( 1 ) A short question is whether the Insolvency Court has any discretion to issue a notice to the opponents-debtors after admitting the insolvency petition and before directing public notice to issue. One more significant fact is that the debtors had already filed a caveat and served copy thereof to one of the petitioning creditors prior to filing of the insolvency petition. Yet without hearing the opponents-debtors the trial Court had passed the following order: General and public notice and special notice to issue according to law. Public notice to issue In Gujarat Government Gazette also. Applicant to deposit Rs. 700/- for the expenses. Notice be issued in daily Jana Satta.

( 2 ) THE debtors filed an application ex. 26 praying that the order of public notice below ex. 1 be stayed and the other orders also be stayed since they were passed without any notice to them (the debtors) It was pointed out in the application that the Caveat Application No. 25 of 1982 was filed in the court on 22/03/1982 and the petitioner No. 1 had received the same on 30/03/1982 and yet the original applicants had obtained ex-parte order of public notice on 7/04/1982. It was pointed out that the order of public notice has likely serious adverse irreparable and irreversible effect on the business and reputation of the opponents-debtors.

( 3 ) THE learned trial Judge heard the application and initially passed an order on 28/04/1982 granting a stay for two days and there- after after full length hearing partly granted the application holding that it is not mandatory on the court that such public notice should be issued immediately mechanically and ordered that the order issuing public notice be stayed till further orders and the application is kept pending for rest of the prayers.

( 4 ) THE original applicants preferred Civil Appeal No. 119 of 1982 to the District Court at Nadiad. The learned Extra Assistant Judge allowed the appeal holding that the trial Court was in error in staying the order regarding issuing of public notice passed below ex. 1.

( 5 ) THE learned Counsel for the petitioners-original debtors has contended that the learned Appellate Judge has clearly gone wrong. The learned Appellate Judge in para 8 of his order holds that as the debtors had filed caveat before filing of the insolvency petition by the creditors it was necessary for the court to hear the debtors before passing any order below ex. 1 and he agreed with the submissions of the learned Advocate of the debtors. However the learned Appellate Judge proceeded further to observe that since the trial Court had given hearing to both the sides it was not necessary to stay the order of public notice and the order of public notice should have been allowed to take effect and implemented. This assumption by the lower appellate Court that the trial Court had heard the parties on the insolvency petition is clearly contrary to record. The order of the trial Court shows that the trial Court has only considered the application ex. 26 for stay of the ex-parte order below ex. 1. On merits whether there was a prima facie case for issuing public notice or not there is no consideration whatsoever. In fact the trial Court had reserved that consideration for a later occasion and had decided only the preliminary question whether the debtors were entitled to any hearing before issuing public notice. Therefore the reasoning of the learned Appellate Judge that the trial Court had heard the debtors on the question of prima facie case and necessity of issuing public notice is contrary to the record and the reasoning given by the appellate Court cannot be sustained under any circumstances. Even the learned Counsel for the original applicants did not make any attempt to support the judgment of the lower appellate Court on that count.

( 6 ) HOWEVER the learned Counsel for the opponents-original applicants has strongly relied on the judgment in the case of Hasmukh Engineering Works and Anr.