The main legal point established in the judgment is the jurisdiction of the Insolvency Court to decide on claims of third parties, including secured creditors, and to expunge or reduce debts in the schedule, as well as the application of Sections 36 and 37 as special rules of substantive law and rules of evidence.

Oldfield, J.

1. In concurring in the order which my learned brother proposes, I do not desire to follow him further than is necessary to support his conclusion.

2. The decision under appeal is in terms that the District Munsif erred in removing the name of 5th creditor, here respondent, from the list of creditors; and we have to consider whether he had power to do this, and, if so, whether we can accept the order made in the exercise of that power. By an irregular and confused course of procedure and pleading, to which my learned brother has referred, that order involved the conclusion, not only that 5th creditors debt was not proveable in the insolvency, but also that the mortgage securing it was invalid. The objection thus allowed was taken as follows in a counter-petition of 1st creditor:--"The mortgage for Rs. 500 said to have been executed by petitioner (the insolvent) and his father in favour of 5th creditor was created for the benefit of the insolvent and with the intention of evading payments of the debts due to 1st creditor and others and nominally, but is not a true debt. Nothing is payable to the 5th creditor."

2. This, it is contended, means only that Exhibit A, the mortgage, offends against Section 53, Transfer of Property Act, and that as it does not come within Section 35 or 36 of Act III of 1907, which is applicable to this insolvency, there could be no adjudication on its validity by the District Munsif in Insolvency or otherwise than in a separate suit, because, shortly, the Insolvency Court cannot adjudicate on claims by or against third parties. The question thus raided is of some difficulty in connection with Act III of 1907 owing to the absence therefrom of any thing corresponding with Section 4 of the present Act V of 1920 or Section 105 of the English Act or the corresponding provisions of previous, Statutes.

3. This contention, it is urged, can be met by reading the objection to Exhibit A as being that there was no debt and no transfer at all, but only a pretence, which could be disregarded and not that there was a transfer which offended against Section 53, Transfer of Property Act, and had to set aside, and, if the question were of property to be reduced to the possession of the Receiver on behalf of the creditors I should be prepared to adhere to my opinion expressed in Official Receiver, Tinnevelly v. Sankaralinga Mudaliar 62 Ind. Cas. 495 : 44 M. 524 : 40 M.L.J. 219 : (1921) M.W.N. 236 : 14 L.W. 503 and hold that, so far as the objection to Exhibit A was of the former description and the question was of discovery within the purview of Section 18(1) and (3), the Insolvency Court was competent to decide it. But in fact the Exhibit A being a simple mortgage, there is no question of possession ; and there is the further difficulty that the language already quoted from the first creditors counter-petition is elastic enough to express objections of both the descriptions above referred to.

4. It is a better argument and one which, I agree, must prevail, that the question is of a claim, not by or against a third party or stranger to the proceedings, but by a creditor, a necessary party to them, which can be made and which the respondent in the present case has chosen to make in the insolvency and with which the Court under Section 24 must deal after hearing other creditors objections; and, as there is no restriction there or elsewhere on the ground on which objections may be made, the Court must adjudicate on them, whether they are that the transactions relied on resulted in no debt or that resulting in a debt, it should be annulled. This, of course, involves that a secured creditor is before this Court primarily to obtain inclusion of his debt in the schedule and only secondarily because the Receiver on behalf of the creditors is concerned to claim the interest in the insolvents property, constituting the security, for their benefit. But the reply attempted is that, if the objection to the decision of