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Firm, Tohar Mal-uttam Chand Vs. Suraj Bali - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in39Ind.Cas.953
AppellantFirm, Tohar Mal-uttam Chand
RespondentSuraj Bali
Excerpt:
provincial insolvency. act (iii of 1907), section 27 - schedule, when to be settled. - 1. this appeal arises out of an application for execution. the facts are shortly as follows: the decree-holder appellant had a decree against the proprietor of the firm of suraj bali. another creditor of suraj bali presented a petition for his adjudication as insolvent. the firm of the decree-holder was named as one of the creditors in the application. sometime' later (but before any order of adjudication), suraj bali came forward with a proposal for a composition of 4-annas in the rupee. notice of this application was sent to the creditors, including the decree-holder. the decree-holder took no notice and the composition proposal was accepted under the provisions of section 27 of the insolvency act. the other creditors have since been paid 4 annas in the rupee. the decree-holder then.....
Judgment:

1. This appeal arises out of an application for execution. The facts are shortly as follows: The decree-holder appellant had a decree against the proprietor of the firm of Suraj Bali. Another creditor of Suraj Bali presented a petition for his adjudication as insolvent. The firm of the decree-holder was named as one of the creditors in the application. Sometime' later (but before any order of adjudication), Suraj Bali came forward with a proposal for a composition of 4-annas in the rupee. Notice of this application was sent to the creditors, including the decree-holder. The decree-holder took no notice and the composition proposal was accepted under the provisions of Section 27 of the Insolvency Act. The other creditors have since been paid 4 annas in the rupee. The decree-holder then presented an application to execute his decree. He was met by an objection on behalf of the judgment-debtor that the accepted proposal made in the insolvency matter barred the application for execution. The lower Appellate Court has allowed the objection. and dismissed the application for execution. The decree-holder comes here in second appeal and claims that he is not bound by the composition, because (amongst other reasons) Ms claim was never entered in the schedule of creditors. On the strict words of the section there seems to be considerable force in the contention. 'We must, however, bear in mind that the Courts have not yet had much experience in the administration of the Insolvency Act. The composition was accepted by the Court and the decree-holder took no objection at the time though he had an opportunity of doing so. It seems rather against justice when the other creditors took 4 annas in the rupee that the present decree-holder should be at liberty to execute his decree for the full amount. The justice of the case would seem to be met by treating the decree-holder as if he had been placed on the schedule of creditors, and this is the the course we propose to take. We think that the decree-holder ought to be paid 4 annas in the rupee on the decretal amount, and to this should be added interest on the decretal amount from the 1st of March 1915 up to the time of payment into Court. The 'decretal amount' should be taken as including the amount of the decree including costs and the interest payable under the decree up to the 1st of March. The judgment-debtor should deposit this amount in this Court within three months from this date; if he; does so, the present appeal will stand dismissed. In the event of the amount not being paid within the time aforesaid, then the appeal will be allowed and the decree of the lower Appellate Court will be set aside and the case will be remanded to the Court of first instance, through the lower Appellate Court, with directions to proceed, with the, execution of the decree. We may mention for the information of the Court below that the schedule in all insolvency matters ought to be settled as soon as possible and before a composition is finally accepted. The parties will bear their own costs of this appeal and in the Courts below.


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