Orders affecting the rights of the parties to insolvency petitions are appealable under S. 75 (1) of the Provincial Insolvency Act.

( 1 ) THESE five revision petitions arise out of a common order passed by the learned Civil Judge, Dharwar, in the exercise of insolvency jurisdiction.

( 2 ) A few facts leading to these petitions may briefly be stated. One Sha Velji Kanji died on 2-12-1957, leaving behind some properties and also debts due to some co-operative societies. His legal representatives are said to have transferred all those properties in favour of a few creditors without making any arrangements for the payment of the debts of others who, therefore, filed insolvency applications under S. 9 of the Provincial insolvency Act, against the wife, two daughters son-in-law and five minor children of the deceased debtor. The opponents contended that the petitions against them were not maintainable as they do not come within the meaning of debtors who have committeed any act of insolvency. An application for amendment raising some additional grounds so as to bind the opponents personally was also filed by one of the creditors. The lower Court allowed the amendment in its order dated 2-11-1968, and, in the same order, it has held that the insolvency petitions are maintainable only against the major members, but dismissed the same so far as they are directed against the minors. Aggrieved by this order, the other creditors nos. 1 and 2 have filed the above revision petitions. That part of the order dismissing the insolvency applications against the minors is rightly not challenged before me by anyone.

( 3 ) MR. K. R. D. Karanth, learned Counsel for the first respondent, has raised a preliminary objection against the maintainability of these petitions on the ground that the order of lower Court is appealable under s. 75 of the Provincial Insolvency Act. It is, therefore, necessary to decide this point first before entering into the merits of the other contentions.

( 4 ) THE Provincial Insolvency Act is a special enactment creating a special Court and in the matter of appeals in insolvency cases, we must look into the provisions of S. 75 of the Act. The relevant portion of S. 75 of the Act runs as follows:" 75. Appeals- (1) The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District court may appeal to the District Court and the order of the district Court upon such appeal shall be final: provided that the High Court, for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit. "the order impugned in the instant case was passed by the Court of the civil Judge in the exercise of its insolvency jurisdiction and that Court is undisputedly subordinate to the District Court. If, therefore, that order is appealable then, the appeal must lie in the first instance, to the District court. The question is whether the finding given by the insolvency court about the maintainability of the petition is either a 'decision' or an order within the meaning of S. 75 (1 ).

( 5 ) THE scope of the section came up for consideration before several high Courts. In Wamanrao Deorao v. Shrikumar Jaikumar, AIR. 1946 Nag. 42 a Bench of the Nagpur High Court has held that a finding of the Court that it has got jurisdiction to entertain the insolvency petition, amounts to a decision within the meaing of S. 75 (1) of the Act, even though it does not dispose of the entire claim. In Madanlal Jhunjhunwala. v. H. H. The Nawab Sayed Reza Ali khan, AIR. 1940 Cal. 244. Narasing Rau, J. of the Calcutta High Court (concurring with nasim Ali, J. ,) said that under S. 75 (1), a person aggrieved by the preliminary decision on the point of jurisdiction has a right of appeal from that decision and was under no obligation to appeal only against the final order of adjudication. Similar is the reasoning of a single Judge of the Punjab High Court in

Click Here to Read the rest of this document