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In Re: Haji Jan Mahomed Haji - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Judge
Reported in4Ind.Cas.126
AppellantIn Re: Haji Jan Mahomed Haji
Excerpt:
.....the indian cases to see if they help the contentions put forward on behalf of the applicant. 15. the official assignee was clearly entitled to appear in the interests of the general body of creditors. the applicant haji jackeira must pay the costs of the petitioning creditor as well as those of the official assignee......determined before discussing the merits. the question for determination, therefore, is whether the applicant haji jackeira haji ahmed patel is entitled to make this application for either review or revocation of the adjudication order.5. the insolvent was adjudicated in accordance with the provisions of section 9 of the indian insolvent act, 11 and 12 victoria, c. 21. that section after providing for the adjudication of a trader provides for the revocation of that order in the following terms:provided always that it shall be lawful for the said court, upon the petition of any person adjudged to have committed an act of insolvency as aforesaid to revoke or confirm such adjudication.6. it is quite clear that under the provisions of this section, the only person who can apply for a.....
Judgment:

Davar, J.

1. Haji Jan Mahomed Haji was previous to the 30th day of April 1909 carrying on business as a merchant in Bombay. Haji Ahmed Haji Sulleman, who alleges that he is a creditor of Haji Jan Mahomed, on the 30th of April last, presented a petition to the Officiating Chief Justice, who was then one of the vacation Judges, and obtained an order whereby the said Haji Jan Mahomed was adjudicated an insolvent. A vesting order was made, and he was ordered to file his Schedule within thirty days thereafter. The adjudicated insolvent is stated to have left Bombay and the petitioning creditor has not been able to serve the order of adjudication on him. The Official Assignee acting under the vesting order has taken possession of a piece-goods shop belonging to Haji Jan Mahomed. The shop contains goods of large value.

2. On the 18th of June 1909 Mr. Robertson, on behalf of his client Haji Jackeira Haji Ahmed Patel, applied to me for a rule calling upon the petitioning creditor to show cause why the order of adjudication obtained by him should not be 'reviewed' or revoked.'

3. The adjudicating creditor in his petition had stated that Haji Jan Mahomed on the 20th of April 1909, when he was in hopelessly insolvent circumstances, had with intent to delay and defeat his creditors fraudulently assigned over to Haji Jackeira Haji Ahmed Patel, his friend and his daughter's father-in-law, by way of mortgage all his property movable and immovable in British India in order to secure an alleged debt of three lacs and fifty thousand rupees.

4. Haji Jackeira in the affidavits put in, in support of his application for a review or revocation of the order of adjudication, admits that a mortgage was executed in his favour by the adjudged insolvent on the 20th of April, but denies that the same was fraudulent and urges that the order of adjudication was improperly obtained by making incorrect representations to the learned Judge. Although I had doubts in my mind as to whether Mr. Robertson's client was entitled to make the application--as the matter was of some importance and as the question was not free from doubt--I granted the rule and made it returnable on the following Wednesday. The rule was argued before me last Wednesday the 23rd instant when Mr. Setalvad for the petitioning creditor, the Advocate-General for the Official Assignee, and Mr. Mankar for a creditor in showing cause against the rule raised as a preliminary point the question as to whether Mr. Robertson's client Haji Jackeira had any locus standi and was entitled to make the application. By consent of counsel it was agreed that this question should be first gone into and determined before discussing the merits. The question for determination, therefore, is whether the applicant Haji Jackeira Haji Ahmed Patel is entitled to make this application for either review or revocation of the adjudication order.

5. The insolvent was adjudicated in accordance with the provisions of Section 9 of the Indian Insolvent Act, 11 and 12 Victoria, c. 21. That section after providing for the adjudication of a trader provides for the revocation of that order in the following terms:

Provided always that it shall be lawful for the said Court, upon the petition of any person adjudged to have committed an act of insolvency as aforesaid to revoke or confirm such adjudication.

6. It is quite clear that under the provisions of this section, the only person who can apply for a revocation of the order of adjudication is the person adjudged to have committed an act of insolvency. There is no other provision in the Act relating to the revocation of an adjudication order. Prima facie, therefore, Haji Jackeira, the present applicant, has no right to apply for an order revoking the order in question. His legal advisers seem to have realised this difficulty and, therefore, they have introduced the alternative word review and filed a memorandum of review in support of their application. It seems to me that it does not matter what language, to designate their application is used. This clearly is an application for a revocation of the adjudication order. Mr. Robertson argued that the Court had inherent power to review its own order and set it aside if the Court is satisfied that it was improperly obtained or that it never ought to have been made. Reliance was placed on the decision of Mr. Justice Marriott in In re Thuckur Bhugvandas Hurjivan 4 B. 489, where it was held that the Court had jurisdiction to review its own orders. No one has contested before me that the Court had no power to review its own orders. What has been most strenuously contested is that the applicant was not the proper party to make the application for review or revocation. The case referred to has no bearing on the question at issue before me in this rule. In that case the application for revocation was made by the insolvent himself. He was clearly entitled to make the application under the provisions of Section 9 of the Act. The Court in the first instance made an order revoking the adjudication. The petitioning creditor, at whose instance the insolvent was adjudicated, then applied for a review of that order. It was contended on behalf of the insolvent that the Court had no power to review and the only course open to the petitioning creditor was to appeal. This contention, the Commissioner in Insolvency overruled holding that the Court had jurisdiction to review its own order and did review and subsequently cancelled the order for revocation. The question before me is not whether the Court has jurisdiction to review its own order. The question here is who is entitled to invoke the jurisdiction of the Court to review or cancel the order of adjudication made against the insolvent. The Official Assignee and the petitioning creditor and another creditor all contend that the insolvent alone can make the application. Mr. Robertson contends that his client, who is damnified by the order, is entitled to apply to the Court to set aside the order and that if the Court is satisfied that the order is improperly obtained, or is one that ought never to have been made, it ought to set aside the same at the instance of his client. These contentious are not in the least affected by the decision in In re Thuckur Bhugvandas Hurjivan 4 B. 489.

7. Mr. Robertson has cited several English cases before me in the course of his argument but there again one has only to see the widely different provision in the English Bankruptcy. Act to find at once that in the consideration of the question of the locus standi of the applicant, English cases cannot be of any help. Whereas Section 9 of the Indian Insolvent Act specifically provides that the order may be revoked upon the petition of the person adjudged to have committed an act of insolvency the corresponding provision in the English Bankruptcy Act of 1883, 46 & 47 Vic. c. 52, contained in Section 35, specifically authorises the Court where in its opinion a debtor ought not to have been adjudged bankrupt to annul the adjudication on the application of any person interested. I find that in the Insolvency Act III of 1909, which will come into force in the Presidency towns in India in the beginning of next year and supersede the present Act, the provisions of the English Bankruptcy Act have been incorporated by Section 29. It is clear, therefore, that whereas in England 'any person interested' may apply to annul the order of adjudication, under the Indian Insolvent Act, now in force, the insolvent alone can apply to annul the adjudication. If the provision of the English Act had applied the applicant would have been clearly entitled to have been heard, for there is no doubt that he is vitally interested in having the order of adjudication annulled. The piece goods shop seized by the Official Assignee is included in his mortgage and he contends that he was in possession of it as such mortgagee.

8. The Official Assignee on the other hand asserts that it was within the 'order and disposition' of the insolvent and he was entitled to take possession of it under the provisions of Section 23 of the Act. Again the applicant's mortgage being within two months of the adjudication may become valueless to him under the provisions of Section 24 of the Act, if the creditors could establish that the charge was voluntarily created. All this means litigation ahead and the applicant Haji Jackeira is naturally anxious to escape all the risk and worry of litigation by having the order of adjudication annulled.

9. If the provisions in the English Bankruptcy Act applied, or if the new Indian Presidency Town Insolvency Act had been in force now, it seems to me the applicant would have been clearly entitled to be heard but the question is whether he is so entitled to be heard now under the present Indian Insolvent Act. It is quite obvious that he is not entitled to be heard under the provisions of Section 9. That provides for an application by the adjudged insolvent alone. There is no other provision in the Act which could be said to authorise any person other than the adjudged insolvent to apply to have the order of adjudication revoked. Mr. Robertson contended that the Court had inherent jurisdiction to review its own order and if satisfied that the order ought not to have been made to revoke the same. Although it is held that the Insolvent Court has power to review its own orders, that power, in my opinion, could only be exercised at the instance of the party entitled to invoke the exercise of those powers. In re Thuckur Bhagvandas Harjivan 4 B. 489 the Court reviewed its order at the instance of a party to the proceedings. Here the applicant is a stranger to the adjudication proceedings. He is not besides really damnified. If he was in possession of the piece goods shop he is entitled to establish that possession by a suit and recover the shop and all its contents from the Official Assignee. If his mortgage in respect of other properties is challenged as a voluntary conveyance he could defend the action and establish that his mortgage is not fraudulent and void within the meaning of Section 24.

10. As I have observed before in this matter, English cases cannot be accepted as offering any guide whatever, the provisions in the English and Indian Acts being entirely different. Take for instance the case principally relied upon by the learned Counsel for the applicant, Ex parte Thoday (1876) 2 Ch. D. 229 and the appeal therefrom reported in the same volume at page 797. The case was decided according to the provisions of the Bankruptcy Act of 1869. In this case Bacon C.J. held that the objection to the appellant's locus standi could not be sustained on the express ground that he had 'a direct interest in the matter.' This view was upheld by the Court of Appeal. This and other like cases the decision of which turns on the express provisions of statutes which have no application to India and more especially when the Indian statute contains an expressly different provision can never be of any use to Indian Courts, I must, therefore, turn to the Indian cases to see if they help the contentions put forward on behalf of the applicant. Again in turning to Indian cases one must remember that cases of insolvencies not in Presidency towns and to which the Indian Insolvent Act does not apply are of no value. Proceedings in those cases are under the provisions of a chapter in the Civil Procedure Code, which are widely different from the provisions of the Act which regulates proceedings in the Presidency towns.

11. The point for determination in the rule now before me is not without Indian authority. In the matter of William Watson 31 C. 762 it was held that the English trustee in Bankruptcy had no locus standi in the Calcutta Court to make an application to have the adjudication and vesting order set aside. In that judgment a matter which was dealt with by Mr. Justice Wilson in 1890 in connection with the insolvency of J. Bell is referred to. This case is not reported but it is set out fairly fully in Mr. Mitra's Commentaries on Section 9 of the Indian Insolvent Act at pages 29 and 30. In that case the wife of the adjudged insolvent was allowed to apply for revocation of an order adjudicating her husband insolvent. She succeeded in getting the order revoked. In William Watson's case 31 C. 762 Mr. Justice Henderson in the course of his judgment when referring to Bell's case distinguishes the case as a special case' in which the wife was 'specially interested'. A careful perusal of the notes of Bells case, appearing in Mr. Mitra's Commentaries, makes it clear that the case is not distinguishable for the reasons stated by Mr. Justice Henderson. The real reasons for the proceedings, so obviously in conflict with the provisions of Section 9 of the Indian Insolvent Act, seems to be that nobody raised the question of the wife's locus standi and the question whether she was entitled to apply was never before the Court and never considered. Bell's wife was heard because no body seems to have raised the question whether she was entitled to be heard. It appears further from the notes of this case that it was only after the order of adjudication was revoked and the insolvent's wife applied for an order for her costs, that the question of her exact position seems to have troubled the Court and the difficulty was solved by the Court holding that she was not entitled to her costs as she was heard only as amicus curi. In the face of these facts it is hardly competent to contend that Bell's case is an authority for holding that any one other than an adjudged insolvent can apply for an order for revocation of the adjudication. In Mr. Mitra's book there is another case referred to in his Commentaries to Section 9, In re Narayandas Chatterji. This matter was before the present Chief Justice of Bengal, then Mr. Justice Jenkins at Calcutta, in 1898. In this case two persons alleging themselves to be partners of the adjudged insolvent applied for a revocation of the order of adjudication during the temporary absence of the insolvent from Calcutta. The learned Commissioner here specifically raised the question as to whether the partners had any locus standi to apply and although Bell's case was referred to be guarded himself when granting the rule by saying that he did not intend to decide that the appellants had any locus standi. The report does not show what happened subsequent to the granting of the rule but it does show that the adjudged insolvent was stated to have gone to his native village to have his family there and the counsel for the applicants had offered to join the adjudged insolvent as co-petitioner. Possibly this was done and the question of the applicant's locus standi then no more arose.

12. Since I heard arguments on the rule, I have consulted my learned brother Macleod, whose experience in insolvency matters is very large and very unique, and I learn that there is not a single precedent in Bombay of anybody other than an adjudged insolvent being allowed by the Insolvent Court to make an application for the revocation of the adjudication order.

13. Bell's case in Calcutta seems to be the only precedent in support of the present applicant's contentions. It seems to me, that case is no authority whatever for holding that under the Indian Insolvent Act parties other than the adjudged insolvent can apply for are Vocation of the adjudication order. The question of the applicant's locus standi was never raised land was never before the mind of the learned Judge who heard the application during the whole time the rule was heard and decided and it was only when an order for costs was applied for that the difficulty seems to have occurred to the Court. The difficulty was got over by holding that the Court had heard the applicant merely as amicus curi. As I have stated before I do not agree with the view taken of Bell's case in William Watson's case at page 777. Bell's case does not appear to have been regarded as a 'special case' nor was the wife allowed to apply because she was 'a person specially interested'. There is one other point in the case which I must notice here. It was in the course of the argument repeatedly stated by the learned Counsel for the applicant that the adjudged insolvent was acting in collusion with the petitioning creditor. If that is so there was nothing to prevent him coming to the Court and himself petitioning the Court for relief and it would still be in his power to nullify all the applicant's efforts by coming and filing a petition himself in case the applicant succeeded in getting the adjudication order revoked. If the insolvent himself petitions the Court there would be no remedy whatever left to the applicant and the insolvency would be bound to proceed and take the ordinary course of all other Insolvency. The litigation which the applicant tries to avoid would then necessarily follow.

14. Under these circumstances the only conclusion that I could come to is that the applicant Haji Jackeira Haji Ahmed Patel has no locus standi to make the present application and [must discharge the rule obtained by him on the 18th of this month.

15. The Official Assignee was clearly entitled to appear in the interests of the general body of creditors. The applicant Haji Jackeira must pay the costs of the petitioning creditor as well as those of the Official Assignee. I can make no order for the costs of Mr. Mankar's client who must bear his own costs.

16. All affidavits filed on the rule must be allowed and taken into consideration in taxing costs.


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