The court has the power to rescind or vary any order made by it under its insolvency jurisdiction, including an order dismissing an insolvency petition, and can entertain an application for substitution of creditors even after the dismissal of the petition.

SRINIVASAN, J.

1. I.P. No. 69 of 1988 was filed by certain creditors for adjudicating Vummidi Ramaiah Chetty Guruswamy Chetty & Sons as insolvents. The petitioners were substituted later by two other creditors. On 15.3.1995 the petition was dismissed as not pressed in view of the endorsement made by the petitioning creditors. On 15.4.1995, the present first respondent filed applications for rescinding the order made on 15.3.1995, for substituting himself as petitioning creditor and for appointing a receiver to take charge of the properties. The applications have been allowed by the learned single judge by his order dated 18.3.1996. These appeals have been filed against the said order.

2. The first contention of the learned senior counsel for the appellants is that the question of substituting creditors in the place of petitioning creditors under Section 92 of the Presidency Towns Insolvency Act (hereinafter referred to as “the Act”) could be entertained only if the petition is pending. Section 92 of the Act is in the following terms:

“Power to Change carriage of petition:

“Where the petitioner does not proceed with due diligence on his petition, the Court may substitute as petitioner any other creditor to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor”.

3. It is submitted that in this case on 15.3.1995 an order has been passed dismissing the Insolvency Petition and no proceeding is pending thereafter. Hence, the other creditors could not have filed an application for substituting them in the place of petitioning creditors and if at all, they may file only fresh petition for adjudication. We are unable to agree with this contention. The application has been filed only under Section 8 of the Act. Under sub-section (1) of section 8 of the Act, the Court may review, rescind or vary any order made by it under its insolvency jurisdiction. It is that provision, which has been invoked by the first respondent In this case, the order which was passed on 15.3.1995 was made on the endorsement made by the petitioning creditor that the petition was not pressed. The Court did not keep in mind that the Insolvency Petition was on behalf of the general body of creditors and that the interest of the general body would be affected if the petitioning creditor, who had filed the petition was permitted to withdraw the same or allowed the same to be dismissed as not pressed. The Court should have directed advertisement of the proposal of the petitioning creditor to withdraw the petition and informed the other creditors that the petition will not be proceeded with. But, that has not been done. If that had been done, the other creditors would have had an opportunity to get themselves substituted in the place of petitioning creditors and proceed further with the application. In as much as such an opportunity had not been given, it was certainly open to them to come with an application under Section 8 of the Act for rescinding the order passed on 15.3.1995 dismissing the petition for adjudication. We do not find any error in the order passed by the learned single judge.

4. The learned judge has considered in detail the various contentions raised on behalf of the appellants herein and found that there was sufficient justification for rescinding the order dated 15.3.1995. It is contended before us that the persons who now seek to entertain the proceedings are depositors, whose claims were barred by limitation. There are two limbs to the argument. One is that the depositors are entitled to get interest only for five years and thereafter interest was not payable. It is submitted that the creditors who want to conduct the proceedings have to restrict the claim for interest upto the period of five years from the date of deposit. This is not a question which can be decided at this stage. What is the amount due should be decided only at a later stage when claim petitions are considered.

5. The other l