Skip to content


Sakhawat Ali Vs. Radha Mohan and anr. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1919All284; 49Ind.Cas.816
AppellantSakhawat Ali
RespondentRadha Mohan and anr.
Excerpt:
.....of a benefit which he might have received if some other order had been..........the objections were dismissed and the sale confirmed. in our opinion the insolvents have no right of appeal to this court. further, they had no right to make the original application. an insolvent can always tender himself as a witness, but this would not make him a party. the original application erroneously describes the insolvents as opposite parties' and alleges that the sale is calculated to cause them severe loss.' a moment's reflection will show that this is an untenable proposition. as a matter of law, during the administration of an insolvent's estate, an insolvent has no legal interest in the property vested in the trustee, and no locus standi in the administration of the estate. section 22 of the provincial insolvency act enables the insolvent to make an application to.....
Judgment:

1. This is an appeal against an order of the District Judge of the 12th of November 1917 brought by two persons who have been adjudicated insolvents. The application to the Insolvency Court, on which the order was made, was called 'objections.' It asked the Court not to confirm a sale which had taken place under the direction of the Receiver of certain property which had belonged to the insolvents. The grounds upon which the application was made were (1) certain alleged irregularities in the sale and (2) sale at an alleged under-value. The objections were dismissed and the sale confirmed. In our opinion the insolvents have no right of appeal to this Court. Further, they had no right to make the original application. An insolvent can always tender himself as a witness, But this would not make him a party. The original application erroneously describes the insolvents as opposite parties' and alleges that the sale is calculated to cause them severe loss.' A moment's reflection will show that this is an untenable proposition. As a matter of law, during the administration of an insolvent's estate, an insolvent has no legal interest in the property vested in the trustee, and no locus standi in the administration of the estate. Section 22 of the Provincial Insolvency Act enables the insolvent to make an application to the Insolvency Court against any act or decision of the Receiver 'if he is aggrieved' by such act or decision. He cannot be aggrieved in the legal sense of the word in the sale of property in which he has no interest. This Court decided in Jhabba Lal v. Shib Charan 37 Ind. Cas. 76 : 39 A. 152 : 15 A.L.J. 1 that a creditor has no locus standi apart from the Receiver in an application made by a stranger to the bankruptcy claiming adversely to the estate and, therefore, no right of appeal against, a decision on such application, which he did not like It was there laid down, adopting the decision of Lord Justice James in an English case cited in the judgment, that 'a person aggrieved' within the meaning of Sections 22 and 46 must be a person who has suffered a legal grievance, a person against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, but that the words do not mean a man who is disappointed of a benefit which he might have received if some other order had been made. Similarly it has been held in Ladu Ram v. Mahabir Prasad 37 Ind. Cas. 936 : 39 A. 171 : 15 A.L.J. 31 that a creditor who makes a complaint of misconduct against an insolvent is not a person aggrieved and entitled to appeal if the Insolvency Court dismisses the complaint. The right of appeal is alleged to exist in this case under Section 46 (3). Leave to appeal has been given but leave cannot create a right which has not otherwise been conferred by the Act. The Act being framed upon the English measure, the principles and policy of the English Bankruptcy Law must be followed where they are not inconsistent with the express provisions of the Act. It was suggested in argument in support of the appeal that the insolvent has an interest in the surplus which may arise after distribution. It has long been settled by the English Court of Appeal that this view, as a matter of law, is unsound He has no legal interest but merely a hope or expectation. See Ex parte Sheffield, In re Austin (1879) 10 Ch. D. 434 : 40 L. T. 15 : 27 W.R. 622. The same Court in Leadbitter & Harvey, In re (1879) 10 Ch. D. 388 : 48 L.J.Ck. 242 : 39 L.T. 283 : 27 W.R. 267 decided that although an insolvent was entitled to the surplus, he was not a party interested in the costs of an insolvency proceeding, James, L.J., said: 'A bankrupt can do nothing to embarrass the administration of the estate. The mischief would be enormous.' We think that this observation applies with even greater force in India where the facilities for appeal and delay are greater. We hold that the insolvents in this case were not ' persons aggrieved' within the meaning of Sections 22 and 46 of the Provincial Insolvency Act, and upon this ground the appeal must be dismissed. We dismiss it accordingly with costs.


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