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1937 Supreme(Cal) 96
CALCUTTA HIGH COURT
Shib Dulal (Dulare) Shukul & Anr. - Appellant
Versus
Kishoreganj Loan Office Ltd. Co. - Respondent
Decided On : 08-11-1937
The Insolvency Court cannot decide whether a person is a debtor within the meaning of the Bengal Agricultural Debtors' Act without evidence, and such a decision must precede any notice issued under the Act.
Headnote:
Insolvency - Bengal Agricultural Debtors' Act - The court set aside the decision of the Additional Subordinate Judge, rescinded the order of adjudication, and stayed the proceedings pending further proceedings before the Board, as the Insolvency Court cannot decide whether a person is a debtor within the meaning of the Act without evidence and such a decision must precede any notice issued under the Act.
Fact of the Case:
The appellants were adjudicated as insolvents on the application of a creditor. During the insolvency proceedings, a notice was received by the Court intimating an application for debt settlement under the Bengal Agricultural Debtors' Act. The Court refused to stay the proceedings, concluding that the appellants were not debtors within the meaning of the Act and that the application before the Debt Settlement Board was not bona fide.
Finding of the Court:
The orders made by the Additional Subordinate Judge were not supported, as the decision on whether a person is a debtor within the meaning of the Act must precede any notice issued under the Act. The decision of the learned Additional Subordinate Judge was set aside, the order of adjudication was rescinded, and the proceedings were stayed pending further proceedings before the Board.
Issues: The main issue was whether the appellants were debtors within the meaning of the Bengal Agricultural Debtors' Act and whether the application before the Debt Settlement Board was bona fide.
Ratio Decidendi: The Insolvency Court cannot decide whether a person is a debtor within the meaning of the Act without evidence, and such a decision must precede any notice issued under the Act.
Final Decision: The appeal was allowed, the orders complained of were set aside, and the proceedings pending in the Court of the Additional Subordinate Judge were stayed pending further proceedings before the Board. There was no order for costs in the appeal as there was no appearance on behalf of the respondent. The rule was discharged.
JUDGMENT
1. This appeal is against the decision of the Additional Subordinate Judge, Second Court, Mymansingh by which he adjudicated the appellants Shib Dulare Sukul and Trilochan Sukul as insolvents on the application of one of the creditors, Kishoreganj Loan Office Ltd. Co. The facts of the case are that during the tendency of the insolvency proceedings, notice u/s 34, Bengal Agricultural Debtors' Act was received by the Court intimating that an application had been received by the Atharabari Debt Settlement Board under Sections 8 and 13(1) of the Act praying for the settlement of the debts of the opposite party who have since been adjudicated insolvents. On receipt of this application, the Court was moved to stay all further proceedings in the case u/s 34 of the above Act. The Court refused to take the action as requested on the ground that the Bengal Agricultural Debtors' Act had got no application, as the opposite parties Shib Dulare Sukul and Trilochan Sukul are not debtors within the meaning of the Act. Their primary livelihood is not agricultural, they are merchants although they have got some landed properties, mostly revenue paying estates. In passing, it may be noted that this conclusion of fact did not appear to be based on evidence recorded during the insolvency proceedings. The learned Additional Sub-ordinate Judge moreover held that the application filed before the Debt Settle-ment Board by the opposite party was not a bona fide application but was made simply for the purpose of obtaining an adjournment of the insolvency proceedings.
2. It seems clear to us that the orders made by the learned Additional Subordinate Judge cannot be supported. It was made mainly on the ground that the opposite parties were not debtors within the meaning of the Act. u/s 20 of the Act itself if any question arises in connexion with proceedings before a Board under this Act, whether a person is a debtor or not, the Board shall decide the matter and it would seem that such a decision must precede any notice issued u/s 34 of the Act. It is not for the Insolvency Court to decide more especially without taking any evidence whatsoever, whether a person is or is not a debtor within the meaning of the Bengal Agricultural Debtors' Act of 1935. On this ground alone, the decision of the learned Additional Subordinate Judge must be set aside and the order of adjudication made against the appellants Shib Dulare Sukul and Trilochan Sukul must be rescinded. In the result, this appeal is allowed and both the orders complained of are set aside. The proceedings now pending in the Court of the Additional Subordinate Judge of Mymensingh against the appellants at the instance of the respondents will be stayed u/s 34, Bengal Agricultural Debtors' Act, 1935 pending further proceedings before the Board. There will be no order for costs in this appeal as there is no appearance on behalf of the respondent. The rule is discharged.
