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IN THE HIGH COURT OF BOMBAY
(IN INSOLVANCY)
M.S. Rane, J.
Re: Ismail Akbarali Chitalwalla.... Debtor.
Notice of Motion No. 8 of 1995 in Petition No. 25 of 1994, decided on 7/8-3-1995.
Advocates appeared :
Kishore P. Jain with Miss. S.A. Chitalwala, for Insolvent/Debtor.
P.V. Shah with Miss J.P. Manek, for the petitioner Creditors.
K.B. Poojari, Official Assignee-in-person.
Jitendra D. Kanse, to whom the notice of motion is addressed is also present.
Section 21 (3).
See Constitution of India, Article 226J,
PRESIDENCY TOWNS INSOLVENCY ACT, 1909
Sections 9(1) & 9-A (as applicable to Maharashtra State)-Bombay Presidency Town Insolvency Rules, 1909, Rules 52-E, 61 & 62-Notice-Service of-If not proper, adjudication order liable to be set aside.
In the matter herein, the Petitioning Creditors themselves have conceded that there was a "confusion" in the description of the debtor and his address. What is more important is that, despite specific allegations of fraud against K, he did not bother to file any affidavit although the Notice of Motion was specifically directed against him and served upon him. The attempt was made to file affidavit of K at belated stage when Court started
dictating the judgment.
In that, after conclusion of argument advanced at length yesterday i.e., on 7th March, 1995, the Court started dictation of the judgment, which remained in conclusive for want of time as the Court rose for the day and commenced today i. e., on 8th March, 1995, when attempt was made to tender the affidavit of K which was objected by the Debtor and rightly and justifiably so and was not accepted by the Court as the same was an after thought device and unexplained as to why not filed earlier which would have facilitated the debtor to answer. This only reflects upon the conduct of the petitioning creditors and their employee, needing no further comment.
The conspectus of the above discussion is that there arises grave doubt, a legitimate one about the service upon the debtor. On the circumstances, it has to be held that there was no proper service effected upon the Debtor as required under the Rule and as a result thereof the order of adjudication passed against him has to be set aside.
Section 112 and Rules 52-E, 61, 62 framed under.
Debtor-No proper service upon as required under Rules-As a result thereof order of adjudication passed against him to be set aside.
2. The Debtor has also claimed various other reliefs such as ordering inquiry and initiation of criminal proceedings against one Jitendra D. Kanse, the employee of the petitioning Creditor for making false affidavit of service of process in the petition upon the Debtor. At the outset, it may be stated that the principal ground urged by the Debtor in support of this application is of non-service of the Insolvency petition herein as also the Insolvency Notice issued therein upon him. In as much as the Debtor has alleged fraud by the petitioning Creditor in the matter of service of process of the petition and the Insolvency Notice.
3. It is noticed that the Petitioning Creditor is the Award holder passed by the Co-operative Court against the Debtor and two others who are not before the Court. It is further noticed that the petitioning Creditor is the Co-operative Credit Society registered under the Maharashtra Co-operative Societies Act and they filed a dispute before the Co-operative Court for the recovery of certain amount advanced to the principal borrowers (not parties to this petition) and the Debtor herein who was a guarantor in which Award has been made by the Co-operative Court, including the Debtor herein.
4. As the said Award remained uncomplied with the Petitioning Creditor took recourse to the Insolvency proceedings under the provisions of Presidency Towns Insolvency Act. They issued notice being Notice No. N/164 of 1993 dated 11th November, 1993 which according to the petitioning Creditor was served upon the Debtor. A joint affidavit of service made by Shri Jitendra D. Kanse, employee of the Creditor and the Bailiff of the Sheriff of Bombay has been filed being dated 7th March, 1994 which shows that the Debtor refused to accept the notice and therefore a duplicate copy thereof was affixed on the place of his business mentioned in the title. As however, the Debtor did not respond, the said notice was decided exparte.
5. Then the petitioning creditor presented petition before this Court on 23rd March, 1994 seeking order of adjudication against the Debtor and according to the petitioning Creditor the service of process was effected and joint affidavit of service made by said Jitendra D. Kanse and Bailiff of the Sheriff of Bombay was filed being dated 7th June, 1994 which mentions that the Debtor refused to accept the service which refusal was accepted and treated as a proper service.
6. Then on 4th October, 1994, the Court proceeded to grant the petition of the Petitioning Creditor and passing an Order of Adjudication against the Debtor in his absence. It is the said order which is sought to be set aside in this application.
7. As stated the Debtor has sought to set aside the Order of Adjudication on the ground of non-service of the process in the petition and there being a fraud perpetuated with regard to the service of the process in the petition.
8. The matter was argued at great length. The Petitioning Creditor has filed the affidavit-in-reply which is tendered in the Court to-day itself. The Notice of Motion has also been directed against Jitendra D. Kanse, an employee of the Petitioning Creditor, who is co-deponent alongwith the bailiff of the Sheriff of Bombay, who accompanied the bailiff for effecting service of the process in the Insolvency Notice as also in the petition and alleged to have identified the Debtor. However, the said Kanse who remained present in the Court and who has been duly served with the process in this application has not chosen to file his affidavit in reply. More comments later on.
9. A short point to be considered is whether there is a proper service of the process of the petition upon the Debtor?
10. The joint a
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