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Jethabhai Ranchhodbhai Desai Vs. Bai Chanchal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 535 of 1941
Judge
Reported inAIR1943Bom257; (1943)45BOMLR504
AppellantJethabhai Ranchhodbhai Desai
RespondentBai Chanchal
Excerpt:
provincial insolvency act (v of 1920, as amended by bombay act xv of 1939), sections 6(i), 6a, 9-insolvency notice-validity of-preliminary mortgage decree-deduction of amount at which creditor values his security-demand for balance.;the insolvency notice, under section 6(i), of the provincial insolvency act, 1920,. as amended by the provincial insolvency (bombay amendment) act, 1939, must be in respect of a decree or an order for payment of any amount due to such creditor.;an insolvency notice must, under section 6a of the act, require the debtor to pay the amount due under the decree or order, a notice for payment of amount fixed by a preliminary mortgage decree less the figure at which the creditor values his security under section 9(2) of the act is not a valid notice.;quaere, whether..........respect of a decree or an order for payment of any amount due to such creditor. the only order or decree directing payment in this case is the preliminary decree directing payment of the amount into court. whether that would be a decree on which could be founded an insolvency notice it is not necessary to consider, because it seems to me perfectly plain that, in the circumstances of this case, the creditor cannot comply with the terms of section 6a introduced by the amending act. that section provides :an insolvency notice under this act shall be in the prescribed form and shall be served in the prescribed manner. it shall require the debtor to pay the amount due under the decree or order, or to furnish security for the payment of such amount to the satisfaction of the creditor or his.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an application in revision against an order made by the District Judge of Kaira, upholding a decision of the First Class Sub-ordinate Judge, and the question arises under the Provincial Insolvency Act, as amended in 1939.

2. The position of the original applicant is this. In 1934 she obtained a preliminary mortgage decree for a sum of Rs. 5,425 and costs. The decree has not been translated, but we are told that it was in the ordinary form, and directed payment into Court of the amount stated within six months; on payment the mortgagee to reconvey the property; and on default of payment, liberty to the mortgagee to apply for sale. Then in December, 1934, a final decree was made directing the property to be sold, and giving the mortgagee liberty to apply for a personal decree for the amount of the debt not covered by the proceeds of sale.

3. The present application is an application to the First Class Subordinate Judge to serve a notice on the mortgagor under Section 6A of the Provincial Insolvency Act, requiring the' mortgagor to pay the amount of the debt as ascertained in the preliminary decree, less the figure at which the mortgagee has valued her security under Section 9(2) of the Provincial Insolvency Act, and it is suggested that that notice is valid under the amendments to Section 6 of the Act introduced by the Provincial Insolvency (Bombay Amendment) Act, 1939. Section 6 of the Provincial Insolvency Act specifies the acts Which constitute an act of insolvency, and Section 3 (a) of the Amendment Act provides :

In the Provincial Insolvency Act, 1920, in Section 6, after Clause (h), the following new clause shall be inserted, namely :-(i) if after a creditor has served an insolvency notice on him in respect of a decree or an order for the payment of any amount due to such creditor, the execution of which is not stayed, he does not within the period specified in the notice which shall not be less than one month comply with the requirements of the notice.

The person referred to in that sub-section is, of course, the insolvent.

4. Now, the insolvency notice must be in respect of a decree or an order for payment of any amount due to such creditor. The only order or decree directing payment in this case is the preliminary decree directing payment of the amount into Court. Whether that would be a decree on which could be founded an insolvency notice it is not necessary to consider, because it seems to me perfectly plain that, in the circumstances of this case, the creditor cannot comply with the terms of Section 6A introduced by the amending Act. That section provides :

An insolvency notice under this Act shall be in the prescribed form and shall be served in the prescribed manner. It shall require the debtor to pay the amount due under the decree or order, or to furnish security for the payment of such amount to the satisfaction of the creditor or his agent and shall state the consequences of non-compliance with the notice.

So that, the notice must require the debtor to pay the amount due under the decree or order. As I have said, the only decree or order which directs any payment at all is the preliminary decree, but the notice which the creditor is seeking to serve is not for payment of that amount. It is a notice for payment of that amount, less the figure at which he has valued his security under Section 9(2). Now that balance may be the sum for which the creditor can prove in insolvency, but it is certainly not a sum secured by any decree or order. There is no decree or order directing payment of that sum. The Court has indeed at no time considered the propriety of the valuation made by the creditor. There is nothing proved before the Court, and the Court has not passed any decree for payment of the difference between that figure put upon his security by the creditor and the amount of the original debt. It seems to me perfectly plain, therefore, that the creditor cannot ask the Court to serve a notice under Section 6A in the form in which he desires to serve it, and the procedure introduced by Section 6(i) and Section 6A of the Amending Act has no application to the position which exists in this case.

5. We must, therefore, reverse the decision of the lower Court, and dismiss the creditor's application, with costs throughout.

Sen, J.

6. I agree.


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