Secured creditor rights and insolvency proceedings do not automatically stay a pending mortgage suit.

Presentation of an insolvency application by the Official Receiver under Section 53 of the Provincial Insolvency Act did not oust the Civil Court's jurisdiction in a pending mortgage suit or require an automatic stay. Section 28(6) preserved a secured creditor's right to realise or deal with the security, while the insolvency application addressed the transfer's validity against the general body of creditors and the mortgage suit concerned enforceability between mortgagor and mortgagee. Because the two proceedings raised different questions, the Civil Court retained ordinary jurisdiction under Section 4, and any stay had to be specifically sought rather than arising by operation of law.

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Issues: Whether the presentation of an application by the Official Receiver under Section 53 of the Provincial Insolvency Act deprived the Civil Court of jurisdiction to continue a pending mortgage suit or justified stay of the suit pending disposal of the insolvency application.

Analysis: The secured creditor was outside the general prohibition against creditors in Section 28(2), which was controlled by Section 28(6) preserving the power of a secured creditor to realise or otherwise deal with his security. The insolvency proceedings under Sections 53 and 54 were held to concern the validity of the transfer as against the general body of creditors, while the mortgage suit concerned the enforceability of the mortgage between mortgagor and mortgagee. The two proceedings determined different questions and did not divest the Civil Court of its ordinary jurisdiction. Section 4 of the Provincial Insolvency Act conferred wide insolvency powers, but not to the exclusion of the Civil Court in a mortgage suit. The proper course, if any, was to seek a stay from the Civil Court, but the mere filing of the Section 53 application did not automatically suspend the suit.

Conclusion: The Civil Court retained jurisdiction to proceed with the mortgage suit, and the request for stay was rightly refused.

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