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The Allahabad Bank Ld. Vs. Murlidhar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported in14Ind.Cas.589
AppellantThe Allahabad Bank Ld.
RespondentMurlidhar and ors.
Excerpt:
.....that when a petition is put in under that sub-section, notices shall be served on the insolvent and the other creditors and that the court shall hear their objections if any. in our opinion, the judge of the small cause court was perfectly right in hearing the objections put in by the other creditors......was insufficient. it accordingly rejected murlidhar's petition, murlidhar then appealed to the district judge making as respondents to his appeal the insolvents and the receiver, but he did not make any of the creditors respondents. the district judge allowed the appeal on the ground that the proceedings in the court of small causes, held upon the petition of murlidhar, were irregular and contrary to law. he set aside the order of judge of the court of small causes and directed him to take up the petition of murlidhar again, and to dispose it off with references to the remarks made in his (the learned judge's) judgment. this is an application for revision by the allahabad bank, limited, which has a claim against the insolvent for over rs. 10,000. it is urged on behalf of the bank.....
Judgment:

1. This is an application for revision of an order of the District Judge of Cawnpore, setting aside an order of the Judge of the Small Cause Court of Cawnpore, under the Provincial Insolvency Act. Harish Chander and others applied to the Small Cause Court to be declared insolvents. In due course, an order of adjudication was made, a Receiver was appointed and the 5th of September 1908 was fixed for the proof of their debts by the creditors. A large number of creditors put in proofs and in December 1903 a schedule was prepared in the ordinary way under Section 24 of the Act, Nearly a year later, on November 19th 1909, Murlidhar presented a petition to the Court praying that his name might be entered in the schedule of creditors. He put in an affidavit showing that his claim amounted to over Rs. 53,000. The Court caused notices of the application to be served on the Receiver and the creditors whose names were already in the schedule and, after lengthy proceedings which it is unnecessary to detail, came to the conclusion that the proof of the debt was insufficient. It accordingly rejected Murlidhar's petition, Murlidhar then appealed to the District Judge making as respondents to his appeal the insolvents and the Receiver, but he did not make any of the creditors respondents. The District Judge allowed the appeal on the ground that the proceedings in the Court of Small Causes, held upon the petition of Murlidhar, were irregular and contrary to law. He set aside the order of Judge of the Court of Small Causes and directed him to take up the petition of Murlidhar again, and to dispose it off with references to the remarks made in his (the learned Judge's) judgment. This is an application for revision by the Allahabad Bank, Limited, which has a claim against the insolvent for over Rs. 10,000. It is urged on behalf of the Bank that it was entitled to be heard in the Court of the District Judge in support of the order of the Small Cause Court and that the learned District Judge's view of the law is incorrect. The learned Judge has held that when an application is made, as in this case under Section 24, Sub-section (3) of the Provincial Insolvency Act, the creditors whose names are already in the schedule are not entitled to be heard in opposition to the petitioner, that the question arising upon such a petition is one between the petitioning creditor and the Court, that all other creditors must stand aside at that stage and that if the petition is accepted, the other creditors may move the Receiver to take action or may themselves take action under Section 25 of the Act, Section 24, Sub-section 3, distinctly provides that when a petition is put in under that sub-section, notices shall be served on the insolvent and the other creditors and that the Court shall hear their objections if any. In the face of the language of this sub-section, it is impossible to hold with the learned District Judge that the other creditors were not entitled to be heard upon the petition of Murlidhar. It is unnecessary to point out how deeply they are interested in the matter. The Act evidently contemplates that the Other creditors shall be heard before the debt of a creditor who comes in at the last moment is entered in the schedule. In our opinion, the Judge of the Small Cause Court was perfectly right in hearing the objections put in by the other creditors. The Judge of the Small Cause Court disposed of the petition of Murlidhar on the merits. There has been no decision on the merits in the Court of the District Judge. In our opinion, the District Judge should, under the circumstances of the case, have caused notices of this appeal to be given to all the creditors and have heard any of them who chose to appear to resist the appeal and the learned Judge should, in our opinion, have disposed of the appeal on the merits. Under Section 46 Sub-section 1 of the Insolvency Act, we set aside the order of the District Judge and direct that the appeal be restored to the pending file of his Court and be disposed of according to law. Costs in this Court, which will include fees on the higher scale, will be costs in the cause, and be disposed of by the District Judge.


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