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Sarbhu Lal Vs. Mahesh Das - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1931All224; 129Ind.Cas.557
AppellantSarbhu Lal
RespondentMahesh Das
Excerpt:
- - 8,000 the creditors of sarbhulal were defeated or delayed......us is that because mahesta das had obtained a decree on his mortgage therefore he was no longer a secured creditor within the meaning of section 2 (1) (c), provl. insol act. that section defines a secured creditor as 'a person holding a mortgage charge or lien on the property of the debtor or any part thereof as a security for a .debt due to him from the debtor.' the argument of counsel is that the mortgage security merges in a decree and therefore the decree-holder cannot be considered a secured creditor. no authority has been put before us for this proposition and we consider that the secured creditor who has obtained a decree is not thereby precluded from making an application under sections 7 and 9, provl. insol . act.3. the second point which was argued before us was that there was.....
Judgment:

Bennet, J.

1. These are two appeals which have been brought in this Court. No. 10 of 1929 is brought as a second appeal from order and No. 167 of 1929 is brought as a first appeal from order. In neither case do appeals lie to this Court under the provisions of Section 75, Provl. Insol. Act. We have however examined the records and heard learned Counsel for the appellant with a view to seeing, whether either of these matters require to be examined as a revision. In regard to No. 10 of 1929, the insolvent Sarbhulal complains of an order adjudicating him an insolvent. This order was passed on the application of a creditor Mahesh Das. Mahesh Das sued on the mortgage executed by Sarbhulal and obtained a preliminary mortgage decree. It was open to Mahesh Das to have a final decree for sale prepared on this preliminary decree. Instead of doing so he made an application to the insolvent Court on 30th August 1928 to have his judgment-debtor Sarbhulal adjudged an insolvent.. This was based on an act of insolvency alleged an have taken place on 13th July 1928.

2. Now the first point which has been taken before us is that because Mahesta Das had obtained a decree on his mortgage therefore he was no longer a secured creditor within the meaning of Section 2 (1) (c), Provl. Insol Act. That section defines a secured creditor as 'a person holding a mortgage charge or lien on the property of the debtor or any part thereof as a security for a .debt due to him from the debtor.' The argument of counsel is that the mortgage security merges in a decree and therefore the decree-holder cannot be considered a secured creditor. No authority has been put before us for this proposition and we consider that the secured creditor who has obtained a decree is not thereby precluded from making an application under Sections 7 and 9, Provl. Insol . Act.

3. The second point which was argued before us was that there was no evidence on which the learned District Judge could come to the conclusion that an act of insolvency had been committed. The particular act alleged against the insolvent was that on 13th July 1928 he had made a gift to the widow of his brother of a house valued at Rs. 8000. This fact was admitted. There were two mortgages on. other portions of the property of Sarbhulal, and it was found as a fact on his own statement that his remaining property, which was not secured and which he had not transferred by the gift, was less than Rs. 1,000 in value. The particular property which was secured to Mahesh Das was valued by Mahesh Das at Rs. 2,500 and eventually sold for Rs 3,750. The decree of Mahesh Das amounts to Rs. 4,613-15-0. There was also another creditor Asaram. It has not been shown that there was no evidence before the learned District Judge on which he could arrive at the finding of fact, that by the transfer of a house valued at Rs. 8,000 the creditors of Sarbhulal were defeated or delayed. We consider therefore that it is not shown that the order adjudicating the plaintiff insolvent was in any way an order with which we should interfere. Accordingly we dismiss No. 10 of 1929 with costs including counsel's fees on the higher scale in this Court.

4. The other appeal, No. 167 of 1929, is .against a sale of 1st January 1929. No objection was taken definitely that that sale was invalid either to the insolvency Court or to the District Judge. All that we are shown is an application dated 7th January 1929 by which the District Judge is asked to direct the receiver not to execute the sale deed until the decision of the appeal on the question of adjudication. The only matter alleged in that application is that the respondent very hastily caused the receiver to sell the property. In the grounds of appeal to this Court other matters are alleged, such as that the property was sold without sufficient advertisement. New matters of that kind cannot be admitted for the first time in revision. We consider that no case has been made out for interference in revision of the order of the lower Court and we dismiss this appeal also with costs including counsel's fees on the higher scale in this Court.


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