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In Re: Bharat Tea Co. Ltd. and ors. Vs. Ex Parte: Kundanlal Sahani - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberInsolvency Case No. 6 of 1966
Judge
Reported inAIR1981Cal151
ActsPresidency towns Insolvency Act, 1909 - Sections 24(3) and (4)
AppellantIn Re: Bharat Tea Co. Ltd. and ors.
RespondentEx Parte: Kundanlal Sahani
Appellant AdvocateDinen Dasgupta, Adv.
Respondent AdvocatePartha Bose, Adv. for Official Assignee and ;Jayanta Mitra, Adv.
DispositionApplication dismissed
Excerpt:
- .....sahani and for an order directing the other debtor to file the schedule of affairs with the official assignee forthwith and the official assignee be directed to sell the premises no. 67/7, main rohtak road also known as new rohtak road, karolbag, new delhi and for other consequential reliefs.2. it appears that in august, 1963 the petitioner as a creditor instituted a suit being suit no. 1364 of 1963 under order xxxvii of the code of civil procedure for the recovery of rs. 30.058.06 and for interest, receiver, injunction and cost. the said suit was based on 6 hundis drawn by the firm of bharat tea co. by kishenlal sahani alias krishanlal sahani in favour of the said creditor and the said hundis were accepted by the said kishenlal sahani. on 24th jan., 1964, this court passed the.....
Judgment:
ORDER

Salil Kumar Roy Chowdhury, J.

1. This is an application by a creditor for condonation of delay and recording the death of one of the judgment-debtors Kishenlal Sahani and for an order directing the other debtor to file the schedule of affairs with the Official Assignee forthwith and the Official Assignee be directed to sell the premises No. 67/7, Main Rohtak Road also known as New Rohtak Road, Karolbag, New Delhi and for other consequential reliefs.

2. It appears that in August, 1963 the petitioner as a creditor instituted a suit being Suit No. 1364 of 1963 under Order XXXVII of the Code of Civil Procedure for the recovery of Rs. 30.058.06 and for interest, receiver, injunction and cost. The said suit was based on 6 hundis drawn by the firm of Bharat Tea Co. by Kishenlal Sahani alias Krishanlal Sahani in favour of the said creditor and the said hundis were accepted by the said Kishenlal Sahani. On 24th Jan., 1964, this Court passed the decree for Rs. 30,058.06 with interest on the principal sum at the rate of 6% per annum from 1st Aug., 1963 till realisation and cost in favour of the creditor. Thereafter the creditor got the cost taxed by the taxing officerof this Court at Rs. 2,250.39 making the total debt due to the creditor by the partners of the said firm at Rs. 30,508.45 (or Rs. 32,308.45?).

3. Thereafter on the 2nd March, 1966 the petitioner as a creditor filed an application in this Court praying, inter alia, for adjudication of the said Bharat Tea Company and its said partners, being the debtors after the presentation of the said insolvency petition.

4. The petitioner's attorney Mr. B. R. Lodge look out a notice of motion dated 3rd March, 1966 for an order that the official assignee be appointed an interim receiver over premises No. 67/7, Main Rohtak Road, and interim order of receiver and other consequential reliefs. On the 3rd of March, 1966 an interim receiver was appointed by this Court and the official assignee was the receiver who was directed to act on a signed copy of the minute. IT is alleged that the official assignee as an interim receiver has already taken possession of the said property being premises No. 67/7, Main Rohtak Road. The said order dated 3rd March, 1966 appointing the official assignee as the interim receiver has been followed by an order of adjudication by this Court dated 21st June, 1966. It appears from the said order, which is a consent order, that the debtors agreed to pay the creditor by instalment of Rs. 3,000/- within a week and, thereafter Rs. 3,000/- per month beginning from the month of July, 1966 within the last date of each month and all payments were agreed to be made by the debtors to the solicitor for the petitioner Mr. B. R. Lodge. It was also provided in the consent order that if the debtors make a default in paying the money which is to be paid in this week or make two consecutive defaults in payment of the sum of Rs. 3,000/- per month from July, 1966, an order in terms of prayer (a) of the notice of motion should be deemed to have been made on the date of such default and, in that event, the debtor will be liable to costs of this application in terms of prayer (c) of the notice of motion. The official assignee who has been appointed an interim receiver of some properties belonging to the debtor shall continue as such until the debt is paid off. The official assignee shall be entitled to his commission under R. 13 of the Account Rules at 1% of the valuation of the properties for Rs. 55,000/-. If the debtors do not pay the commission to the official assignee the petitioner must pay the same to the official assignee and the sum so paidshall be added to the amount of the debt which the debtors are liable to pay and the same shall be paid by them by instalments. The official assignee shall hand over the possession to the debtors after the debtors succeed in paying off liquidating the debt. Liberty to apply.

5. This order is set out in para 14 of the petition.

5A. It appears that the debtors preferred an appeal from the said consent order dated 21st June, 1966 and also made an application for stay of the said order. The said application and the appeal were dismissed. In the meantime one Sitaram Jhunjhunwala, the landlord of the premises No. 17, Ezra Street, Calcutta, made an application and an order was made on the 19th Nov., 1968 by this Court where it was ordered that upon the insolvent filing the schedule of affairs within a week from date peremptorily, the application pursuant to the said master's summons will stand adjourned till 10th Dec. next, In default whereof, the application shall appear in the list for hearing on the expiry of 10 days from the date hereof.

6. It was further ordered that in the meantime the said official assignee will be at liberty to sell the remaining articles lying in the room in his possession at premises No. 17, Ezra Street, Calcutta, by private treaty upon notice to the said insolvent. It was ordered that the said official assignee to act under that order and the copy of the minutes of that order signed by an officer of this Court. It appears that pursuant to the said order, the official assignee sold the said articles lying at the said premises No. 17, Ezra Street, Calcutta in the year 1968. The petitioner thereafter stated various grounds of illness of his brother, wife and death of another brother and he was also very shocked and sick and tired for unfortunate bereavements in the family and the petitioner was out of Calcutta from time to time from the year 1974 and practically left Calcutta and stayed at Delhi. It also appears that the matter was before the Registrar of Insolvency for annulment and the insolvent Kishenlal (Sahani) took time to file the schedule of affairs but, after sometime, in or about 1974, he died. When no notice was served on the other insolvent debtors for filing the schedule of affairs on or about 3rd March, 1975 the Registrar of Insolvency directed the official assignee to send notice by registered post with acknowledgment due to Sitaram Sahani and Ram Sahani and informed them to file the schedule of affairsby 8th April, J975. It is alleged that the notice was duly served on Sitaram Sahani but it was not served on the other insolvent Ram Sahani as he could not be found. The official assignee was directed to send another notice to Ram Sahani and the matter stayed adjourned from time to time. It is alleged that due to the aforesaid reason, the petitioner could not proceed with the matter and he is also putting up another ground of his ailing sister who died sometime on 6th March, 1978. It is alleged that the insolvents have not yet submitted before this Court the schedule of affairs verified by the affidavit in accordance with the provisions of law under Section 24 of the Insolvency Act, 1909, and the Rules of this Court. Therefore, the present application was filed on the 21st Sep., 1978 and appeared before the Court on the 26th Sep., 1978 and it was made returnable on the 20th Nov., 1978. Leave was granted to serve the debtors at Delhi by registered post.

7. Mr. Dinen Dasgupta appearing for the petitioner submitted that the application should be granted as the insolvent debtors have not filed the schedule of affairs as required under Section 24 of the Presidency Towns Insolvency Act and the Rules made thereunder.

8. Mr. Partha Bose appearing for the official assignee also supported the said application for extension of time for filing the schedule of affairs.

9. It also appears that an order dated 18th Nov., 1968 is referred to in para 16 of the petition in a form as if the application was adjourned for 10 days but it appears that the petitioner has deliberately not mentioned the order made by R. M. Dutta, J. on the 29th Nov., 1968 i.e. 10 days after the said order that the order to file the schedule of affairs by the insolvents, which was made on the 19th Nov., 1968, was to be carried out. It also appears that the same has not yet been carried out till up to date and in the meantime one of the insolvents has died as stated before. Now the present application is sought to be made by the creditor Kundanlal Sahani for filing the schedule of affairs by the surviving debtors. It also transpires that prior to this application an application for annulment of the adjudication of the insolvents has been made by the Official Assignee which is still pending for misterious reason and it appears to me that the present application has been made only for the purpose of nullifying the said application, if possible.

10. After hearing Mr. Dinen Das Gupta for the petitioner and Mr. Jayanta Mitra for the respondent being the surviving debtor who has been declared insolvent by the consent order as hereinbefore stated the present application is barred by limitation in view of the Supreme Court decision in Kerala State Electricity Board, reported in : [1977]1SCR996 , as this is an application under the Presidency Towns Insolvency Act and the default committed by the insolvents in filing the said schedule of affairs was after the order dated 29th Nov., 1968 which is about 12 years back. The right to apply accrued immediately after the said order was made or within a reasonable time thereafter but certainly a right cannot survive for 12 years. It will be gross injustice and abuse of the process of the court to allow this application to be moved after such a long time. The creditor seems to be sitting on the interim order by which the Official Assignee has taken possession of the properties of the insolvents but neither the creditor came up before this Court earlier nor the Official Assignee complied with the provisions of Sub-setion (4) of Section 24 in filing the schedule of affairs which he can do as he has the power to do so.

11. Both the Official Assignee and the creditor have failed to comply with the provisions of Sub-setions (3) and (4) of Section 24 of the Act within a reasonable time from the said order dated 29th Nov., 68. Therefore, there is no escape from the position that the present application is on the face of it barred by limitation and there is no sufficient cause why the delay should be condoned. This will amount to harassing the citizen of India, who has unfortunately been declared insolvent by a consent order which appears to have not been carried out by any person, who is not diligent should be encouraged by the Court to keep the insolvency proceedings pending for an indefinite period without complying with the provisions of the Act and Rules made thereunder. Therefore, I have no hesitation in holding that the application is barred by limitation and there is no ground for extending the time for making this application. The creditor-petitioner has made this application with ulterior motive to stifle the annulment application made by the official assignee which has been kept pending indefinitely and thereafter the present application has been made, that even about one and half year back being filed on the 26th Sep., 1978 after moving it on the 26th Sep., 1978 (sic). This type of dilatory tactics andharassment of the insolvency of a creditor and also the inaction on the part of the official assignee, who is a statutory officer having statutory duties under the Insolvency Act, has failed to comply with the statute and as such no indulgence should be shown to the petitioner-creditor and also the official assignee for their negligence and lack of diligence which will be oppressive and harassing on the debtors. In that view of the matter the application is dismissed with costs.

12. The annulment application made by the official assignee will appear in the list a week hence.

13. Mr. Parma Bose, who is appearing for the official assignee, asked for leave to be given to the official assignee to engage a lawyer for appearance. But at present prior leave has been taken for representation in this Court and all sorts of pleas have been put forward for the absence of the official assignee from the Court and/or obtaining the leave of the Court earlier for engaging a lawyer. In these circumstances, I am unable to grant any such leave. So, the matter is unrepresented by the official assignee and some officers of the office seem to be instructing Mr. Bose and that appears also to be lack of sense of duty on the part of the official assignee in discharge of his statutory duties under the Presidency Towns Insolvency Act in the case like this. It appears that the creditors and the official assignee are acting together to harass the debtor who has been declared insolvent by a consent order keeping this proceeding pending for an indefinite period and making occasional applications for unnecessary costs and expenditure to be incurred and harassment to be caused to such debtors. This sort of thing should be strongly deprecated and stamped out so that the statutory officers should discharge their duties according to law and not to sleep over the matter and thereby making the provisions meaningless and nugatory.

14. Let the matter appear before the Registrar of Insolvency within a week from date for disposal and the parties will be at liberty to apply according to provisions if they are so advised.

15. Mr. Dinen Dasgupta appearing for the petitioner submitted that the application should be granted as the insolvent debtors have not filed the schedule of affairs as required under Section 24 of the Presidency Towns Insolvency Act and the Rules made thereunder.

16. Mr. Partha Bose appearing for the official assignee also supported the said application for extension of time for filing the schedule of affairs.


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