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MohiruddIn Mollah Vs. Gayan Nath Poddar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1928Cal221
AppellantMohiruddIn Mollah
RespondentGayan Nath Poddar and ors.
Cases ReferredP. Hanmayya v. Ramayya A.I.R.
Excerpt:
- .....in council on 25th february 1920 and had come into operation. a question was raised before the district judge whether the matter should be determined on the basis of the provisions of the insolvency act, 1907 or the insolvency act, 1920. the district judge held that the provisions of the new act were applicable. he investigated the case on the merits and held that the application was not bona fide. in this view he dismissed the application.2. we are of opinion that the district judge was clearly in error when he dealt with the application under the provisions of the new act. the nature of the right enjoyed by the debtor under the provincial insolvency act, 1907 was considered by the judicial committee in the case of chhatrapat singh v. kharag singh a.i.r. 1916 p.c. 64, sir lawrence.....
Judgment:

1. This appeal is directed against an order of dismissal of an application made by a debtor to be adjudicated an insolvent. The application was presented on 18th September 1919 when the provisions of the Provincial Insolvency Act of 1907 were in force. The presentation of the application is an act of insolvency under Section 4, Clause (F), which provides that a debtor commits an act of insolvency if he petitions to be adjudged an insolvent under the provisions of that statute. The petition complied with the requirements of Section 6, Sub-clause (3), which ordains that a debtor shall not be entitled to present an insolvency petition unless his debts amount to Rs. 500. The debtor stated that the total amount of money claimed against him was Rs. 1,269. The application was registered and notice was directed to be issued to the creditors through registered posts. The 14th November 1919 was the date fixed for hearing. On that date, one Sarat Chandra Chaudhury and fifteen others put in a petition of objection in which they stated that the debts of the petitioners amounted to Rs. 1,985. There can be no question that in these circumstances an order for adjudication should have been made as a matter of course. The case, however, was adjourned from time to time till 4th September 1920, when it was taken up for disposal. Meanwhile, the Provincial Insolvency Act, 1920 had received the assent of the Governor-General in Council on 25th February 1920 and had come into operation. A question was raised before the District Judge whether the matter should be determined on the basis of the provisions of the Insolvency Act, 1907 or the Insolvency Act, 1920. The District Judge held that the provisions of the new Act were applicable. He investigated the case on the merits and held that the application was not bona fide. In this view he dismissed the application.

2. We are of opinion that the District Judge was clearly in error when he dealt with the application under the provisions of the new Act. The nature of the right enjoyed by the debtor under the Provincial Insolvency Act, 1907 was considered by the Judicial Committee in the case of Chhatrapat Singh v. Kharag Singh A.I.R. 1916 P.C. 64, Sir Lawrence Jenkins pointed, out that

if the conditions prescribed by the Act are satisfied, the Act entitles a debtor to an order of adjudication. This does not depend on the Court's discretion, but it is a statutory right, and a debtor who brings himself properly within the terms of the Act is not to be deprived of that right on so treacherous a ground of decision as an abuse of the process of the Court.

3. We are unable to hold that the provisions of the new Act, which have substantially altered the pre-existing law, could be given retrospective operation so as to take away the right enjoyed by the debtor under the Act of 1907 which was in force when the application was made : Colonial Sugar Refining Co. v. Irvine [1905] A.C. 369. The view we take is in accord with that adopted in P. Hanmayya v. Ramayya A.I.R. 1921. Mad. 272.

4. The result is that this appeal is allowed and the order of the District Judge discharged. We make the order which should have been made by him, namely, the order of adjudication.

5. We direct that the records be sent down to the District Judge so that he may take steps to give effect to our order.


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