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The East India Cigarette Manufacturing Company, Limited Vs. Anaand Mohan Basak and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in58Ind.Cas.10
AppellantThe East India Cigarette Manufacturing Company, Limited
RespondentAnaand Mohan Basak and ors.
Excerpt:
civil procedure code (act v of 1908), order xxxvii, rule 3, order xxxviii, rule 5 - attachment before judgment--consent order charging property with amount of claim--nature of charge insolvency--appeal by secured creditor--receiver made respondent--joinder of all creditors, whether necessary. - .....whose contention that he is in the position of a secured creditor has been overruled by the district judge. the decision of this question defends upon the legal effect of an order made by this court on the 7th march 1918. at that time a suit had been instituted by the appellant against his debtor. two proceedings were before the court, one an application for attachment before judgment under order xxxviii, civil procedure code, the other an application by the debtor for leave to defend the suit instituted against him under order xxxvii, civil procedure code. on the 7th march an order was made by consent. the material part of the order was in these terms: 'upon the defendant consenting to the interim attachment of his property and also consenting to the said property being.....
Judgment:

1. This is an appeal by one of the creditors of an insolvent, whose contention that he is in the position of a secured creditor has been overruled by the District Judge. The decision of this question defends upon the legal effect of an order made by this Court on the 7th March 1918. At that time a suit had been instituted by the appellant against his debtor. Two proceedings were before the Court, one an application for attachment before judgment under Order XXXVIII, Civil Procedure Code, the other an application by the debtor for leave to defend the suit instituted against him under Order XXXVII, Civil Procedure Code. On the 7th March an order was made by consent. The material part of the order was in these terms: 'Upon the defendant consenting to the interim attachment of his property and also consenting to the said property being considered as charged with the re payment of the amount of the plaintiff's claim in this suit, it is ordered that the defendant, within a fortnight from the date hereof furnishing security to the extent of Rs. 5,000, be at liberty to appear in and defend the suit, and it is ordered that the said affidavit be considered as his written statement in this suit with liberty to file a supplementary written statement.' Notwithstanding this consent order, the defendant neither appeared nor defended the suit; nor was security furnished. The question in controversy is, whether the charge created by this consent order was in-tended-to be in operation for the two weeks allowed to the debtor to furnish security or whether the intention was that the charge should remain in operation till re-payment of the amount of the claim. The District Judge has adopted the former view; in our opinion, it is fairly clear that the latter alternative is correct. The security was to be for Rs. 5,000 only. At the date of the order it was doubtful whether the security would ever be furnished. The creditors obtained a consent order which gave them a charge on the property attached, a charge to secure re-payment of the entire amount of their claims. It is not probable that the contention could have been that this charge should be of a temporary character and should be in operation for two weeks only, at the end of which period it might transpire that no security was furnished.

2. The result is that this appeal is allowed, the order of the District Judge set aside and the case remitted to him with the intimation that the charge created by the consent order must be deemed, not of a temporary character, but subsisting till re payment of the claim in the suit. The appellant is entitled to hip costs of this appeal. We assess the bearing fee at five gold mohurs.

3. We may add that it has been suggested by the respondent that other questions arise which may require discussion. It is impossible for us to deal with such questions here; they must be dealt with by the District Judge. It has also been faintly argued that the appeal is not competent, because all the creditors of the insolvent have not been joined as parties. In our opinion, it is not necessary to bring them before the Court. The Receiver is a party respondent. He is in charge of the estate and the duty is cast upon him to distribute the assets amongst the creditors subject to such directions as may be given by the Court. Two of the creditors have obtained leave from this Court to be heard in support of the order made by the District Judge. The other creditors did not appear to contest the claim of the appellant, nor have they expressed a desire to be heard in this Court. IN these circumstances, it is impossible to hold that the creditors who have hitherto taken no interest whatsoever in these proceedings, should all be directed to appear here so that the matter in controversy may be discussed in their presence.

4. Let the record be sent down as soon as possible so that the case may be taken up at an early date.


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