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Anant Kishore and ors. Vs. Lilabai and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 500 of 1971
Judge
Reported inAIR1976Bom53
ActsProvincial Insolvency Act, 1920 - Sections 14
AppellantAnant Kishore and ors.
RespondentLilabai and ors.
Appellant AdvocateS.N. Kherdekar, Adv.
Respondent AdvocateN. Dharaskar, Adv.
Excerpt:
.....insolvency act, 1920 - the other creditors preferred an appeal against order of withdrawal of insolvency application - it was held that the deposition receipt and the affidavit filed by them were prima facie evidence that the appellants were creditors and also 'aggrieved persons' on account of the passing of the order of withdrawal - they were therefore, competent to file an appeal under section 75 (1) of the act. - - it has to be stated that if respondents 2 to 5 ultimately show that they are the creditors of the petitioners they would clearly be the persons who would clearly be the persons who would be aggrieved on account of the withdrawal of the insolvency application no. i am satisfied that respondents 2 to 5 were competent to file an appeal in the district court. on account..........locus standi to prefer that appeal and (iii) whether the order of withdrawal was legal or not. the learned assistant judge held that the appeal at the instance of respondents 2 to 5 was maintainable under section 75 of the provincial insolvency act. it was also held that respondents 2 to 5 were persons aggrieved' by the decisions about the withdrawal of the original applications.the learned assistant judge, therefore, felt that respondents 2 to 5 had a locus standi to file an appeal. an affidavit was filed by respondents 2 to 5 before the learned assistant judge to show that respondents 2 to 5 were the creditors on the basis of the deposit receipt. the learned assistant judge held that there was prima facie evidence to show that respondents 2 to 5 were the creditors. he, therefore.....
Judgment:
ORDER

1. One Mohammad Ishaque had filed an insolvency application No. 3 of 1967 against the petitioners as insolvents. That application came to be dismissed for want of prosecution on December 22. 1967 On June 10 1968 Raghubirdaval, the present respondent No. 6 made an application against the petitioners for getting them adjudicated as insolvents. That application was registered as Insolvency Application No. 6 of 1968. Even this insolvency application came to be withdrawn on March 25, 1970. Against that order of withdrawal, respondents 1 to 5 filed a Miscellaneous Civil Appeal No. 34 of 1970 in the District Court at Nagpur. This appeal was heard and disposed by the Third Extra Assistant Judge, Nagpur, On August 31, 1971 In this appeal it was the case of respondents 2 to 5 that they were to the creditors of the petitioners under a deposit receipt. They claimed that they were desirous of joining to the insolvency application No. 6 of 1968. however, the petitioning creditor in that application (respondent No. 6) received a sum of Rs. 5,800/- from the petitioners and got their insolvency application (No. 6 of 1968) withdrawn without issuing notices to the other creditors. It was claimed that the order permitting the withdrawal of the original insolvency application. No. 5 of 1968 was contrary to law and a prayer was made that the respondents 1 to 5 to be permitted to join and continue the insolvency case No. 6 of 1968.

2. When the appeal was filed three questions were raised by the learned Extra Assistant Judge. the main questions were (I) whether the appeal was competent (ii) whether respondents 2 to 5 have locus standi to prefer that appeal and (iii) whether the order of withdrawal was legal or not. The learned Assistant Judge held that the appeal at the instance of respondents 2 to 5 was maintainable under Section 75 of the Provincial Insolvency Act. It was also held that respondents 2 to 5 were persons aggrieved' by the decisions about the withdrawal of the original applications.

The learned Assistant Judge, therefore, felt that respondents 2 to 5 had a locus standi to file an appeal. An affidavit was filed by respondents 2 to 5 before the learned Assistant Judge to show that respondents 2 to 5 were the creditors on the basis of the deposit receipt. The learned Assistant Judge held that there was prima facie evidence to show that respondents 2 to 5 were the creditors. He, therefore allowed the appeal and set aside the order of withdrawal and remanded the matter back to the trial Court for proceeding further in accordance with law. The learned Assistant judge held that when the withdrawal of the application was permitted under Section 14 of the Provincial Insolvency Act was given. He, therefore, found that the order of withdrawal was illegal. While making an order, he, however, observed that the question whether the debt claimed by respondents 2 to 5 was a subsisting or not, whether it was barred by time and whether respondents 2 to 5 were in fact creditors of the petitioners, had to be decided by the trial Court. It is against that order that the present revision application was filed.

3. Mr. Kherdekar, the learned Advocate for the petitioners has argued that the appeal preferred by respondents 2 to 5 was not competent. He submits that respondent 2 to 5 were not parties to the original application No. 6 of 1968, and as such, they had no locus standi to file an appeal. It is difficult to accept this submission. Section 75(i) of the Provincial Insolvency Act provides:

'The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District court may appeal to the District Court xxxxxx'.

It is therefore , clear that if respondents 2 to 5 can be said to be the persons 'aggrieved by the decisions about the withdrawal they have a locus standi to file this appeal. They are also competent to file an appeal if they can show that they are the creditors. Respondents 2 to 5 have filed a deposit receipt and an affidavit to show that they were the creditors on the basis of this deposit receipt. The learned Assistant Judge felt that this was prima facie evidence of the fact that respondents 2 to 5 were the creditors. On this prima facie material he found that respondents 2 to 5 had a right of an appeal under Section 75(i) of the Provincial Insolvency Act. It has to be stated that if respondents 2 to 5 ultimately show that they are the creditors of the petitioners they would clearly be the persons who would clearly be the persons who would be aggrieved on account of the withdrawal of the insolvency application No. 6 of 1968. Considered from these two points of view. I am satisfied that respondents 2 to 5 were competent to file an appeal in the District Court. The appeal was, therefore, rightly entertained by the learned Assistant Judge.

4. It also appears that no notice was issued before the Insolvency application No. 6 of 1968 was allowed to be withdrawn. Under the Bombay Provincial Insolvency Rules framed in 1934 a notice under Rule XXV (2) is required to be issued in suitable newspapers in English or the regional language and if the Court so directs, in the Bombay Government Gazette in respect of an application for withdrawal under Section 14 of the Bombay Provincial Insolvency Act. Such a provision is salutary as the persons may otherwise be interested in the insolvency proceedings should be afforded an opportunity to appear before the Court if such a withdrawal is likely to affect their interests. It is not disputed that such a notice was not given. On account of the failure to give such a notice, the order of withdrawal seems to be clearly illegal. The learned Assistant Judge found that a the notice was not given the order of withdrawal was required to be set aside. I entirely agree with the finding made by the learned Assistant Judge in this behalf.

5. Mr. Kherdekar at one stage argued that the question as to whether the order of withdrawal was legal or not should not be decided at this stage. He submitted that respondents 2 to 45 should fist of all show satisfactorily that they are the creditors competent to make an application for getting themselves impleaded under Section 16 of the provincial Insolvency Act and ;unless that question is decided the order of withdrawal could not be set aside. It is not possible for me to accept this submission of Mr. Kherdekar. As the required notice is not given, the order of withdrawal is clearly illegal. That order has, therefore, to be set aside. No prejudice is caused to the petitioners as under the order of the learned Assistant Judge the question as to whether respondents 2 to 5 are creditors or not has yet to be considered by he trial Court. In view of the entire circumstances in the present case. I feel there is no merit in the revision application and the same is dismissed.

6. As the case is an old case. I direct that the trial Court will dispose of this case expeditiously. The record be sent to the trial Court within one week.

7. The ;rule is discharged. The petitioners will have the costs of respondent 1 to 5.

8. Rule discharged.


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