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In Re: Maneckchand Virchand Patni - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberInsolvency Petition No. 334 of 1922
Judge
Reported in(1922)24BOMLR872
AppellantIn Re: Maneckchand Virchand Patni
DispositionApplication Dismissed
Excerpt:
.....insolvency act (iii of 1909), section 18-commissioner in insolvency-jurisdiction-power to stay insolvency proceedings in a district court -district court not subject to the superintendence of the commissioner in insolvency-practice-procedure.;section 18 of the presidency towns insolvency act, 1909, applies where the insolvency court has power to stay an ordinary civil suit which may be pending at the date of the insolvency against an insolvent, it does not relate to some other insolvency pending in some other court of another province or in any of the district courts of the bombay presidency. the other insolvency is not a 'suit' or 'other proceeding' pending against the insolvent within the meaning of section 18. the 'other proceeding' should be ejusdem generis with or analogous to a..........to be transferred to this court; thirdly that the present high court insolvency petition and the nasik insolvency petition be then consolidated; and, lastly, for such other order as the court may think fit to make.2. the other order that i think fit to make is that this application be dismissed as being entirely misconceived. it is apparently based on section 18 of the presidency towns insolvency act which runs:-(1) the court may, at any time after the making of an order of adjudication, stay any suit or other proceeding pending against the insolvent before any judge or judges of the court or in any other court subject to the superintendence of the court.3. that section of course applies to the familiar case where the insolvency court has power to stay some ordinary civil suit which.....
Judgment:

Marten, J.

1. This is an application by one Maneckchand Virchand, an insolvent, first, that the further proceedings in the insolvency petition No. 11 of 1922 in the District Court of Nasik be stayed by sending a notice to that Court as provided by Section 18 of the Presidency Towns Insolvency Act III of 1909; secondly, that the Insolvency Petition No 1 of 1922 pending in the District Court, Nasik, be ordered to be transferred to this Court; thirdly that the present High Court insolvency petition and the Nasik insolvency petition be then consolidated; and, lastly, for such other order as the Court may think fit to make.

2. The other order that I think fit to make is that this application be dismissed as being entirely misconceived. It is apparently based on Section 18 of the Presidency Towns Insolvency Act which runs:-

(1) The Court may, at any time after the making of an order of adjudication, stay any suit or other proceeding pending against the insolvent before any Judge or Judges of the Court or in any other Court subject to the superintendence of the Court.

3. That section of course applies to the familiar case where the Insolvency Court has power to stay some ordinary civil suit which may be pending at the date of the insolvency against the insolvent. In my opinion it does not relate to some other insolvency pending in some other Court of another province or in any of the District Courts of our own Presidency. Certainly that other insolvency is not a 'suit' pending against the insolvent. Nor in my opinion is it an 'other proceeding' pending against the insolvent. Such other proceeding should, I think, be ejusdem generis or analogous to a suit. But however that may be, I am of opinion that the District Court is not subject to the superintendence of the Commissioner in Insolvency, and that consequently on that ground alone Section 18 is not complied with.

4. I may also observe that Section 22 of the Presidency Towns Insolvency Act expressly provides for the case where other insolvency proceedings are pending in any other British Court. Then, if the Court thinks that the property of the debtor can be more conveniently distributed by such other Court, the Court may annul the adjudication or may stay all proceedings thereon. Examples of how that jurisdiction is exercised will be found in the cases of Re Aranvayal Sabhapathy I.L.R. (1897) 21 Bom. 297 and In the matter of William Watson I.L.R. (1904) Cal. 761. In other words each Court can stay its own proceedings, but cannot interfere with another Court, unless it has superintendence over it.

5. Then when one turns to the Provincial Insolvency Act V of 1920, which is the latest Act regulating insolvency matters in our province, it is quite clear that appeals under that Act lie from the District Court to the High Court. In my opinion the High Court there means the High Court on its Appellate Side and does not mean the Commissioner in Insolvency. So it is the High Court on its Appellate Side, which has superintendence over, the District Court.

6. As far as the ordinary procedure and powers of the Judges on the Original Side are concerned, the Full Bench case of Narayan v. Jankibai (1915) l7 Bom. L.R. 655; I.L.R. 39 Bom. 604 decides that it is not competent for a single Judge of the High Court, exercising the ordinary original civil jurisdiction of the Court, to stay the hearing of a suit pending for trial in a Subordinate Judge's Court in the mofussil, unless authorised so to do by rule, Mr. Justice Macleod in that case was of opinion that there was jurisdiction in personam to restrain the parties from proceeding with such a suit, and the Appellate Court in Mulchand Raichand v. Gill & Co : (1919)21BOMLR963 was of the same opinion. But however that may be, that point does not arise in the present case. I am not here exercising any jurisdiction in personam whatever.

7. I thus refer to the Original Side jurisdiction, because this morning counsel for the applicant urged that, under Section 5 of the Provincial Insolvency Act 1920, I had the same powers as if I was sitting on the Original Side. But the Full Bench case shows that, even then, I should have no power to stay the Nasik proceedings, and much less to transfer them to the High Court. At the time of that argument, nobody appeared to oppose, but for various reasons I stood the matter over till after the midday adjournment. Then Mr. Bhandarkar appeared for the opposing creditor, and has argued that I have no jurisdiction to hear the present application at all. I cannot decide the point of jurisdiction without hearing the parties, but having done so, my conclusion is that I have no jurisdiction to grant the present application.

8. I should mention one other matter. The parties appear to be greatly moved over certain proceedings that have taken place in a Nasik civil suit where certain property has been realised, and certain sums I understand have been set aside by the Subordinate Judge pending the Nasik insolvency proceedings. It is further said that the interim receivers appointed in the Nasik insolvency proceedings by the Nasik District Judge are entitled to these sums so set aside and that they ought not to be lost to the general body of creditors. As to that the present High Court petition states as follows:-

The petitioner further learns that the District Judge of Nasik after he received the letter of the Official Assignee has recently passed an order in the said insolvency petition No. 1 of 1922 that the said interim Receivers do vacate their office and hand over possession of all properties of the petitioners to the Official Assignee excepting the sum of Rs. 15,005 lying with the Second Class Subordinate Judge of Yeola. And that the petitioner farther learns that the District Judge of Nasik la going to dismiss and dispose of the said insolvency petition No. 1 of 1922 pending in his Court against the insolvents on 24th June 1922 That the petitioner therefore submits that immediate action is urgently required to be taken by this Hon'ble Court.

9. How far that paragraph is accurate I do not know. But the learned District Judge of Nasik has similar powers of staying insolvency proceedings in his own Court, to those which I have under Section 22 of the Presidency Towns Insolvency Act. And it would appear to be a question here following, I take it, the decisions in Re Aranvayal Sabhapathy I.L.R. (1897) 21 Bom. 297 and In the matter of William Watson I.L.R. (1904) Cal. 761 as to which Court this particular insolvency can be more conveniently prosecuted in. The assets certainly seem to be very large-nearly three lacs-but I have no materials at the present moment before me pointing to a conclusion either the one way or the other. Nor is there even any application before me by Mr. Bhandarkar's client, asking that I should exercise my powers under Section 22. But if the learned Nasik District Judge, after considering all the facts, is of opinion that this matter may be more conveniently disposed of in the High Court, then I dare say he will exercise his powers of staying proceedings. In saying this, I am in no way attempting to fetter his discretion, and for two very good reasons. First, that it would be very improper for me to do so, and secondly, I have not got the facts before me on which I could exercise my own discretion. But I do say that, as at present advised, I think it will be very inconvenient to have two sets of insolvency proceedings going on together.

10. As regards the sum of Rs. 15,005 and the position of the interim Receivers, personally I do not see any difficulty. The Official Assignee will, I take it, intervene and get whatever he can subject to such orders as may be passed in the Nasik Court. If there are prior persona there in the way of interim Receivers, then presumably their claims will have to be satisfied first. This is not the first time this sort of point has arisen, as will be seen on looking at the authorities. I think a little common sense will remove this difficulty which the legal gentlemen concerned in the case appear at the present moment to feel.

11. My order will be that the present application be dismissed. There will be no order as to the costs of Mr. Bhandarkar's client.


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