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1977 Supreme(Ker) 274

Judges : GEORGE VADAKKEL
NARAYANA PANICKER - Appellant
Versus
KUNJU PENNU - Respondent
Case No : M. F. A. No. 20 of 1976, 140, 160 of 1976, 48, 62,109,135,154 of 1977
Decided On : 12/05/1977
Advocates Appeared :
N. Raghava Kurup; For Appellants K. L. John; K. G. Devarajan; Joseph M. Madathil; P. K. Balasubramanian; As amicus curiae

The main legal point established is that the Insolvency Act, 1956 exhaustively governs the right of appeal, forums of appeal, and the subject-matter of appeal in insolvency proceedings, and the forum of appeal is determined solely by the provisions in the Insolvency Act.

Headnote:

Insolvency Jurisdiction - Insolvency Act, 1956 - S.3, S.79(1) - Chaturbhuj Mahesri v. H. Agarwalla (AIR. 1925 Calcutta 335), Madhorao Deorao v. Nago (AIR. 1923 Nagpur 80), In the matter of Kuppuswami Vanniar (AIR. 1955 Madras 554) - S.13 of the Kerala Civil Courts Act, 1957 - Debi Prasad v. Jammu Das (ILR. 23 Allahabad 56) - S.7 of the Insolvency Act, 1956 - S.79(2) - Srikantiah v Honne Gowda (AIR. 1955 Mysore 97) - Padmanabhan v. Harihara Iyer (1964 KLT. 244) - Mohamed Haji v. Abdul Rahman (31 Indian Cases 507)

Fact of the Case:

The appeals were from Sub Courts orders in insolvency proceedings. The question was whether the appeals should be filed in the High Court or in the concerned District Court.

Finding of the Court:

The Court found that under S.3 of the Insolvency Act, 1956, District Courts are vested with insolvency jurisdiction. Appeals from orders passed by a Sub Court lie to the District Court to which that Sub Court is subordinate in matters of insolvency jurisdiction, and not to the High Court.

Issues: The main issue was the forum for filing appeals from orders in insolvency proceedings, and the interpretation of relevant provisions of the Insolvency Act and the Kerala Civil Courts Act.

Ratio Decidendi: The Court held that the Insolvency Act, 1956 exhaustively and exclusively deals with the right of appeal, forums of appeal, and the subject-matter of appeal in insolvency proceedings. The Court also clarified the applicability of S.13 of the Kerala Civil Courts Act, 1957, and emphasized that the forum of appeal is determined solely by the provisions in the Insolvency Act.

Final Decision: The Court directed that the appeals should be filed before the respective District Courts to which the Subordinate Judges Court that passed the concerned orders is subordinate.

Judgment :-

1. These are appeals from Sub Courts orders in insolvency proceedings. Are these appeals to be tiled here or in the concerted District Court is the question for consideration.

2. Under S.3 of the Insolvency Act, 1956 District Courts are the Courts vested with insolvency jurisdiction. The proviso to that section enables the Government to invest any Court subordinate to a District Court with such jurisdiction by issuing a gazette notification. It is by virtue of power conferred by such notification that the Sub Courts passed the orders under appeal Any Court on whom insolvency jurisdiction is competently conferred by a notification issued under the proviso to S.3 of the Act, is, for the purpose of exercising jurisdiction under the Act, a Court subordinate to a District Court. If so, under S.79(1), appeals from orders passed by a Sub Court lie to the District Court to which that Sub Court is subordinate in matters of insolvency jurisdiction, and not to this Court. The District Court, to which a Court (on whom insolvency jurisdiction is competently conferred by Government), would be subordinate, is that District Court, which, but for a gazette notification under the proviso, would have dealt with the insolvency case in question.

3. The above view is supported by the decisions in Chaturbhuj Mahesri v. H. Agarwalla (AIR. 1925 Calcutta 335), in Madhorao Deorao v. Nago (AIR. 1923 Nagpur 80), and in In the matter of Kuppuswami Vanniar (AIR. 1955 Madras 554). The Calcutta Case concerned an order passed by the Deputy Commissioner of Darjeeling who had been invested with Subordinate Judge's powers, and on that basis, with insolvency jurisdiction by a government notification, and the other two cases, orders passed by Subordinate Judges. The same principle has been laid down even in respect of orders passed by Assistant District Judges and Additional District Judges who were invested with insolvency jurisdiction by notification issued under the Proviso to S.3 of the Act. See Ah Fwaik v. Receiver, Bailiff, District Court (AIR. 1934 Rangoon 155), Bhagwanji v. Premji (AIR. 1959 Bombay 47), Moolmal v. Lal Singh (AIR. 1939 Sind 221) and Chiragh Din v. Fateh Mohammad and others (AIR. 1933 Lahore 307). The Allahabad High Court also has taken the same view in Gokul Chand v. Babu Ram (AIR 1952 Allahabad 423) in respect of an order in an insolvency case passed by a Civil Judge who was invested with insolvency jurisdiction by a Government notification, though with respect to orders passed by Additional District Judges, a different note appears to have been struck by that Court in two earlier cases, Makhaw Lal v. Sri Lal (ILR. 34 Allahabad 382) and Emperor v. Chiranji Lal (ILR. 36 Allahabad 576). These decisions have been commented upon by Subtahmany Sastri in his Commentaries on Provincial Insolvency Act, 3rd Edition, revised by Madhavan Nair, who later was a judge of this Court. At Page 501 of the said Commentaries it is pointed out as follows:

"In the absence of a similar provision in the Civil Courts Act, it is conceived, an Additional District Judge cannot be assigned insolvency work without being invested with insolvency jurisdiction by a notification. It has been held that an appointment as an Additional District Judge under S.26 (1) of the Central Provinces Courts Act does not mean an appointment of an Insolvency judge under the Act, and that an appeal from an order of such Court lies to the District Court and not to the High Court."

4. It is also necessary to advert to an argument advanced on behalf of the appellants in these cases founded on the Kerala Civil Courts Act, 1957. Some reliance was sought to be placed on S.13 of the Act as per which

"Appeals from the decrees and orders of a Munsiff's Court and where the amount or value of the subject-matter, or the suit does not exceed ten thousand rupees, from the Original decrees and orders of a Subordinate Judge's Court shall, when such appeals are allowed by law, lie to the District Cou










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