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In Re: Lalbihari Shah - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1921Cal776,60Ind.Cas.889
AppellantIn Re: Lalbihari Shah
Excerpt:
presidency towns insolvency act (iii of 1909), section 10(sic), schedule ii, section 18 - registrar in insolvency, reference to--mortgage, validity of, power of registrar to decide--appeal from order of registrar--limitation. - greaves, j.1. this matter comes before me by way of an appeal from a decision. of the insolvency registrar of this court. the facts are shortly as follows: on the 23rd july 1914 lalbehari shah and others were adjudicated insolvents upon the petition of a creditor, one motilal boid. he was a creditor for rs. 6,4,000, and he filed a retainer through an attorney mr. s.m. dutt to represent him in the insolvency proceedings. motilal boid is the father of the present appellants before me. he died on the 29th february 1913 leaving him surviving his widow, panni bible, and the appellants his infant sons. he also left a brother dhonraj boid. on the 7th august, 1916 an application was made by the brother as next friend of the infants for examination of certain witnesses under section 36 of the.....
Judgment:

Greaves, J.

1. This matter comes before me by way of an appeal from a decision. Of the Insolvency Registrar of this Court. The facts are shortly as follows: On the 23rd July 1914 Lalbehari Shah and others were adjudicated insolvents upon the petition of a creditor, one Motilal Boid. He was a creditor for Rs. 6,4,000, and he filed a retainer through an Attorney Mr. S.M. Dutt to represent him in the insolvency proceedings. Motilal Boid is the father of the present appellants before me. He died on the 29th February 1913 leaving him surviving his widow, Panni Bible, and the appellants his infant sons. He also left a brother Dhonraj Boid. On the 7th August, 1916 an application was made by the brother as next friend of the infants for examination of certain witnesses under Section 36 of the Insolvency Act, The retainer was signed by him and he made an affidavit that he had no interest adverse to the infants. He signed as next lend and the retainer that he gave to his Attorney was in respect of all the proceedings. On the 23rd August 1916 the mortgagees got an order to prove their mortgage before the Registrar in insolvency under Section 36 of the Second Schedule of the Insolvency Act, and the Official Assignee was directed to sell the premises No. 3/2', Shovabazar, On the 1st September 1916 Panni Bibee was appointed, under the Guardians and Wards Act, as guardian of her infant sons and on the both September 1917 she gave to her brother-in-law Dhonraj Boid a power-of-attorney to act on her behalf. On the 18th September 1916 the mortgaged properties were sold by the Official Assignee, On the 2nd February 1917, Panni Bibee applied for an order to examine the mortgagees under Section 36 of the Insolvency Act and an order was made for their examination It is said that Panii Bibee made the application really as, next friend of the infants and in error of the fast that she was not their next friend. Be that as it may, it appears that all the proceedings before the Registrar in Insolvency were conducted on behalf of Panni Bibee no as next friend of the infants but as a creditor of the insolvents' estate and, of course, she was a creditor of her husband's estate by reason of her position as his widow. On the 6th July 1918 the examination of the witnesses took plane, that is to say, of the mortgagees, for a period of two days and the Assistant Referee, who was then acting as the Registrar in Insolvency, stated that he would go into the question of the validity of the mortgages, although I understand that he arrived at no final decision on that day. On the 3rd February 1919 Mr. Ramfry, the Registrar in Insolvency, stated that he thought that, he would go into the question of the validity of the mortgages and, on the 17th February 1919 the parties agree to the question of the validity of the mortgages being gone into before him. From the 21st to the 27th February the witnesses on behalf of the mortgagees wire examined before him and from the 19th March to the 10th April the witnesses called on behalf of the appellants were examined. On the 12th July 1919 the Registrar in Insolvency signed his findings and, just, before the figures of the amount due on the mortgage occurs this, 'I, therefore, find and report that there is now due on the mortgage the sum of Rs. 27, 000, for principal and interest.' Those findings were filed on the 15th July 1919. On the 25th July 1919 the report of the Registrar in Insolvency was settled and passed and he there states that he had gone into the question of the validity of the mortgages and considered the facts placed before him and he holds that the mortgage is a valid one and that the consideration alleged therein was duly paid, and then he goes to state what is due to the mortgagees. On the 14th August 1919 the report was signed and filed on that day and on the 3rd September 1919 the present appeal was filed. Some dispute has arisen as to whether in fact it was presented on the 3rd September 1919, or on the 4th September. What happened, I understand. Was that on the 3rd September it was tendered on the Original Side in the English Department and that the Attorney who tendered the appeal was then told that it should have been presented in the Insolvency Jurisdiction of the Court and apparently it was presented in the Insolvency Jurisdiction of the Court on the 4th September 1919. It is not contested, certainly for the purpose of this application, that the time to file the appeal, if otherwise in time, would have extended until the re-opening of the Courts after the long vacation. Accordingly, it does not seem to me to matter whether it was in fact filed on the 3rd or 4th September. On these facts being stated to me, two preliminary objections were taken on behalf of the mortgagees. Firs, it was said that the appeal is made or presented by infants without their having; any next friend and I have an application made by the mortgagees asking the appeal should be dismissed with costs to be paid by the Attorney on the ground that no next friend had been named on behalf Of the infants. On the other band, I have another application before me for the amendment of the appeal by inserting the name of the next friend. It see ma to me that, having regard to the provisions of Order XXXII, Rule 2, I have a discretion as to how I shall deal with the matter, when a plaint or other proceedings have been taken without the infant being represented by a next friend, and it does not seem to me, therefor, that there is any substance in this preliminary objection because I shall accede to the application to amend the appeal upon the addition of the name of the next friend, upon the cost' of the mortgagees of appearing on this application and the costs of their application, to which I have already referred, being paid. But there is a more substantial preliminary objection, and that is that the appeal was filed out of time. It is said that the Registrar's findings having been signed on the 12th July 1919 and filed on the 15th, time runs as from or other of these dates or, in any case, at the very latest, from the 25th July 1919, when the report was settled and pasted. On the other hand, it is raid on behalf of the appellants that time did not commence to run until the report was signed by the Registrar on the 14th August 1919. Now, it appears that, in accordance with the practice of the offer, time is taken to run as from the time that the report is signed because I find a note on the application for appeal report signed 14th August 1918--appeal in time--this being signed by the Registrar in Insolvency. It, therefore, remains to consider the provisions of Section 101 of the Presidency Towns Insolvency Act in order to ascertain whether the preliminary objection on this point should prevail or not. Section 101 provides that the period of limitation for an anneal from any act or decision of the Official Assignee or from an order made by an officer Of the Court empowered under Section 6 shall be 20 days from the date of such act, decision or order, as the such may be. Some discussion took place before me on this preliminary question as to whether the Registrar was a person empowered under Section 6 the Act. It is not necessary for me to deal with that now, for that is a question which will arise if 1 decide that the preliminary objection is not well founded. So it only remains for me to decide whether the order of an officer of the Court referred to in Section 101 is, under the circumstances the finding that were filed on the 15th July or the report that was actually signed on the 14th August. The conclusion that I have come to is, that the 20 days provided by Section 101 ran not as from the findings being filed or signed, but as from the matter being completed and the report being signed. That is to say, when the matter is completed and the parties know their position. That, therefore, disposes of the preliminary objection and it now remains for me to deal with the appeal on its merits; but before I do so, I should add, as the matter has been ventilated, that it does not seem to me to matter whether Panni Bibee was alone before the Registrar or whether the infants, represented by a next friend, were before the Registrar, because, even if the infants were not before the Registrar, it is conceded that, being affected by the order that the Registrar has made, they are entitled in any case to appeal. That disposes, then, of the preliminary objection and the two applications that are made, that is to say, with regard to the amendment of the application and with regard to the dismissal of the appeal. I now proceed to deal with the appeal on its merits.

2. I now come to deal with the appeal as presented. The first ground of appeal is, that the Registrar had no jurisdiction to go into the question of the validity or otherwise of the said mortgage in the referents directed to him, and that he erred in adjudicating on the same although the parties consented to that course being adopted.

3. The other grounds of appeal are, secondly that the mortgage transaction was fictitious; thirdly, that he should have found on the evidence that the adjudication was collusive, and so on.

4. Counsel appearing on behalf of the appellant has settled before that all he desires to do at the present time to question the jurisdiction of the Registrar to deal with the validity of the mortgage under the reference to him under Schedule II, Section 18 of the Presidency Towns Insolvency Act, and he asks that there should be deleted from the report all the findings of the Registrar in Insolvency with regard to the validity of the mortgage, and that is the only question that is now before me on this appeal. It seems to me that, although the Registrar dealt with this question by the consent and agreement of the parties, he had no jurisdiction to deal with a question of this kind. Section 6 of the Insolvency Ant states what are the matters they can be referred to the Registrar in Insolvency, viz., to hear debtors' petitions; to hold public examinations of insolvents; to make any order or exercise any jurisdiction prescribed as proper to be made or examined in Chambers; to hear and determine any unopposed or ex parte application; to examine any person under Section 35. The only one of these headings which this could possibly come under would be heading 6(2)(c), but that heading only deals with matters to be dealt with in Chambars, and Rule 5 of the Insolvency Rules specifically lays down what are the matters that are to be heard and determined in open Court which are, among others, 5(d), applications to sot aside or avoid any settlement conveyance, transfer security or payment or to declare for or against the title of the Official Assignee to any property adversely claimed. It seems to me that you only have to read Section 6 of the Presidency Towns Insolvency Act and role 5 to arrive at the conclusion that the Registrar in Insolvency, as indeed I think ,he thought himself, had no jurisdiction to deal with a matter of the kind, apart from consent of parties. He did so, having regard to the consent and on the footing that all the parties interested were suit juris which turns out not to be the case In this vies, the appeal succeeds upon the only point which is now raised before me, that is to say, as to whether the Registrar in Insolvency had any jurisdiction to deal with this question and by his decision adversely affect the infants. I am expressing no opinion on this appeal with regard to the validity of the mortgage and whether it is now open to the appellants to attack the mortgage or not. I make no order an to costs.


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