent and that Section 41 of the Indian Evidence Act makes such a declaration conclusive. Quite apart from the fact that, in my view a debt is not a "specific thing" referred to in Section 41 of the Indian Evidence Act, there is the difficulty that the declaration of the Court must be that a person is entitled to that specific thing absolutely and not as against any specified person or in other words the declaration must be that L.V.N. Sastry is entitled to the sum be has claimed as against the whole world absolutely whereas the declaration is merely that he is entitled, to it as against the in-solven. Mr. Krishnaswami, Ayyar ia unable to point to anything in the Insolvency Act which enables the Insolvency Court to declare the title of any person to any specific thing absolutely and not merely as against another person and it is only in the former case that it will have the conclusive character as against the whole world. I have come to the conclusion, therefore, that neither the Tribunal nor this Court is precluded from going into the question of the genuineness or otherwise of L.V.N. Sastry's claim and I also make the observation that although it is true that the Appellate Court did not consider L.V.N. Sastry's claim not only on the footing of the judgment debt but also on the merits it was not, in my view, essential to consider to anything more than the former question. Ramesam, J., after holding that it is open to the Insolvency Court to go behind an ex parte decree and investigate the nature of the debt if there are grounds for so doing states:
Where there are no other creditors the reasons for examining into the judgment debt especially when the debtor himself allowed the opportunity he had to pass by becomes much less," and later on observes: "I do not think this jurisdiction of the Official Assignee to enquire into debts could be used as a device to escape the execution of a decree where the only debt of the insolvent is the decree and there are no other debts. It seeems to me that the insolvency jurisdiction should not be used as a device to evade execution of a decree which has become final and unimpeachable as in the present case.
8. After these observations it was unncces-eary to consider the matter any further and to examine also the question whether in fact there had been the debt upon which the ex parte decree was based. Therefore, in my view, every finding of fact after this point was not essential to the decision of the Appellate Court allowing L.V.N. Sastry's claim. Cornish, J., says:
9. "In my opinion these materials are not sufficient evidence either of collusion or of fraud or of miscarriage of justice," and it is quite clear, I think, that Cornish, J., based his decision chiefly on the grounds that there was not sufficient evidence to justify the Insolvency Court setting aside the ex parte decree.
10. There now remains to be considered whether the findings of the Tribunal upon the facts are to be accepted. The Tribunal has disbelieved the petitioner's case that the respondent was indebted to him in the sum of Rs. 2,500 as alleged but has found that the remittance of Rs, 1,300 to the petitioner by P. Subba Rao was in fact of the respondent's money and at the time he made the remittance he did so with the mental reservation that he should claim it back after everything was over though he did not say so to the petitioner, that at the time he made the remittance he was expecting some help from the petitioner in connection with his suit against Subramania Chetti, that the petitioner did not execute any promissory note in favour of P. Subba Rao, that the ex parte decree was fraudulently obtained by giving an address fcr service known to be not the correct address and on a false affidavit proving execution and that L.V.N. Sastry and P. Subba Rao had no motive of their own to resort to any fraudulent procedure and they must have done this at the respondent's instance and on his behalf. I will take the Tribunal's finding upon the first point to be correct and will now deal with the other findings.
11. But for the reasons I have already given, I am satisfied that the respondent was guilty of the graver acts. There remains to be considered only the punishment to be inflicted upon him. It is difficult to imagine any more dishonourable conduct than that of the respondent and but for two circumstances such conduct must have resulted in his being ordered to be struck off the rolls, These circumstances are, firstly, that the money sued for was as the Tribunal has found the :espondent's although the procedure adopted by him to recover it was wholly crooked and dishonourable, and, secondly, that there does seem to be some ground for believing that the petitioner was blackmailing the respondent and that this was the real reason why the money was sent to him. Taking these matters into consideration in my view the order of the Court should be that the respondent be suspended from practice for the period of 5 years.
12. Sundaram Chetty, J.--During the insolvency proceedings, the Official Assignee enquired into the claim made by L.V.N. Sastry on the strength of the ex parte decree obtained by him and rejected it as false (ride his report dated 11th January, 1929). The order of the Official Assignee was upheld by Kumaraswami Sastri, J., (Ex. R). Against that, an appeal was filed and it was disposed of bv Ramesam and Cornish, JJ.. (vide Ex. XIII). The learned Judges allowed the appeal holding that there were no adequate grounds for Vacating the ex parte decree passed against the insolvent and also stating that the debt must be regarded as proved. It is strenuously contended by Mr. T. M, Krishna-swami Ayyar on behalf of the respondent that that judgment of the Appellate Court in insolvency proceedings should be deemed to be a judgment in rem within Section 41 of the Indian Evidence Act, and as such conclusive, so as to preclude any other Court from reopening the same question. If this contention should prevail, the finding of the Appellate Court in its insolvency jurisdiction that the debt set up L.V.N. Sastry as due to him from the insolvency is true, should be taken to be conclusive. It is argued with great insistence that by reason of that judgment the legal character of L.V.N. Sastry as a creditor of the insolvent must be deemed to have been declared so as to be operative as a judgment in rem against all the world.
13. In order to decide this question, which is not free from difficulty, the true scope of Section 41 of the Evidence Act has to be understood. That section incorporates the law on the subject of "judgments in rem" as explained in the decision of Sir Barnes Peacock in Kanhaya Lall v. Radha Churn 7 W.R. 338. According to that section 'a final judgment, order or decree of a competent Court, in the exercise of probate, matrimonial, admiralty or insolvency jurisdiction, which confers upon or takes away, from any parson any legal character, or which declares any person to be entitled to any such character or to be entitled to any specific thing, not as against any specified person but absolutely, is relevant when the existence of any such legal character, or the title of any such person to any such thing, is relevant." The section further lays down that such judgment, order or decree is conclusive proof that the legal character conferred or declared accrued to that person at the time when such judgment, order or decree was pronounced and that anything to which it declares any person to be so entitled was the property of that person at that time. Such an effect seems to be of a limited character, and in order to make any such judgment, order or decree conclusive proof operating as a judgment in rem, what was conferred on or taken away from a person should be a legal character within the meaning of that section.
14. As observed by Messrs. Woodroffe and Ameer Ali in the Law of Evidence, one of the main difficulties has always been to ascertain some principle upon which to rest, this class of judgments so as to determine what cases fall within it. The principle is lucidly stated in Phipson's Law of Evidence (5th Edition) at page 387 as follows: "The principle of the conclusiv-eness of judgment in rem as regards persons is that public policy for the peace of society requires that matters of social status should not be left in continual doubt; and as regards things, that generally speaking, every one who can be affected by the decision may protect his interest by becoming a party to the proceedings. In addition to it, it has to be remembered that a decision in rem not merely declares the status of the person or thing but ipso facto renders it such as it is declared; thus a decree of divorce not only annuls the marriage but renders the wife feme sole; an adjudication in bankruptcy not only declares but constitutes the debtor a bankrupt; a sentence in a prize Court not merely declares the vessel prize but vests it in the captor." The expression "legal character" has not been defined in any Statute. Its meaning has to be understood in the light of the principles relating to judgments in rem which the Legislature must have had in view in framing this section. The same expression 'legal character" is found in Section 42 of the Specific Relief Act. That section says that only a person entitled to any legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or right to property. In construing the significance of that expression, a Division Bench of this, Court has observed in Ramakrishna, Pattar v. K.P. Narayana Pattar 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912 at page 82 Page of 46 M.L.J.--[Ed.] as follows: "We take it that a man's legal character is the same thing as a man's status. A man's status or legal character is constituted by the attributes which the law attaches to him in his individual and personal capacity the distinctive mark or dress as if were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general," The chief varieties of status as set forth in Holland's Jurisprudence are also mentioned in that decision as illustrations. Now, what is it that the judgment (Ex XIII) has declared? The claim of L.V.N. Sastry as a creditor of the insolvent was allowed: in other words, the debt alleged by him as due from the insolvent was found to be true.
15. Mr. Krishnaswami Ayyar in the course of his able argument contends that the declaration that L.V.N. Sastry is a creditor of the insolvent made by the Court in the exercise of insolvency jurisdiction confers upon him a legal character as contemplated in Section 41 of the Evidence Act. Ordinarily, the right of a creditor is to recover his debt from the debtor. That right arises from a contractual obligation. It cannot strictly be deemed to confer on him any status or legal character. It is however, urged that as soon as he is recognised as a creditor to the insolvent's estate, the law gives him a position out of which certain special rights and duties flow. By virtue of the attributes which the law attaches to him, it is argued that a legal character may be deemed to have been conferred on him. The decision in Rama Krishna Patter v. K.P. Nara-yana Pattar 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912 shows that a right claimed as arising out of a contractual obligation would not be a right to a legal character within the meaning of Section 42 of the Specific Relief Act. The grant of Probate by a Court in the exercise of Probate jurisdiction has been held to be conclusive proof of the truth of the Will which has the effect of declaring a person to be an executor, and that is conferring on him a legal character. This is indicated by the decision of the Privy Council in Sheoparsan Singh v. Ramanandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.). From the observations of their Lordships, it may also be taken that a presumptive revereioner under Hindu Law has a legal character entitling him to sue for a declaration under Section 42 of the Specific Relief Act. In Chinnaswami v. Hariharabadra 16 M. 380, it is stated that by the grant of Probate of a Will, the legatee or the beneficiary under the Will acquires a legal character. It has been held in the decision reported as Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662 that a declaration by the Insolvency Court that one is a partner or not a partner of a firm does not amount to the conferring of a legal character nor the taking away cf a legal character from a person within the meaning of Section 41 of the Indian Evidence Act. At page 587 Page of 46 M.L.J.--[Ed.] the learned Chief Justice observes that an order of the Insolvency Court refusing to adjudicate one Annamalai Chetty a bankrupt, on the ground that he was not a member of the firm which had been declared insolvent, is not an order conferring upon Annamalai Chetty or taking away from him any legal character within the meaning cf Section 41 of the Indian Evidence Act which would operate as a judgment in rem binding on all the world. This decision is, in my opinion, the nearest approach to the present case. It is argued that in consequence of the recognition of a person as a creditor to the insolvent's estate in the course of the insolvency proceedings certain special rights and liabilities are created by the Insolvency Act which may not be applicable to the case of an ordinary creditor. As he is clothed with certain statutory rights and obligations, it is urged, that he must be deemed to have been clothed with a legal character. The same thing can be said even in respect of a partner. If a partnership is created by contract among two or more persons, certain special rights and obligations are created by virtue of the provisions of the Indian Contract Act which are not traceable to any contract between the parties. It is not easy to distinguish the position of a partner from that of a scheduled creditor in insolvency, because certain rights and duties imposed by the Statute apply to both of them though these do not flow frcm any particular contract. If a partner has no legal character within the meaning of Section 41 of the Evidence Act as held in Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662, it is difficult to hold that a creditor whose debt is held to be proved by the Insolvency Court has acquired a legal character within the meaning of that section. If the expression "legal character" used in Section 41 denotes a status, the acceptance of Mr. Krishnaswami Ayyar's contention in the present case would amount to saying that 'legal character1 would mean a legal right, acquired not solely by a contract but by virtue of a statutory provision. That would be too broad a definition of 'legal character' and I do not think that such an unrestricted and wide scope could be given to that expression occurring in Section 41 which deals with judgments in rem, in the absence of any direct authority. The decisions in Chandreswar Prasad Narain Singh v. Bisheshwar Pratap Narain Singh 101 Ind. Cas. 289 : 5 Pat. 777 : A.I.R. 1927 Pat. 61 : 8 P.L.T. 510 and Kishoribhai Revadas v. Khomchodia Dhubia 25 Ind. Cas. 37 : 38 B. 427 : 16 Bom. L.R. 459 do not seem to be quite in point for purposes of the present question. I am, therefore, of opinion that the final judgment of the Insolvency Court (Ex. XII) cannot be deemed to have conferred a legal character on L.V.N. Sastry within the meaning of Section 41 of the Indian Evidence Act, in which case alone the declaration that he is a creditor of the insolvent would operate as a judgment in rem.
16. I may now refer to the alternative contention raised by Mr. Krishnaswami Iyer that L.V.N. Sastry must be taken to have become entitled to a specific thing by reason of the finding given by the Appellate Court in insolvency jurisdiction, Ex. XIII, Here again a difficulty arises in ascertaining what is meant by a 'specific thing' in this section. Prima facie, it connotes tangible moveable property. It would be somewhat strange if an actionable claim such as a right to recover a debt from another person can be deemed to come under 'any specific thing' mentioned in this section. It is not enough to show that under the judgment of the Insolvency Court one has become entitled to a specific thing, but his title to such a thing must have been declared not as against any specified person, but absolutely. So far as I could see, there is nothing in the Insolvency Act for declaring the title of any person to a specific thing in the manner provided for in Section 41 of the Evidence Act. The title to the specific thing should be declared absolutely and not merely as against another person and in such a case only it would have the conclusive character as against the world. Such declaration may be made in the exercise of admiralty jurisdiction. However reliance is placed upon a decision of the Allahabad High Court in Fitaram v. Jhujhar Singh 33 Ind. Cas. 798 In that decision, an adjudication by Insolvency Court as to the title of a claimant in respect of some houses crops and some moveable property, has been held to amount to conclusive proof of title in respect of the specific things claimed by the applicant within the meaning of Section 41 of the Evidence Act. That decision would no doubt be an authority, which would help the respondent in this case, provided a chope in action or a right to recover a debt could be brought under 'any specific thing' mentioned in Section 41. But it seems to me that even as a legal fiction, a right to recover a debt or a chose in action cannot be deemed to be a specific thing. It would be going too far if such an extended meaning is attached to it.
17. For the reasons mentioned above, I am of opinion that the final judgment Ex XIII does not amount to a judgment in rem within the meaning, of Section 41 of the Indian Evidence Act, so as to bind persons who were not parties or privies to that case. That being so, there is no legal bar to the Tribunal investigating into the matter a issue and coming to an independ ent conclusion on the merits. The mate rials for decision by the Insolvency Court do not appear to have been so full as in the present enquiry. The learned Judges of the Tribunal have bestowed great care and attention over this case and due weight must be attached to the conclusions arrived at by them I am clearly of opinion that the respondent's conduct in respect of the pro-ceedings taken against Kumaraswami Rao which resulted in the passing of the ex parte decree is by no means honourable or honest. That a member belonging to the honourable profession of law should have stooped to have recourse to such objec tionable and crooked methods is to be de-plored by all right minded men. In the exercise of the disciplinarry jurisdiction of the High Court a punishment which would meet the ends of justice and serve the interests of the profession has to be awarded. As for the punishment. I agree with my Lord in the order pronounced by him.
18. Stone J.--This case raises questions of fact and of law. The question of law is of some importance and one can be most conveniently considered after one question of fact has been examined. 1 accordingly consider first that question of fact which can be expressed as follows: Was the respondent the prime mover in a course of conduct which had for its purpose the securing of a judgment in proceedings (which may be referred to as theSastri proceedings) against the complainant with-out giving the complainant with-to enter any defence?
19. My conclusion on this question of fact is that the respondent was behind these proceedings. The respondentby his Counsel admits that these proceedings cannot be justified. They are tainted at the source and throughout. If the respondent an officer of the Court, either inspired them or was responsible for the course they took he was in my view (a view I gathered was taken by his Counsel who founded himself on the fact that his client was not connect ed with or aware of these proceedings) guilty of professional misconduct. I am further of the opinion that this question was one clearly raised by the petition herein.
20. On the merits, therefore, it follows that the report of the three experienced Advocates who having heard and seen the witnesses have arrived at the conclusion that the respondent is guilty of professional misconduct must be approved. The question remains whether the Court is precluded by Section 41 of the Evidence Act from questioning the liability which was the subject-matter of the Sastri suit.
21. The question of law arises as follows : Granted that the proceedings in the Sastri suit were objectionable, still the decree of culpability is much less if it appears that Sastri was an endorsee of a promissory note than if it appears that there was no note and no debt and consequently that the Sastri suit was a swindle from beginning to end. Thus although on the question of professional misconduct, I consider the vital question to be as above stated, when one comes to consider the punishment it is necessary to determine whether there was any debt at all. This issue it was argued the Court was precluded from considering because on appeal from the judgment of Kumaraswami Sastri, J., (which judgment upheld the decision of the Official Assignee disallowing the Sastri claim in the insolvency of the complainant) Ramesam and Cornish, JJ., allowed the claim and one of the Judges used the following words. Ramesam, J.,--"We think the debt must be regarded as proved and we allow the appeal." The debt here referred to is not the judgment debt'but the debt alleged to be due from the complainant herein which was the foundation of the Sastri suit. Cornish, J does not use any language which can be construed as amounting to a finding that the debt on which the Sastri case was found is established. He limits himself to the question at issue, viz., whether in all the circumstances the Court should exercise its discretion to go behind the judgment and he holds that there is no sufficient evidence of collusion, fraud or miscarriage of justice to justify the Court's taking such a course. That is he does not go behind the judgment. Following the judgments delivered by Ramesam and Cornish, JJ., a decree was entered. That decree is in my view the decree made in the case and is the document to be looked at when considering Section 41 of the Evidence Act. That decree decreed that, the "appellant's debt is proved," The debt in question was the judgment debt not the debt on which judgment was obtained ex parte. Clearly therefore, in no view of the law unless not the decree but the judgment is to be looked at and Ramesam, J.'s above quoted observation is to be treated as a judgment in rem; is this Court, in proceedings between the, complainant and the respondent herein, precluded from considering whether the allegation of indebtedness in the Sastri suit was well founded.
22. The argument, as I understand it, is tha't the judgment in question is a judgment declaring that a debt is owned to S by an insolvent, that accordingly it clothes S with a character he would not otherwise possess, for it makes him a creditor, and that although the term "legal character" does not embrace ordinary creditors it does embrace creditors in an insolvency, for such creditors, by the very fact of insolvency, have their rights varied by act of law. The argument thus amounts to this: that even an insolvency alters the legal character of the creditors of the insolvent so also it alters the legal character of the creditors of the insolvent. I do not agree. "Legal character" here means something equivalent to status., See Kanhaya Lxll v. Radha Churn 7 W.R. 338, Gangadhar Roy v. Umasoondery Dossee 7 W.R. 317 and Ramakrishna Patter v. K P. Narayana Patter 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912. Th legal character assigned to a person announces to all the world what the legal status of the person in question is. The rreaning of "legal character" must be narrowly construed for it must be remembered that an action in rem is not an action against a thing but an action availing against all the world. One must be cautious lest litigation between A and B ba allowed unduly to affect the rights of C. The sort of danger is clearly shown inOfficial Assignee of Madras v. C.R.M.O.R.S. Firm. The point there taken was similar to the point here taken and it failed. In Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662 at page 587 Page of 46 M.L.J.--[Ed.] it was held that a declaration that A is a partner in a firm is not a declaration of legal character. The extraordinary consequence that would flow if a declaration cf partnership or of non partnership in litigation between A and B were held to conclusively bind C is there pointed out. Yet it can hardly be doubted that the condition of being a partner much more nearly approaches status than the condition of being a creditor in an insolvency.
23. The decision of the Judicial Committee in Sheoparsan Singh v. Ramnandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.) does not assist. That case decides that where an action is founded upon the vital allegation of intestacy once it appears that a Probate Court has affirmed the Will of the alleged intestate the action fails in limine because that decision is binding and conclusive, there is, therefore, a Will, and there is, therefore, no intestacy The cases cited in Kishoribhai Revadas v. Khomchodia Dhubia 25 Ind. Cas. 37 : 38 B. 427 : 16 Bom. L.R. 459 and In re Ivory Hankin; Hankin v. Turner (1878) 10 Ch. D. 372 : 39 L.T. 611 : 27 W.R. 20, amount to no more than this; that where a Court of Probate has declared a Will to be valid or has made a declaration as to next of kin the fact of the Will or of the declared next of kin cannot be disputed in another Court. Neither case purports to construe Section 41. The case of Kathama Natchiar v. Dora-singa Tevar 2 I.A. 169 at p. 191 : 15 B.L.R. 83 : 23 W.R. 314 : 3 Sar. 456 : 3 Suther 106 : 6 M.H.O.R. 310 does not in my opinion touch the point under decision. It does not even establish that a reversioner is a person clothed with a legal character within the meaning of Section 42 of the Specific Relief Act, for it is obvious from Sir Barnes Peacock's rermarks at page 174. Page of 46 M.L.J.--[Ed.] that the suit for a declaration of title was one to which the reversioner was not in that case entitled. Sripatrao Sadashiv v. Shankarrao Sarnaik 127 Ind. Cas. 330 : 32 Bom. L.R. 207 at p. 209 : A.I.R. 1930 Bom. 331 is of assistance' only as showing that a declaratory sait is not maintainable by a creditor as such; that is that the condition of creditor is not a legal character. This, however, is conceded.
24. It is next argued that assuming that the judgment that the debt was proved does not confer a legal character, yet it declares a right to a specific thing and to a specific thing not against a specific person but absolutely. Upon this latter point Pitaram v. Jhujhar Singh 33 Ind. Cas. 798 relied upon. There the Allahabad High Court observed 'We think the decision of the Insolvency Court amounts to conclusive proof as to the title in respect of the specific things claimed by the applicant, not merely as against him, but absolutely within the meaning of Section 41 of the Evidence Act," There A was claiming certain specific articles which he a'leged were his but which being in the possession of the insolvent had been taken by the Receiver. He had two remedies (1) to apply to the Insolvency Court. (2) to institute a suit for recovery in the Munsif's Court. He pursued (1) and lost. He did not appeal but commenced suit No. (2). Obviously the earlier decision was binding on him on the ordinary principles of resjudicata, The above quoted observation would, therefore, appear to be obiter. I doubt whether a finding of a bankruptcy or any other Court in the contest between A and B as to whether certain property belongs to A amounts to anything more than a finding that as against B it belongs to A. I cannot believe that in such a contest the rights of C to such property can be conclusively determined. It is no use urging that under the Insolvency Rules C could afterwards come and claim. Ex hypothesi if the judgment in the suit between A and B is in rem and conclusive against strangers C would be met with a conclusive finding. I can well understand that in an admiralty action in rem against the ship there would be a declaration made effective against the whole world, but as at present advised I find it difficult to conceive how otherwise the judgment could declare title to a specific thing to be in A against the whole world as distinct from a specific parson. However that may be, in this case the joint does not ariee for I am clearly of the opinion that a decree declaring that A is entitled to a debt is not a declaration of title to a specific thing made not against a specific person but absolutely. By the very nature of the case by the time you have made the chose in action a specific thing (assuming that it can be regarded as a specific thing) to which I have doubts you have specified the debtor.
25. Finally I observe that a judgment in insolvency, declaring that the creditors' debt (i e a judgment debt) is a provable debt does not declare that an alleged debt which merged in that judgment debt is proved. In Chandreshwar Prasad Narain Singh v. Bisheshwar Pratab Narain Singh 101 Ind. Cas. 289 : 5 Pat. 777 : A.I.R. 1927 Pat. 61 : 8 P.L.T. 510 at page 817 it is observed that "all that is essential to the decision that the executor was entitled to Probate must be taken to have been conclusively determined." It is argued, therefore, that it was essential to the decision arrived at by Ramesam and Cornish, JJ, to hold that the alleged debt was proved and that, therefore, not only the judgment debt but the alleged debt which, was the foundation of the Sastri suit is conclusively established against the world. I am not to be taken as assenting to the above citation, but assuming that it is a correct statement it is not applicable, for it was not necessary for the Court in the insolvency proceedings to hold that the alleged debt in the Sastri proceedings was proved. Judgment could have been given without any such finding of fact and one of the learned Judges (Cornish, J,) gave such a judgment. But even had it been a necessary step I incline to the view that the observations to be found on page 343 of 7 W.R. Kanahaya Lall v. Radha Churn 7 W.R. 338 express the true position. Though it be necessary as a step to making a declaration which will operate in rem to find a fact that finding will not bind third parties in subsequent proceedings.
26. I am accordingly of the opinion that the Tribunal was at liberty to consider whether the alleged liability founded upon an alleged promissory note and sued for in the Sastri suit ever existed. On this issue of fact I see no reason for thinking that the Tribunal arrived at a false conclusion or one unsupported by evidence.
27. There remains the fact mentioned in the Report at page 76 lines 40 to 44 of the printed case that this is a stale complaint. Whether this is very material in considering the degree of delinquency is a matter of doubt. I concur in the view expressed by the Chief Justice as to the gravity of the offence and as to the proper punishment therefor.
Print Page
Madras High Court
In Re: P.C. Venkataramanayya ... vs Unknown on 8 January, 1931
Equivalent citations: 131 Ind Cas 817
Bench: H O Chetty, Stone
1. This case arises on a complaint filed by one P. Kumaraswami Rao. The Tribunal of the Bar Council to whom this complaint was referred for enquiry framed the following charge:
That between 1921 and 1923, you, P. C Venkataramanayya Pantulu now an Advocate of the High Court, Madras, and formerly a Vakil of the said Court taking advantage of a remittance in January, 1921, by you through one Piratla Subba Rao of a sum of Rs. 1,300 to P. Kumaraswami Rao in Madras on some other account and not by way of loan conspired with the eaid Subba Rao and one L, V.N. Sastry to prefer a false claim against the said Kumaraswami Rao through and in the name of the said L.V.N. Sastry by filing a suit O S. No. 282 of 1922 on the file of the District Munsif's Court at Cocanada as upon a promissory note alleged to have been executed by the said Kumaraswami Rao in favour of the said Subba Rao and to have been endorsed by the said Subba Rao in favour of the said L.V.N. Sastry and alleged subsequently to have been lost by the said L.V.N. Sastry and wilfully and fraudulently obtaining an ex parte decree against the said Kumaraswami Rao without proper service of summons and all this with the ulterior purpose of utilizing the same against the said Kumaraswami Rao who was then making some pecuniary claims against you; and further you had the said decree transferred to Madras for execution and had it, executed by arresting the said Kumaraswami Rao at or about the time he filed a suit against you in the Presidency Court of Small Causes, Madras, namely, Suit No. 9738 of 1923 and you have thereby made yourself guilty of misconduct which renders you unfit to continue in the profession.
2. The enquiry before the Tribunal has resulted in findings adverse to the Advocate. The Tribunal does not accept in its entirety the complaint of Kumaraswami Rao It disbelieves certain of his allegations. It, however, does not accept the re-spondent'a answers with regard to all important matters either alleged againet him or appearing in the course of the enquiry to require an answer. It does not accept the whole of the complainant's case and only accepts a part of the respondent's.
3. The history of this case is as follows: Kumaraswami Rao was admittedly on terms of close friendship with, the respondent from about 1916 up to 1921 except for a short period in 1918 to 1919. He seems to have been more or less a dependant of the respondent and it seems clear that at no time was his financial position a good one. One D. Seshagiri Rao an Advocate of the High Court was also at this time very friendly with the respondent and appears to have been sharing the same business premises. In March, 1921, arising out of some business transactions the respondent and Seshagiri Rao filed a suit in the High Court against one Subramaniam Chetty claiming Rs. 7,000 from him. Subramaniam Chetty then filed a suit against the respondent in the High Court and another suit against Seshagiri Rao also in the High., Court setting up the case in each suit that the respondent and Seshagiri Rao owned him sums of money. All the three suits ended in a victory for the respondent and Sesha-giri Rao but the appeals against the decrees in those suits ended in the appeals being allowed and the suits ordered to be remanded for fresh trial. They were subsequently compromised. It seems tobe a fact that Kumaraswami Rao was interesting himself in those suits and it appears to have been supposed that he was in a position to assist the respondent in the litigation and it is admitted by the respondent that he believed that Kumara-swami Rao might be useful to him and that he felt that he had to keep him in good humour. It seems probable that it was supposed by the respondent that Kumaraswami Rao was in possession of correspondence or documents the production or suppression of which might assist the parties to the litigation. At the latter end of January 1921, Kumaraswami Rao after an urgent request by him to the respondent received, by the telegraphic money order sums amounting to Rs. 1,300 and it does not appear to be disputed, by Kumaraswami Rao that the money was sent to him by one P. Subba Rao. Whose money this really was is one of the important matters in this case. It is represented by Kumaraswami Rao that this money was due to him from respondent on account of business transactions although this version is disbelieved by the Tribunal and was the respondent's money and not Subba Rao. On the other hand the respondent alleges that this money was P. Subba Rao's money and that it was lent by P. Subba Rao to Kumaraswami Rao at the request of the respondent. According to the respondent, this, therefore, was a loan from P. Subba Rao to the complainant and he (the respondent) had nothing whatever to do with it beyond requesting Subba Rao to lend the money to Kumaraswami Rao. The Tribunal has disbelieved the respondent's allegation that the money was Subba Rao's and also his denial that it was his (the respondent's). It is alleged by the respondent that after the receipt of the money by Kumaraswami Rao the latter executed at Madras a promissory note in favour of Subba Rao dated the 28th January, 1221, payable on demand and bearing interest at 18 per cent, per annum. This allegation has been disbelieved'by the Tribunal and the history with regard to this alleged promissory note is another of the important matters in this case. It is a curious one. It is alleged that the pro roe was assigned by endorsement to one L.V.N. Sastry on the 29th January, 1922. L.V.N. Sastry is a near relative by marriage of the respondent and a notice of demand was sent by a Pleader at Cocanada Mr. Kameswara Rao on behalf of L.V.N. Sastry addressed to the petitioner at 46, Thambu Cnetty Street, Madras. This notice was returned undelivered through the Dead Letter Office in February, 1922. The alleged promissory note is stated on the respondent's behalf to have been shown to Mr. Kameswara Rao the Pleader for the purpose of the before-mentioned notice and thiB statement is supported by the evidence of that gentleman and it may well be that a promissory-note purporting to have been executed by the petitioner was shown to him. It is alleged that after being shown to Mr. Kameswara Rao it was lost by L.V.N. Sastry about the 14th February, I922, at the Bezwada Railway Station and L.V.N. Sastry had to file a suit O.S. No. 288 of 1922, in the District Munsif'e Court of Cocanada, upon the footing of a lost promissory-rote. The suit was filed against Kumaraswami Rao, as the first defendant and P. Subba Rao, the endorser, as the second defendant. The address of Kumaraswami Rao is given as 46, Thambu Chetty Street. The first summons to Kumaraswami Rao was returned unserved as Kumaraswami Rao was not then at the address given, namely, 46,, Thambu Chetty Street. The date of the summons is 29th June, 1922. The endorsement on it by the Bailiff is as follows:
I went to the within-mentioned premises in search of the defendant where he, could not be found but I found, it is a hotel, The hotel keeper told me that there is no person living in that hotel by the name of the defendant. So 1 posted a copy of summons on the outer-door of the house No. 46, Thambu Chetty Street, George Town, at 10 a m., on the 9th July, 1922.
4. A fresh summon was ordered on the 14th August and it was addressed to the defendant Kumaraswami Rao, at the same address and was again returned unserved with a similar endorsement by the Bailiff to that which appears on the earlier summons. It must be noted that P. Subba Rao the second defendant filed a written statement contesting the suit although on what ground it is neither stated nor apparent. L.V.N. Sastry then obtained a decree ex parte against Kumara swami Rao in this suit but gave up his claim against Subba Rao the second defendant who did not Dress for costs. In suoport of his claim L.V.N. Sastry filed an affidavit in which he stated that he was present when Kumaraswami Rao, the first defendant executed the promissory note in favour of the second defendant, that he saw Kumaraswami Rao sign and that he knew his signature. The statement that he was present when the first defendant executed the promissory note and that he saw him sign it has been admitted by L.V.N. Sastry in his evidence before the Tribunal to be untrue. The decree in the suit which is dated the 22nd September, 1922, is as against the first defendant Kumaraswami Rao alone. As the promissory note was alleged to have been lost L.V.N. Sastry the plaintiff filed an indemnity bond in order to obtain his decree. This decree was subsequently transferred to the Court of Small Causes, Madras, for execution. On 9th August, 1923, L.V.N. Sastry applied for a warrant of arrest without notice against Kumaraswami Rao, and the application is supported by an affidavit dated the 8th August. Therein it is stated that the first defendant (Kumaraswami Rao) "is not possessed of any immoveable property or moveable property sufficient to satisfy the decree" and is '"unemployed." By this time the decretal amount had with interest risen to Rs. 1,930. 8 0, A warrant for the arrest of Kumaraswami Rao was issued and ha was arrested. When he was arrested on the, 20th August he appeared before the Court and got himself adjudicated an insolvent. It must be noted that Kumara-swarni Rao had not taken any steps up to then to set aside the ex parte decree passed against him in the District Munsif's Court of Cocanada. He says that he only learnt of this decree when the warrant of arrest was issued against him. L.V.N. Sastry filed his claim before the Official Assignee based on the ex parte decree obtained by him against Kumaraswami Rao. Kumaraswami Rao repudiated the ex parte decree as falsely and fraudulently obtained. The Official Assignee enquired into that claim and made his report on 11th January, 1929, rejecting it as a false and on appeal from the Official Assignee's order Kumaraswami Sastri, J., upheld the Official Assignee's order on the 22nd January, 1929. Against this an appeal was filed O.S.A. No. 25 of 1929. This appeal was disposed of by our learned brothers Ramesam and Cornish, JJ., whilst this matter was under enquiry by the Tribunal. The appeal was allowed and L.V.N. Sastry's claim based on the ex parte decree in the Cocanada suit and also on the merits was allowed: and with regard to this appellate judgment a legal contention has been raised both here and before the Tribunal which has resulted in an argument which has necessarily occupied a great deal of our time. It has been argued that this last j udgment is conclusive of the matter now before us and that it was neither open to the Tribunal nor is it open to us now to go into the question of the truth or otherwise of L.V.N. Sastry's claim. Before dealing with that contention, there are some other matters to which reference must be made. It is quite clear that at the time when Kumaraswami Rao received the remittance of Rs. 1,300 he was on friendly terms with or at any rate willing to assist the respondent in his litigation but his attitude changed later on. It is a fact that he was cited as a witness in Subramaniah Chetty's suits for Subramania Chetty against Seshagiri Rao and the respondent, though he was eventually not examined. In connection with Kumaraswami Rao's changed attitude it must be observed that on the 5th April, 1921, Kumaraswami Rao put forward an alleged claim against the respondent for payment of Rs. 1,200 the balance stated to be due to him in connection with transactions he alleged he had had with the respondent for the previous 21/2 years. The respondent disputed the claim as being false and fraudulent and made a counter demand for Rs. 357 against Kumaraswami Rao. It is alleged by Kumaraswami Rao that there immediately followed a settlement of his claim and the respondent's claim in the presence of Mr. Ramachandra Raju the respondent's then Vakil and Mr. Seehagiri Rao and it is said that the respondent agreed to pay Kumaraswami Rao Rs. 600 in full settlement. Kumaraswami Rao gave a notice of claim on the alleged settlement already referred to on 18th November, 1922, (Ex. C) and on the 7th August, 1923, the Official Assignee filed a suit against the respondent claiming from him the Rs. 600 agreed to be paid by him under that settlement. The plaint in the suit is Ex. J. Although a previous warrant for the arrest of Kumaraswami Rao had been taken out, it was not executed, It is significant that steps to arrest Kumara-Swami Rao were again taken immediately the Official Assignee filed the before-mentioned sait in the Court of Small Causes. The position, therefore, was that Kumaraswami Rao at one time a great friend of the respondent and able to assist him in hia litigation or embarrass him in it found himself under arrest at the instance of L.V.N. Sastry in execution of the decree in the District Munsif's Court of Cocanada and sought the protection of the Insolvency Court; and when L.V.N. Sastry's claim was investigated it was rejected by the Official Assignee and that decision was upheld by Kumaraswami Sastri, J., but was reversed on appeal by Ramesam and Cornish, JJ.
5. This brings me now to the consideration of the important and difficult question of law raised by Mr. T.M. Krishna-swami Ayyar in the course of his very able argument. That question is whether the judgment of the Appellate Court must be deemed to be a judgment in rem, within the meaning of Section 41 of the Indian Evidence Act. If it is, it is conclusive and any other Court is precluded from re opening the same question. It is argued by Mr. T.M. Krishnaswami Ayyar that the finding of the Appellate Court that the debt claimed by L.V.N. Sastry as due to him from Kumaraswami Rao is true is a conclusive finding under Section 41 of the Indian Evidence Act. What has to be decided is whether the judgment of the Appellate Court confers upon or takes away from L.V.N. Sastry any "legal character." The decision of what is a "legal character" within the meaning of that section is not free from difficulty. Mr. T.M. Krishnaswami Ayyar contends that in insolvency proceedings a declaration that a person is a creditor in the insolvency confers upon him a "legal character," He draws a distinction between a person who is a creditor of an ordinary debtor not an insolvent, and the creditor of an insolvent and although he does not admit that the former does not possess a "legal character" he contends that the latter certainly does because directly the claims of a creditor in insolvency are recognised, the Insolvency Act confers upon him special rights and places upon him certain liabilities which he did not formerly possess or have placed upon him and that he thus becomes clothed with a "legal character." He has, of course, to establish that position for his client because his client was not a party to the insolvency proceedings. He has, therefore, to contend that the appellate judgment is a judgment in rem. Tha term "legal character" is not defined in the Evidence Act nor in any other Act and we are, therefore, driven to the consideration of cases where it has been held that a person possesses a "legal character" or status. One of these is K.P. Ramakrishna Pattar v. K.P. Narayana Pattar. That was a case under Section 42 of the Specific Relief Act. Under that section only a person entitled to any 'legal character" or to "any right to property" can institute a suit for a declaratory relief in respect of his title to such legal character or right to property and on page 82 Page of 46 M.L.J.--[Ed.] the Division Bench states :
We take it that a man's 'legal character' is the same thing as a man's status. 'A man's status or "legal character"is constituted by the attributes which the law attaches to him in his individual and personal capacity, the distinctive mark or dress, as it were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general.' According to Holland, the chief varieties of status among natural persons may be referred to the following Clauses (1) sex, (2) minority, (3) 'patriapotestas' and 'menus', (4) coverture, (5) celibacy, (6) mental defect, (7) bodily defect, (8) rank, caste and official position, (9) slavery, (l0) profession, (1l) civil death, (12) illegitimacy, (13) heresy, (14) foreign nationality, and (15) hostile nationality.
6. There must, of course, be other varieties such as for example, insolvency. To declare a man to be an insolvent is clearly to place beyond all doubt the status of that individual and it is conclusive as against the whole World. But it is a very different thing to say that to declare a person to be the creditor of an insolvent is to confer a status upon that creditor which is equally conclusive as against the whole world. Apart from an insolvency the creditor's position arises out of a contractual relationship. Does the mere fact that his relationship is recognised in the Insolvency Court confer upon him a status? I think that it would be most undesirable to extend the scope of Section 41 of the Indian Evidence Act and that the description "legal character" should receive a strict and limited construction. Mr. T.M. Krishnaswami Ayyar has referred to us to cases where a presumptive reversioner under the Hindu Law has been held to possess a 'legal character" [Sheoparsan Singh v. Ramanandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.) a decision of the Privy Council under Section 42 of the Specific Relief Act and a legatee or a beneficiary under a, Will has also been. Chinnaswami v. Hariharabadra 16 M. 380]. In the latter case it was held that the judgment of a Probate Court granting or refusing Probate is a judgment in rem and, therefore, the judgment of any other Court in a proceeding inter parte3 cannot be pleaded in bar of an investigation in the Probate Court as to the factum of the Will propounded in that Court. These decisions, though no doubt useful, do not, in my view, carry Mr. Krishnaswami Ayyar sufficiently far. On the other hand there is a decision of this Court which seems to me to place a very necessary limit on the scope of Section 41 of the Indian Evidence Act That is Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad.
662. There it was held by Sir Walter Schwabe, C.J. and Ramesam, J., that an order of an Insolvency Court refusing to adjudicate a person insolvent on the ground that he was not a member of a firm which had been declared insolvent is not a final order which conferred upon or took away from him any "legal character" within the meaning of Section 41 of the Evidence Act and hence is not a judgment in rem and that being a partner in a firm is not a "legal character' as contemplated by that section. On page 587 Page of 46 M.L.J.--[Ed.] Sir Walter Schwabe, C.J., states as follows :
In this case the way the Court in Rangoon arrived at its decision was by saying that Annamalai Ghetty was a member of the joint family and that he had disclaimed any interest in the joint family property as against his creditors, that there was no evidence before it that he was a partner and, therefore, it declared that he was not a partner. It would be a very remarkable thing if that is a binding decision on, all the world that a partnership did not exist. For instance, if a creditor, here or elsewhere, were taking proceedings against Annamalai on the basis of the partnership he could set up the decision of the Rangoon Oourt as a judgment in rem binding on the party here who was not a party in Rangoon. I do not think that was the intention of Section 41 at all.
7. This case, in my view, is one that is very much against Mr. Krishnaswami Ayyar's argument. If a partner does not possess a "legal character" then it is difficult to see how a creditor in an insolvency can be entitled to claim for himself such a character. The section does not use the words "legal right" but uses the words "legal character" and Mr. Krishnaswami Ayyar's argument in the main has been that a creditor has acquired a "legal right" which is a very different thing from saying that he has acquired a status which he can hold as against the whole world. In the absence of any authority for the contention that a creditor in an insolvency has a "legal character", I am not disposed to extend the scope of Section 41of the Indian Evidence Act to include such a person. Mr. Krishnaswami Ayyar in the alternative contends that the judgment of the Appellate Court declares L.V.N. Sastry to be entitled to a specific thing, namely the debt from the insolvent and that Section 41 of the Indian Evidence Act makes such a declaration conclusive. Quite apart from the fact that, in my view a debt is not a "specific thing" referred to in Section 41 of the Indian Evidence Act, there is the difficulty that the declaration of the Court must be that a person is entitled to that specific thing absolutely and not as against any specified person or in other words the declaration must be that L.V.N. Sastry is entitled to the sum be has claimed as against the whole world absolutely whereas the declaration is merely that he is entitled, to it as against the in-solven. Mr. Krishnaswami, Ayyar ia unable to point to anything in the Insolvency Act which enables the Insolvency Court to declare the title of any person to any specific thing absolutely and not merely as against another person and it is only in the former case that it will have the conclusive character as against the whole world. I have come to the conclusion, therefore, that neither the Tribunal nor this Court is precluded from going into the question of the genuineness or otherwise of L.V.N. Sastry's claim and I also make the observation that although it is true that the Appellate Court did not consider L.V.N. Sastry's claim not only on the footing of the judgment debt but also on the merits it was not, in my view, essential to consider to anything more than the former question. Ramesam, J., after holding that it is open to the Insolvency Court to go behind an ex parte decree and investigate the nature of the debt if there are grounds for so doing states:
Where there are no other creditors the reasons for examining into the judgment debt especially when the debtor himself allowed the opportunity he had to pass by becomes much less," and later on observes: "I do not think this jurisdiction of the Official Assignee to enquire into debts could be used as a device to escape the execution of a decree where the only debt of the insolvent is the decree and there are no other debts. It seeems to me that the insolvency jurisdiction should not be used as a device to evade execution of a decree which has become final and unimpeachable as in the present case.
8. After these observations it was unncces-eary to consider the matter any further and to examine also the question whether in fact there had been the debt upon which the ex parte decree was based. Therefore, in my view, every finding of fact after this point was not essential to the decision of the Appellate Court allowing L.V.N. Sastry's claim. Cornish, J., says:
9. "In my opinion these materials are not sufficient evidence either of collusion or of fraud or of miscarriage of justice," and it is quite clear, I think, that Cornish, J., based his decision chiefly on the grounds that there was not sufficient evidence to justify the Insolvency Court setting aside the ex parte decree.
10. There now remains to be considered whether the findings of the Tribunal upon the facts are to be accepted. The Tribunal has disbelieved the petitioner's case that the respondent was indebted to him in the sum of Rs. 2,500 as alleged but has found that the remittance of Rs, 1,300 to the petitioner by P. Subba Rao was in fact of the respondent's money and at the time he made the remittance he did so with the mental reservation that he should claim it back after everything was over though he did not say so to the petitioner, that at the time he made the remittance he was expecting some help from the petitioner in connection with his suit against Subramania Chetti, that the petitioner did not execute any promissory note in favour of P. Subba Rao, that the ex parte decree was fraudulently obtained by giving an address fcr service known to be not the correct address and on a false affidavit proving execution and that L.V.N. Sastry and P. Subba Rao had no motive of their own to resort to any fraudulent procedure and they must have done this at the respondent's instance and on his behalf. I will take the Tribunal's finding upon the first point to be correct and will now deal with the other findings.
11. But for the reasons I have already given, I am satisfied that the respondent was guilty of the graver acts. There remains to be considered only the punishment to be inflicted upon him. It is difficult to imagine any more dishonourable conduct than that of the respondent and but for two circumstances such conduct must have resulted in his being ordered to be struck off the rolls, These circumstances are, firstly, that the money sued for was as the Tribunal has found the :espondent's although the procedure adopted by him to recover it was wholly crooked and dishonourable, and, secondly, that there does seem to be some ground for believing that the petitioner was blackmailing the respondent and that this was the real reason why the money was sent to him. Taking these matters into consideration in my view the order of the Court should be that the respondent be suspended from practice for the period of 5 years.
12. Sundaram Chetty, J.--During the insolvency proceedings, the Official Assignee enquired into the claim made by L.V.N. Sastry on the strength of the ex parte decree obtained by him and rejected it as false (ride his report dated 11th January, 1929). The order of the Official Assignee was upheld by Kumaraswami Sastri, J., (Ex. R). Against that, an appeal was filed and it was disposed of bv Ramesam and Cornish, JJ.. (vide Ex. XIII). The learned Judges allowed the appeal holding that there were no adequate grounds for Vacating the ex parte decree passed against the insolvent and also stating that the debt must be regarded as proved. It is strenuously contended by Mr. T. M, Krishna-swami Ayyar on behalf of the respondent that that judgment of the Appellate Court in insolvency proceedings should be deemed to be a judgment in rem within Section 41 of the Indian Evidence Act, and as such conclusive, so as to preclude any other Court from reopening the same question. If this contention should prevail, the finding of the Appellate Court in its insolvency jurisdiction that the debt set up L.V.N. Sastry as due to him from the insolvency is true, should be taken to be conclusive. It is argued with great insistence that by reason of that judgment the legal character of L.V.N. Sastry as a creditor of the insolvent must be deemed to have been declared so as to be operative as a judgment in rem against all the world.
13. In order to decide this question, which is not free from difficulty, the true scope of Section 41 of the Evidence Act has to be understood. That section incorporates the law on the subject of "judgments in rem" as explained in the decision of Sir Barnes Peacock in Kanhaya Lall v. Radha Churn 7 W.R. 338. According to that section 'a final judgment, order or decree of a competent Court, in the exercise of probate, matrimonial, admiralty or insolvency jurisdiction, which confers upon or takes away, from any parson any legal character, or which declares any person to be entitled to any such character or to be entitled to any specific thing, not as against any specified person but absolutely, is relevant when the existence of any such legal character, or the title of any such person to any such thing, is relevant." The section further lays down that such judgment, order or decree is conclusive proof that the legal character conferred or declared accrued to that person at the time when such judgment, order or decree was pronounced and that anything to which it declares any person to be so entitled was the property of that person at that time. Such an effect seems to be of a limited character, and in order to make any such judgment, order or decree conclusive proof operating as a judgment in rem, what was conferred on or taken away from a person should be a legal character within the meaning of that section.
14. As observed by Messrs. Woodroffe and Ameer Ali in the Law of Evidence, one of the main difficulties has always been to ascertain some principle upon which to rest, this class of judgments so as to determine what cases fall within it. The principle is lucidly stated in Phipson's Law of Evidence (5th Edition) at page 387 as follows: "The principle of the conclusiv-eness of judgment in rem as regards persons is that public policy for the peace of society requires that matters of social status should not be left in continual doubt; and as regards things, that generally speaking, every one who can be affected by the decision may protect his interest by becoming a party to the proceedings. In addition to it, it has to be remembered that a decision in rem not merely declares the status of the person or thing but ipso facto renders it such as it is declared; thus a decree of divorce not only annuls the marriage but renders the wife feme sole; an adjudication in bankruptcy not only declares but constitutes the debtor a bankrupt; a sentence in a prize Court not merely declares the vessel prize but vests it in the captor." The expression "legal character" has not been defined in any Statute. Its meaning has to be understood in the light of the principles relating to judgments in rem which the Legislature must have had in view in framing this section. The same expression 'legal character" is found in Section 42 of the Specific Relief Act. That section says that only a person entitled to any legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or to any right to property can institute a suit for a declaratory relief in respect of his title to such legal character or right to property. In construing the significance of that expression, a Division Bench of this, Court has observed in Ramakrishna, Pattar v. K.P. Narayana Pattar 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912 at page 82 Page of 46 M.L.J.--[Ed.] as follows: "We take it that a man's legal character is the same thing as a man's status. A man's status or legal character is constituted by the attributes which the law attaches to him in his individual and personal capacity the distinctive mark or dress as if were, with which the law clothes him apart from the attributes which may be said to belong to normal humanity in general," The chief varieties of status as set forth in Holland's Jurisprudence are also mentioned in that decision as illustrations. Now, what is it that the judgment (Ex XIII) has declared? The claim of L.V.N. Sastry as a creditor of the insolvent was allowed: in other words, the debt alleged by him as due from the insolvent was found to be true.
15. Mr. Krishnaswami Ayyar in the course of his able argument contends that the declaration that L.V.N. Sastry is a creditor of the insolvent made by the Court in the exercise of insolvency jurisdiction confers upon him a legal character as contemplated in Section 41 of the Evidence Act. Ordinarily, the right of a creditor is to recover his debt from the debtor. That right arises from a contractual obligation. It cannot strictly be deemed to confer on him any status or legal character. It is however, urged that as soon as he is recognised as a creditor to the insolvent's estate, the law gives him a position out of which certain special rights and duties flow. By virtue of the attributes which the law attaches to him, it is argued that a legal character may be deemed to have been conferred on him. The decision in Rama Krishna Patter v. K.P. Nara-yana Pattar 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912 shows that a right claimed as arising out of a contractual obligation would not be a right to a legal character within the meaning of Section 42 of the Specific Relief Act. The grant of Probate by a Court in the exercise of Probate jurisdiction has been held to be conclusive proof of the truth of the Will which has the effect of declaring a person to be an executor, and that is conferring on him a legal character. This is indicated by the decision of the Privy Council in Sheoparsan Singh v. Ramanandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.). From the observations of their Lordships, it may also be taken that a presumptive revereioner under Hindu Law has a legal character entitling him to sue for a declaration under Section 42 of the Specific Relief Act. In Chinnaswami v. Hariharabadra 16 M. 380, it is stated that by the grant of Probate of a Will, the legatee or the beneficiary under the Will acquires a legal character. It has been held in the decision reported as Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662 that a declaration by the Insolvency Court that one is a partner or not a partner of a firm does not amount to the conferring of a legal character nor the taking away cf a legal character from a person within the meaning of Section 41 of the Indian Evidence Act. At page 587 Page of 46 M.L.J.--[Ed.] the learned Chief Justice observes that an order of the Insolvency Court refusing to adjudicate one Annamalai Chetty a bankrupt, on the ground that he was not a member of the firm which had been declared insolvent, is not an order conferring upon Annamalai Chetty or taking away from him any legal character within the meaning cf Section 41 of the Indian Evidence Act which would operate as a judgment in rem binding on all the world. This decision is, in my opinion, the nearest approach to the present case. It is argued that in consequence of the recognition of a person as a creditor to the insolvent's estate in the course of the insolvency proceedings certain special rights and liabilities are created by the Insolvency Act which may not be applicable to the case of an ordinary creditor. As he is clothed with certain statutory rights and obligations, it is urged, that he must be deemed to have been clothed with a legal character. The same thing can be said even in respect of a partner. If a partnership is created by contract among two or more persons, certain special rights and obligations are created by virtue of the provisions of the Indian Contract Act which are not traceable to any contract between the parties. It is not easy to distinguish the position of a partner from that of a scheduled creditor in insolvency, because certain rights and duties imposed by the Statute apply to both of them though these do not flow frcm any particular contract. If a partner has no legal character within the meaning of Section 41 of the Evidence Act as held in Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662, it is difficult to hold that a creditor whose debt is held to be proved by the Insolvency Court has acquired a legal character within the meaning of that section. If the expression "legal character" used in Section 41 denotes a status, the acceptance of Mr. Krishnaswami Ayyar's contention in the present case would amount to saying that 'legal character1 would mean a legal right, acquired not solely by a contract but by virtue of a statutory provision. That would be too broad a definition of 'legal character' and I do not think that such an unrestricted and wide scope could be given to that expression occurring in Section 41 which deals with judgments in rem, in the absence of any direct authority. The decisions in Chandreswar Prasad Narain Singh v. Bisheshwar Pratap Narain Singh 101 Ind. Cas. 289 : 5 Pat. 777 : A.I.R. 1927 Pat. 61 : 8 P.L.T. 510 and Kishoribhai Revadas v. Khomchodia Dhubia 25 Ind. Cas. 37 : 38 B. 427 : 16 Bom. L.R. 459 do not seem to be quite in point for purposes of the present question. I am, therefore, of opinion that the final judgment of the Insolvency Court (Ex. XII) cannot be deemed to have conferred a legal character on L.V.N. Sastry within the meaning of Section 41 of the Indian Evidence Act, in which case alone the declaration that he is a creditor of the insolvent would operate as a judgment in rem.
16. I may now refer to the alternative contention raised by Mr. Krishnaswami Iyer that L.V.N. Sastry must be taken to have become entitled to a specific thing by reason of the finding given by the Appellate Court in insolvency jurisdiction, Ex. XIII, Here again a difficulty arises in ascertaining what is meant by a 'specific thing' in this section. Prima facie, it connotes tangible moveable property. It would be somewhat strange if an actionable claim such as a right to recover a debt from another person can be deemed to come under 'any specific thing' mentioned in this section. It is not enough to show that under the judgment of the Insolvency Court one has become entitled to a specific thing, but his title to such a thing must have been declared not as against any specified person, but absolutely. So far as I could see, there is nothing in the Insolvency Act for declaring the title of any person to a specific thing in the manner provided for in Section 41 of the Evidence Act. The title to the specific thing should be declared absolutely and not merely as against another person and in such a case only it would have the conclusive character as against the world. Such declaration may be made in the exercise of admiralty jurisdiction. However reliance is placed upon a decision of the Allahabad High Court in Fitaram v. Jhujhar Singh 33 Ind. Cas. 798 In that decision, an adjudication by Insolvency Court as to the title of a claimant in respect of some houses crops and some moveable property, has been held to amount to conclusive proof of title in respect of the specific things claimed by the applicant within the meaning of Section 41 of the Evidence Act. That decision would no doubt be an authority, which would help the respondent in this case, provided a chope in action or a right to recover a debt could be brought under 'any specific thing' mentioned in Section 41. But it seems to me that even as a legal fiction, a right to recover a debt or a chose in action cannot be deemed to be a specific thing. It would be going too far if such an extended meaning is attached to it.
17. For the reasons mentioned above, I am of opinion that the final judgment Ex XIII does not amount to a judgment in rem within the meaning, of Section 41 of the Indian Evidence Act, so as to bind persons who were not parties or privies to that case. That being so, there is no legal bar to the Tribunal investigating into the matter a issue and coming to an independ ent conclusion on the merits. The mate rials for decision by the Insolvency Court do not appear to have been so full as in the present enquiry. The learned Judges of the Tribunal have bestowed great care and attention over this case and due weight must be attached to the conclusions arrived at by them I am clearly of opinion that the respondent's conduct in respect of the pro-ceedings taken against Kumaraswami Rao which resulted in the passing of the ex parte decree is by no means honourable or honest. That a member belonging to the honourable profession of law should have stooped to have recourse to such objec tionable and crooked methods is to be de-plored by all right minded men. In the exercise of the disciplinarry jurisdiction of the High Court a punishment which would meet the ends of justice and serve the interests of the profession has to be awarded. As for the punishment. I agree with my Lord in the order pronounced by him.
18. Stone J.--This case raises questions of fact and of law. The question of law is of some importance and one can be most conveniently considered after one question of fact has been examined. 1 accordingly consider first that question of fact which can be expressed as follows: Was the respondent the prime mover in a course of conduct which had for its purpose the securing of a judgment in proceedings (which may be referred to as theSastri proceedings) against the complainant with-out giving the complainant with-to enter any defence?
19. My conclusion on this question of fact is that the respondent was behind these proceedings. The respondentby his Counsel admits that these proceedings cannot be justified. They are tainted at the source and throughout. If the respondent an officer of the Court, either inspired them or was responsible for the course they took he was in my view (a view I gathered was taken by his Counsel who founded himself on the fact that his client was not connect ed with or aware of these proceedings) guilty of professional misconduct. I am further of the opinion that this question was one clearly raised by the petition herein.
20. On the merits, therefore, it follows that the report of the three experienced Advocates who having heard and seen the witnesses have arrived at the conclusion that the respondent is guilty of professional misconduct must be approved. The question remains whether the Court is precluded by Section 41 of the Evidence Act from questioning the liability which was the subject-matter of the Sastri suit.
21. The question of law arises as follows : Granted that the proceedings in the Sastri suit were objectionable, still the decree of culpability is much less if it appears that Sastri was an endorsee of a promissory note than if it appears that there was no note and no debt and consequently that the Sastri suit was a swindle from beginning to end. Thus although on the question of professional misconduct, I consider the vital question to be as above stated, when one comes to consider the punishment it is necessary to determine whether there was any debt at all. This issue it was argued the Court was precluded from considering because on appeal from the judgment of Kumaraswami Sastri, J., (which judgment upheld the decision of the Official Assignee disallowing the Sastri claim in the insolvency of the complainant) Ramesam and Cornish, JJ., allowed the claim and one of the Judges used the following words. Ramesam, J.,--"We think the debt must be regarded as proved and we allow the appeal." The debt here referred to is not the judgment debt'but the debt alleged to be due from the complainant herein which was the foundation of the Sastri suit. Cornish, J does not use any language which can be construed as amounting to a finding that the debt on which the Sastri case was found is established. He limits himself to the question at issue, viz., whether in all the circumstances the Court should exercise its discretion to go behind the judgment and he holds that there is no sufficient evidence of collusion, fraud or miscarriage of justice to justify the Court's taking such a course. That is he does not go behind the judgment. Following the judgments delivered by Ramesam and Cornish, JJ., a decree was entered. That decree is in my view the decree made in the case and is the document to be looked at when considering Section 41 of the Evidence Act. That decree decreed that, the "appellant's debt is proved," The debt in question was the judgment debt not the debt on which judgment was obtained ex parte. Clearly therefore, in no view of the law unless not the decree but the judgment is to be looked at and Ramesam, J.'s above quoted observation is to be treated as a judgment in rem; is this Court, in proceedings between the, complainant and the respondent herein, precluded from considering whether the allegation of indebtedness in the Sastri suit was well founded.
22. The argument, as I understand it, is tha't the judgment in question is a judgment declaring that a debt is owned to S by an insolvent, that accordingly it clothes S with a character he would not otherwise possess, for it makes him a creditor, and that although the term "legal character" does not embrace ordinary creditors it does embrace creditors in an insolvency, for such creditors, by the very fact of insolvency, have their rights varied by act of law. The argument thus amounts to this: that even an insolvency alters the legal character of the creditors of the insolvent so also it alters the legal character of the creditors of the insolvent. I do not agree. "Legal character" here means something equivalent to status., See Kanhaya Lxll v. Radha Churn 7 W.R. 338, Gangadhar Roy v. Umasoondery Dossee 7 W.R. 317 and Ramakrishna Patter v. K P. Narayana Patter 26 Ind. Cas. 883 : 39 M. 80 : 27 M.L.J. 634 : (1914) M.W.N. 912. Th legal character assigned to a person announces to all the world what the legal status of the person in question is. The rreaning of "legal character" must be narrowly construed for it must be remembered that an action in rem is not an action against a thing but an action availing against all the world. One must be cautious lest litigation between A and B ba allowed unduly to affect the rights of C. The sort of danger is clearly shown inOfficial Assignee of Madras v. C.R.M.O.R.S. Firm. The point there taken was similar to the point here taken and it failed. In Official Assignee of Madras v. Official Assignee of Rangoon 83 Ind. Cas. 174 : 46 M.L.J. 580, 19 L W. 316 : 34 M.L.T. 99 : (1924) M.W.N. 458 : A.I.R. 1924 Mad. 662 at page 587 Page of 46 M.L.J.--[Ed.] it was held that a declaration that A is a partner in a firm is not a declaration of legal character. The extraordinary consequence that would flow if a declaration cf partnership or of non partnership in litigation between A and B were held to conclusively bind C is there pointed out. Yet it can hardly be doubted that the condition of being a partner much more nearly approaches status than the condition of being a creditor in an insolvency.
23. The decision of the Judicial Committee in Sheoparsan Singh v. Ramnandan Prasad Singh 33 Ind. Cas. 914 : 43 C. 694 : 14 A.L.J. 466 : 20 C.W.N. 738 : 18 Bom. L.R. 397 : 23 C.L.J. 621 : (1916) I.M.W.N. 419 : 20 M.L.T. 1 : 3 L.W. 544 : 31 M, L.J. 77 : 43 I.A. 91 (P.C.) does not assist. That case decides that where an action is founded upon the vital allegation of intestacy once it appears that a Probate Court has affirmed the Will of the alleged intestate the action fails in limine because that decision is binding and conclusive, there is, therefore, a Will, and there is, therefore, no intestacy The cases cited in Kishoribhai Revadas v. Khomchodia Dhubia 25 Ind. Cas. 37 : 38 B. 427 : 16 Bom. L.R. 459 and In re Ivory Hankin; Hankin v. Turner (1878) 10 Ch. D. 372 : 39 L.T. 611 : 27 W.R. 20, amount to no more than this; that where a Court of Probate has declared a Will to be valid or has made a declaration as to next of kin the fact of the Will or of the declared next of kin cannot be disputed in another Court. Neither case purports to construe Section 41. The case of Kathama Natchiar v. Dora-singa Tevar 2 I.A. 169 at p. 191 : 15 B.L.R. 83 : 23 W.R. 314 : 3 Sar. 456 : 3 Suther 106 : 6 M.H.O.R. 310 does not in my opinion touch the point under decision. It does not even establish that a reversioner is a person clothed with a legal character within the meaning of Section 42 of the Specific Relief Act, for it is obvious from Sir Barnes Peacock's rermarks at page 174. Page of 46 M.L.J.--[Ed.] that the suit for a declaration of title was one to which the reversioner was not in that case entitled. Sripatrao Sadashiv v. Shankarrao Sarnaik 127 Ind. Cas. 330 : 32 Bom. L.R. 207 at p. 209 : A.I.R. 1930 Bom. 331 is of assistance' only as showing that a declaratory sait is not maintainable by a creditor as such; that is that the condition of creditor is not a legal character. This, however, is conceded.
24. It is next argued that assuming that the judgment that the debt was proved does not confer a legal character, yet it declares a right to a specific thing and to a specific thing not against a specific person but absolutely. Upon this latter point Pitaram v. Jhujhar Singh 33 Ind. Cas. 798 relied upon. There the Allahabad High Court observed 'We think the decision of the Insolvency Court amounts to conclusive proof as to the title in respect of the specific things claimed by the applicant, not merely as against him, but absolutely within the meaning of Section 41 of the Evidence Act," There A was claiming certain specific articles which he a'leged were his but which being in the possession of the insolvent had been taken by the Receiver. He had two remedies (1) to apply to the Insolvency Court. (2) to institute a suit for recovery in the Munsif's Court. He pursued (1) and lost. He did not appeal but commenced suit No. (2). Obviously the earlier decision was binding on him on the ordinary principles of resjudicata, The above quoted observation would, therefore, appear to be obiter. I doubt whether a finding of a bankruptcy or any other Court in the contest between A and B as to whether certain property belongs to A amounts to anything more than a finding that as against B it belongs to A. I cannot believe that in such a contest the rights of C to such property can be conclusively determined. It is no use urging that under the Insolvency Rules C could afterwards come and claim. Ex hypothesi if the judgment in the suit between A and B is in rem and conclusive against strangers C would be met with a conclusive finding. I can well understand that in an admiralty action in rem against the ship there would be a declaration made effective against the whole world, but as at present advised I find it difficult to conceive how otherwise the judgment could declare title to a specific thing to be in A against the whole world as distinct from a specific parson. However that may be, in this case the joint does not ariee for I am clearly of the opinion that a decree declaring that A is entitled to a debt is not a declaration of title to a specific thing made not against a specific person but absolutely. By the very nature of the case by the time you have made the chose in action a specific thing (assuming that it can be regarded as a specific thing) to which I have doubts you have specified the debtor.
25. Finally I observe that a judgment in insolvency, declaring that the creditors' debt (i e a judgment debt) is a provable debt does not declare that an alleged debt which merged in that judgment debt is proved. In Chandreshwar Prasad Narain Singh v. Bisheshwar Pratab Narain Singh 101 Ind. Cas. 289 : 5 Pat. 777 : A.I.R. 1927 Pat. 61 : 8 P.L.T. 510 at page 817 it is observed that "all that is essential to the decision that the executor was entitled to Probate must be taken to have been conclusively determined." It is argued, therefore, that it was essential to the decision arrived at by Ramesam and Cornish, JJ, to hold that the alleged debt was proved and that, therefore, not only the judgment debt but the alleged debt which, was the foundation of the Sastri suit is conclusively established against the world. I am not to be taken as assenting to the above citation, but assuming that it is a correct statement it is not applicable, for it was not necessary for the Court in the insolvency proceedings to hold that the alleged debt in the Sastri proceedings was proved. Judgment could have been given without any such finding of fact and one of the learned Judges (Cornish, J,) gave such a judgment. But even had it been a necessary step I incline to the view that the observations to be found on page 343 of 7 W.R. Kanahaya Lall v. Radha Churn 7 W.R. 338 express the true position. Though it be necessary as a step to making a declaration which will operate in rem to find a fact that finding will not bind third parties in subsequent proceedings.
26. I am accordingly of the opinion that the Tribunal was at liberty to consider whether the alleged liability founded upon an alleged promissory note and sued for in the Sastri suit ever existed. On this issue of fact I see no reason for thinking that the Tribunal arrived at a false conclusion or one unsupported by evidence.
27. There remains the fact mentioned in the Report at page 76 lines 40 to 44 of the printed case that this is a stale complaint. Whether this is very material in considering the degree of delinquency is a matter of doubt. I concur in the view expressed by the Chief Justice as to the gravity of the offence and as to the proper punishment therefor.
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