Skip to content


Noor Mohammad Khan Vs. Rashid Ahmad and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 2088 of 1978
Judge
Reported inAIR1981All261
ActsProvincial Insolvency Act, 1920 - Sections 75 and 75(1); Code of Civil Procedure (CPC) , 1908 - Sections 115 - Order 9, Rule 13; Provincial Small Cause Courts Act, 1887 - Sections 25
AppellantNoor Mohammad Khan
RespondentRashid Ahmad and ors.
Advocates:Vishnu Sahai and ;B. Dayal, Advs.
DispositionRevision allowed
Excerpt:
.....rule 13 of code of civil procedure,1908 - appeal against order of trial court deciding restoration application in insolvency proceeding - is maintainable before district court. (ii) civil - waiver of ex-parte order and application to waive that ex-parte order - section 75 of provincial insolvency act, 1920 and section115 and order 9 rule13 of civil procedure code,1908 and section 25 of provincial small causes court act, 1887 - ex-parte order passed - plaintiff discharged as insolvent - revision application in high court to set aside ex-parte - order in revision before high court applicant sought revision of order of trial court which was passed ex-parte whereby discharging plaintiff insolvent - order 9 rule13 application in which reasonable ground was shown - applicant opposed..........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, and the order of the district court upon such appeal shall be final : provided that the high court, for the purpose of satisfying itself that an order made in any appeal decided by the district court was according to law, may call for the case and pass such order with respect thereto as it thinks fit.' the second proviso to this sub-section as also sub-sections (2), (3) and (4) are not relevant for the present purpose. it would be seen that the key words which confer a right of appeal used in sub-section (1) are 'aggrieved by a decision come to or an order made in the exercise of insolvency.....
Judgment:
ORDER

R.R. Rastogi, J.

1. This is a revision under Section 75 of the Provincial Insolvency Act. hereafter 'the Act'. The brief facts are these. The applicant Noor Moham-mad Khan was adjudged as insolvent by order dated 21-1-1973 and one year's time was specified for making an application for discharge. In pursuance of that order the applicant made such an application under Section 41(1) of the Act. An ex parte order was passed on that application on 2-11-1976 discharging the applicant. On 30-11-1976 Rashid Ahmad, opposite party No. 1, filed an application under Order 9, Rule 13 C. P. C. for the setting aside of that order. He filed an affidavit in support of that application. The ground taken by him was that his brother had met with an accident at Delhi and in that connection he had gone to Delhi and had not been able to appear on the date fixed. That application was contested by the applicant and he also filed a counter-affidavit. He disputed that Rashid Abmad's brother had met with any accident and asserted that on the date fixed i. e. on 2nd November, 1976, Rashid Ahmad was present.

2. The court of first instance allowed the application of Rashid Ahmad and set aside the order dated 2nd November, 1976. Aggrieved the applicant filed an appeal under Section 75 of the Act which came up for hearing before the V Additional District Judge, Moradabad. The learned Additional District Judge took the view that since the trial court had allowed the application made under Order 9. Rule 13 C. P. C. no appeal lay against that order under Order 43,C. P. C. In his opinion Section 75 of the Act was not applicable to the case and the remedy of the applicant was that he could have moved a revision application under Section 115 C. P. C. before the High Court. The lower appellate Court considered the matter on merits as well and concurred with the view which had been taken by the trial court. In the result, the appeal was dismissed. The present revision has been directed against this order.

3. The first submission made before me on behalf of the applicant was that his appeal under Section 75 of the Act was clearly maintainable and the view taken by the lower appellate Court is erroneous. After hearing counsel for parties I am not inclined to agree with this contention. Section 45 of the Act provides for general powers of Courts. In so far as it is relevant for the present purpose it reads :--

'5 (1) Subject to the provisions of this Act. the Court in regard to the proceedings under this Act shall have the same powers and shall follow the same procedure as it has and follows in exercise of the original civil jurisdiction.

(2) .....'

It would be seen that part I of this Act provides for constitution and powers of the Court and Section 3(1) says that the District Courts shall be the courts having jurisdiction under this Act. Section 5, as noted above, provides for general powers of Courts and empowers the courts in regard to proceedings under this Act to have the same powers which a court of original civil jurisdic-tion has and also to follow the same procedure as is followed by the latter. In other words for matters of procedure the provisions of the Code of Civil Procedure have been extended to the proceedings under this Act. On this view, certainly for setting aside the ex parte order the remedy of the opposite party lay by way of an application under Order 9, Rule 13 C. P. C. The question, however, arises if once an order has been passed under Order 9, Rule 13 C. P. C. for further remedy it is only the provisions of the Code which have to be looked into or it is to be pursued on the basis of the provisions made in the Act. In my opinion it is only for the purpose of procedure which is to be followed in regard to the proceedings under this Act that the provisions ofC. P. C. have been extended. When the matter comes to substantive rights, one has to find out provisions for them in the Act itself. Right of appeal is a substantive right and it is Section 75 of the Act which provides for the filing of appeal. Sub-section (1) will be relevant for the present purpose. It reads :--

'75 (1) 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, and the order of the District Court upon such appeal shall be final :

Provided that the High Court, for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit.'

The second proviso to this sub-section as also Sub-sections (2), (3) and (4) are not relevant for the present purpose. It would be seen that the key words which confer a right of appeal used in Sub-section (1) are 'aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction'. In other words the impugned decision or order should have been passed in the exercise of the insolvency jurisdiction. Further, the words 'by a decision come to or an order made' are words of a wide amplitude. They will certainly cover the impugned order which had been made by the trial court in exercise of insolvency iurisdiction and against that order an appeal did lie to the District Court to which such court was subordinate.

4. In re Pedda Iswara Reddy AIR 1948 Mad 520 one of the impugned orders was granting an application under Order 1, Rule 10 C. P. C. praying that certain alienees from the insolvent may be added as party respondents to an insolvency application, and an order excusing delay in filing the former application. The question for decision was whether an appeal lay to the District Court from such orders. The view taken by the court was that 'Section 5 cannot override the provisions of Section 75 in so far as the latter section confers right of appeal in any instance. It is not permissible to read the provi-sions of Section 75 with a further modification that the provisions are subject to the provisions of the Civil Procedure Code in regard to appeals.' The court proceeded to observe that the only question, therefore, for consideration was whether the orders made are orders made or decisions come to in the exercise of insolvency jurisdiction and if they are so, than appeals lie to the District Court. On the facts of that case the answer given was in the affirmative. This decision was followed by the Andhra Pradesh High Court in G. N. Mal-liah v. Laxmayya : AIR1970AP289 and an order of the subordinate court condoning delay in proceeding. under the Act was held appealable to the District Court. There is a decision of our court as well in Dwarka Dass v. Kanhaiya Lal, 1964 All LJ 38 and therein the scope of the expression 'a decision come to or an order made' was explained. The view taken was that the expression 'a decision come to' in the exercise of insolvency jurisdiction includes a finding upon an issue material to the determination of the entire case. There is nothing in Section 75(1) to curtail the right to one of an appeal against a final decision only. In that case the question was as to whether an appeal lay under Section 75(1) againsl an order holding that the petition is maintainable and it was held that the appeal was maintainable. (Also see Laloo Ram v. Har Narain Lal reported at page 812) in the same volume) (1964 All LJ).

5. Learned counsel for the opposite parties, however, contended that under Section 75(1) an appeal against an interlocutory order is not provided for and in support of his contention he died a decision of this Court in Wall Moham-mad v. Higan Lal : AIR1936All80 In that case during the pendency of appeal the District Court had passed an order impleading the legal representatives of the deceased debtor and the question was as to whether against that order a second appeal lay before this court. It was held that no such appeal lies. This case was considered in Dwarka Dass (Supra) and the view taken was that in the case 'the court was not concerned with the meaning of the word' decision 'with reference to an Insolvency court.' In my opinion, therefore, the decision in Wali Mohammad's case will not be ofmuch help to the opposite parties and in view of what has been discussed above, it is now settled that an appea] lies to the District Court from a decision 'come (to?) or an order made in exercise of insolvency jurisdiction'. Since in the instant case the order on the application of opposite party No. 1 under Order 9, Rule 13 C. P. C. was passed by the trial court in the exercise of insolvency jurisdiction, appeal lay against it to the District Court to which it was subordinate. The view taken to the contrary by the lower appellate Court is erroneous in law.

6. The next question is as to whether this court can interfere in the concurrent finding recorded by the courts below that the opposite party No. 1 had been able to establish that there was sufficient cause for his non-appearance on the date fixed. As for the powers of this court while deciding a revision under the first proviso to Section 75(1) of the Act or Section 25 of the Provincial Small Cause Courts Act reference may be made to the decision of a Division Bench of this Court in Laxmi Kishore v. Har Prasad Shukla, 1979 All WC 746. It has been laid down that the Court deciding a revision under Section 25 of the Provincial Small Courts Act has to satisfy itself that the trial court's decree or order is according to law. The question arises as to what is meant by a decree or order according to law and for that purpose some of the instances given by Beaumont C. J. in Bell and Co. Ltd. v. Waman Hemrai, AIR 1938 Bom 223 were quoted with approval. These instances are :- where the court had no jurisdiction in the matter, where a party had not been given a proper opportunity of being heard, or that the burden of proof had been placed on the wrong shoulders or where the court had passed its decision on evidence which should not have been admitted. The court can interfere where it comes to the conclusion that there has not been a proper trial according to law. Certainly the court ought not to interfere merely because it thinks that possibly the Judge who heard the case may have arrived at a conclusion which the High Court would not have arrived at. Reference was also made to the decision of the Supreme Court in Malim Ayyappa Naicker v. Seth Manghraj Udhavdas Firm : [1969]3SCR698 where the phrase 'according to law' occurring in the first proviso to Section 75(1) of the Act was under consideration. It was observed that while exercising that power the High Couri is by and large bound by the findings of fact reached by the District Court.

7. It has been submitted before me on behalf of the applicant that in the instant case the finding of the trial court is vitiated because instead of giving a finding on the question involved, the finding was given on another consideration and it was that the insolvent was possessed of sufficient property to discharge his debt. The appellate court did record a finding of affirmance but in doing so, it did not take into consideration the merits of the case rather was led away by considerations that a creditor has got a legal right to prosecute and oppose the discharge application or else the purpose of adjudication of a person as insolvent will be defeated and then proceeded to observe that the affidavit of the creditor was in affirmative about the fact in respect of the allegation about his brother at Delhi and the same could not be successfully controverted in the counter affidavit filed by the insolvent. According to the learned counsel there was a misreading of the counter affidavit which had been filed by the applicant in the case. According to the learned counsel for the opposite party No. 1 it was a clear finding of fact recorded by the courts below on an appreciation of the two affidavits and this court will not be justified in interfering with the same. In my opinion the finding recorded by both the courts below is vitiated and this court can interfere. As noted above, the question for consideration was as to whether there was or not sufficient cause shown for non-appearance on the date fixed in the case. The trial court instead of adverting to this aspect of the case addressed itself to the financial condition and the paying capacity of the insolvent. The appellate court as well instead of recording any clear finding in regard to the sufficiency of cause persuaded itself to be influenced by the fact that the creditor has a right to prosecute and oppose the discharge application and secondly that the allegation made in the affidavit had not been controverted by the other side. There was a clear misreading of the affidavit whichhad been filed by the present applicant in the case. He has stated in his affidavit that on the date fixed Rashid was present in Amroha. He has also stated that on that date Rashid Ahmad had not gone to Delhi. Anyhow this is a question which should be gone into and decided by the fact finding authority and in my opinion the matter should be referred back for reassessment of the evidence and for giving a finding in this behalf.

8. In the result, therefore, the revision succeeds and is allowed and the order passed by the lower appellate Court is set aside. The appeal is restored to its file with a direction to decide it according to law. There will be no order as to costs in this court.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //