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2006 Supreme(Gau) 536

IN THE HIGH COURT OF GAUHATI (AGARTALA BENCH)
IQBAL AHMED ANSARI AND A.B. PAL, JJ.
Kajal Gan – Appellant
Vs.
Smt. Hazara Khatun and Ors. – Respondent
L.P.A. No. 4 of 2001
Decided On: 06.06.2006

Advocates:
Advocate Appeared
For Appellant/Petitioner/Plaintiff: B. Das, Sr. Counsel and D.K. Bhattacharjee, Adv.

Territorial jurisdiction for insolvency petitions under the Provincial Insolvency Act, 1920 is determined by the debtor's ordinary residence, and the insolvency petition can be filed where the debtor resides.

Headnote:

Insolvency - Territorial Jurisdiction - Provincial Insolvency Act, 1920, Section 11

Fact of the Case:

The appellant sought to be declared insolvent under the Provincial Insolvency Act, 1920, after a recovery proceeding was initiated against them. The District Judge, West Tripura, returned the insolvency petition, stating lack of territorial jurisdiction. The appellant appealed this decision.

Finding of the Court:

The Court found that the insolvency petition could have been filed in the Court of District Judge, West Tripura, as the appellant resided within its territorial jurisdiction, contrary to the lower court's decision.

Issues: The main issue was whether the District Judge, West Tripura, had territorial jurisdiction to decide the insolvency petition.

Ratio Decidendi: The Court interpreted Section 11 of the Provincial Insolvency Act, 1920, and held that the insolvency petition could be filed where the debtor ordinarily resides, which in this case was within the territorial jurisdiction of the District Judge, West Tripura.

Final Decision: The appeal was allowed, and the impugned order was set aside. The case was remanded to the District Judge, West Tripura, for disposal in accordance with law.

JUDGMENT

I.A. Ansari, J.

1. This Letters patent o appeal has arisen out of the judgment and X order, dated 14-5-2001, passed in F.A. No. 5.197 of 1996, whereby the appeal has been o dismissed and the order, dated 2-7-1999, passed by the learned District Judge, West Tripura, Agartala, in Civil Misc. (Insolvency) Case No. 1 of 1996, has been upheld.

2. The material facts giving rise to this Letters Patent appeal may be noted as follows:

By an award, passed in Title Suit (MAC) 5 of 1986, the learned Motor Accident Claims Tribunal, South Tripura, directed the present appellant, as owner of the offending vehicle, to pay Rs. 1,70,000/- as compensation to the claimant. As the compensation, so awarded, was not paid to the claimant, a recovery proceeding was initiated. On receiving the repeated notices for payment of the said compensation amount with the interest, which had accrued thereon, the appellant herein, made an application under Section 7 read with Section 10 of the Provincial Insolvency Act, 1920, seeking to be declared an insolvent and for absolving him from liability to pay the amount due under the said award. By order, dated 2-7-1996, passed in the Insolvency Proceeding, which had given rise to Civil Misc. (Insolvency) Case No. 9 of 1974, the learned District Judge, South Tripura, held to the effect that since the said recovery case stood registered with the Certificate officer, Udaipur, which falls under the territorial jurisdiction of the District Judge, South Tripura, the Court of the District Judge, West Tripura, Agartala, had no territorial jurisdiction to decide the application filed by the present appellant seeking to be declared insolvent and that the application for insolvency be returned to the petitioner-appellant so that the same can be filed in the Court of competent jurisdiction. Against the dismissal of his said application, the appellant preferred an appeal under Section 75 read with Sections 4 and 11 of the said Act. This appeal came to be registered as F. A. No. 179 of 1996 aforementioned. By the order, dated 14-5-2001, the learned single Judge has held to the effect that since in MAC Case No. 5/86, the present appellant had already contested the claim proceedings and had surrendered to the jurisdiction of the Court at South Tripura and the award had been passed after according hearing to the parties concerned and that the recovery proceeding was also pending within the district of South Tripura, the learned District Judge, West Tripura, had acted legally and justifiably in returning the application to be filed in an appropriate Court. The conclusions, so reached by the learned Single Judge, are under challenge in the present appeal.

3. We have heard Mr. B. Das, learned senior Advocate, appearing for the appellant. None has appeared on behalf of the respondents.

4. For appreciation of the real controversy involved in the present appeal, it is necessary to take note of Section 11 of the Provincial Insolvency Act, 1920, which reads as follows:

11. Court to which petition shall be presented. Every insolvency petition shall be presented to a Court having jurisdiction under this Act in any local area in which the debtor ordinarily resides or carries on business, or personally works for gain, or if he has been arrested or imprisoned, where he is in custody;

Provided that no objection as to the place of presentment shall be allowed-by any Court in the exercise of appellate or provisional jurisdiction unless such objection was taken in the Court by which the petition was heard at the earliest possible opportunity, and unless there has been a consequent failure of justice.

5. From a careful reading of Section 11 of the said Act, it becomes abundantly clear that an insolvency petition can be entertained by a Court within whose jurisdiction the debtor, ordinarily resides or carries on business or personally works for gain or if he has been arrested or imprisoned, where he is in custody. In other words, under Section 11, a pe








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