Suhrawardy and Duval, JJ.
1. This appeal arises out of an insolvency proceeding before the District Judge of Midnapore. The appellants are some of the claimants who complain that the learned District Judge has neither enquired into their claims nor passed proper orders under the law. It is not necessary to go into the claims set up by them as prima facie they are based on some documents produced by them. The Receiver appointed in the case submitted a report in which he stated that as the insolvent was in possession of the properties he thought that they belonged to him. The learned District Judge did not take any evidence on the question of title raised by the claimants though an affidavit was filed in support of the claim. After hearing the pleaders of the parties he passed the following order: 'Creditor No. 1 urges that as the investigation of the various claims made by persons who are nearly related to the insolvent wilt mean the trial of so many title suits, it would be preferable not to disturb my predecessor's order and to allow properties to be sold subject to any claims that the objectors may have.' The order referred to above was passed before these claimants came on the scene. The appellants' objection to this order is that under Section 4 of the Provincial Insolvency Act V of 1920 the learned Judge should have decided the question of title raised by the claimants, and if he did not deem it expedient or necessary to decide any such question he should under Section 3 of that Act have held that he had reason to believe that the debtor had saleable interest in the property. As the learned Judge has not done so, his order is bad in law.
2. A preliminary objection has been taken to the competency of the appeal on behalf of the respondent on the ground that the order passed by the Court below is not appealable. The appellants argue that their appeal is competent under Section 75, Clause (2) of the Insolvency Act. That section makes any decision or order of a District Court as specified in schedule I appealable to the High Court. In schedule I one of the orders appealable is an order passed under Section 4 of the Insolvency Act relating to decisions of questions of title, priority, etc. It is argued that as the order of the learned District Judge does not decide any question of title it is therefore not appealable under Section 75, Clause (2). The order passed by the learned Judge apparently was one under Section 4 and if a decision by a Court is open to appeal, presumably, its refusal to pass a decision is also appealable. We accordingly hold that the appeal is competent.
3. With regard to the non-observance of the procedure laid down in Section 4 of the Provincial Insolvency Act, the learned Vakil for the respondent argues that there being enough materials before the learned Judge to show the prima facie title of the insolvent, his order was correct. We do not think that the learned Judge's order can be upheld. Under Section 4 (1) he has the power to decide all questions of title arising in any case of insolvency coming, within the cognizance of the Court. But under Clause (3) if he does not deem it expedient or necessary to decide any question of title but has reason to believe that the debtor has a saleable interest in any property, he may without further inquiry sell such property in such manner and subject to such conditions as he may think fit. If the learned District Judge had stated that on an examination of the record and the materials before him he had reason to believe that the insolvent had a saleable interest in the properties claimed, there would have been nothing to say against his order. But the order as it stands does not indicate that the learned Judge ever applied his mind to determine the question whether the claimants had any title to the properties or whether the debtor had a saleable interest in the properties. Reference in this connection may be made to the case of Jitendra Nath Bhattacharjee v. Fateh Singh Nahor (1921) 26 C. W. N. 921. In that case the Court below had adopted the proper procedure, namely, had refused to enquire into the question of title but on the materials before it, it had reason to believe that the debtor had a saleable interest. The learned Judges held that the decision could not be challenged in appeal as it was in conformity with the provisions of Section 4 of the Provincial Insolvency Act. It may be remarked in passing that that decision was also passed in appeal from the order of the lower Court. We are accordingly of opinion that the order of the District Judge is not in accordance with law and must be set aside.
4. The result is that this appeal is allowed, the order passed by the learned District Judge on the 8th December 1924 set aside and the case sent back to that Court for rehearing of the matter and passing proper orders according to law. The respondent should pay the appellant his costs of the appeal. The hearing fee is assessed at two gold mohurs.
5. Let the rocord be sent down as early as possible.