Back
1949 Supreme(Nagpur) 58
HIGH COURT OF NAGPUR
Hidayatullah, R Kaushalendra Rao
SHANKARLAL AND ANR – Appellant
Versus
RADHA KISAN LAXMINARAYAN AND ANR – Respondent
Miscellaneous Second Appeal No. 129 of 1945
Decided on : 07-07-1949
A V Khare, G R Mudholkar, J R Chandurkar, R S Dabir, S N Kherdekar, T B Pendharkar, Y V Jakatdar, Advocates
The main legal point established in the judgment is that an insolvent loses all right, title, or interest in his property upon the passing of the vesting order in insolvency and therefore cannot be considered 'aggrieved' by the decision.
Headnote:
Section 75 - Right of Appeal - Provincial Insolvency Act - [Section 75, Provincial Insolvency Act] - The court discussed the interpretation of Section 75 of the Provincial Insolvency Act and held that the clause 'aggrieved' qualifies all the categories of persons mentioned in the section. The court also examined whether the debtor or insolvent can be regarded as a person 'aggrieved by the decision' and concluded that the insolvent loses all right, title, or interest in his property upon the passing of the vesting order in insolvency, and therefore, cannot be considered 'aggrieved' by the decision.
Fact of the Case:
The appellants, adjudged insolvents, appealed against the inclusion of a creditor in the list of scheduled creditors. The Insolvency Court did not permit the Receiver to prosecute his appeal, and the District Judge held that the insolvents had no right of appeal.
Finding of the Court:
The court found that the insolvents had no right of appeal under Section 75 of the Provincial Insolvency Act.
Issues: The main issue was whether the insolvents had a right of appeal against the inclusion of a creditor in the list of scheduled creditors under Section 75 of the Provincial Insolvency Act.
Ratio Decidendi: The court held that the insolvent loses all right, title, or interest in his property upon the passing of the vesting order in insolvency and therefore cannot be considered 'aggrieved' by the decision.
Final Decision: The appeal was dismissed with costs.
1. The only question involved in this appeal is whether under Section 75, Provincial Insolvency. Act, an insolvent has -a right of appeal against an order including a creditor in the list of scheduled creditors.
2. The facts are stated briefly here. The appellants were adjudged insolvents on 6-12-1939. Shri V.R. Oke, respondent 2, was appointed receiver. Respondent 1, Radhakisan Laxminarayan claiming to be a secured creditor of the debtors made an application under Section 47, Provincial Insolvency Act, for the inclusion of his name in the list of scheduled creditors. Subsequently respondent 2--Receiver also made an application purporting to be under Section 4, Provincial Insolvency Act, read with Sections 34 and 47 for a declaration that the respondent Radhakisan Laxminarayan is not a creditor of the debtors.
3. Both these applications were decided together and the new creditor's name was included in the list of scheduled creditors. It may be pointed out that the insolvents made no objection in the Insolvency Court and were not represented.
4. Against the order two appeals were filed. One was by the Receiver and the other by the insolvents. The Insolvency Court did not permit the Receiver to prosecute his appeal on the score of unnecessary expense inasmuch as the insolvents had also appealed, and the Receiver withdrew his appeal.
5. The appeal of the insolvents came up before the District Judge, Akola, who, by his order dated 16-12-1944, held that the insolvents had no right of appeal. Against this order, Appeal No. 129 of 1945 has been filed. The insolvents stated that if it be held that no second appeal lay, the appeal be treated as an application for revision.
6. The question involves interpretation of Section 75 of the Act. The words of that section material to this case are:
The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District Court may appeal to the District Court....
It was argued that the debtor has an absolute right of appeal and there is no need for him to show that he is aggrieved in any particular manner. In other words, it was contended that the phrase ''aggrieved by a decision'' and so forth qualify only 'person'. It was argued in the alternative that even if the debtor has to make out a grievance, that grievance is found in the depletion of the balance to which the insolvent would be entitled after his discharge and reference is made to Section 67 of the Act. It was contended that the inclusion of fresh creditors in the list of scheduled creditors is likely to reduce the surplus and the insolvent has thus an interest in protecting the surplus. On the other side, it was argued that the word is 'debtor' and not 'insolvent'. In other words, the rights of appeal come to an end in so far as the debtor is concerned when the order of adjudication is passed.
7. In our opinion, the wording of Section 75(1), first paragraph admits of but one construction, namely that the clause 'aggrieved' etc. qualifies all the four categories of persons mentioned there. This is also settled by a catena of cases to all of which we need not refer. In Lalchand Hirachand v. Tuljaram Raoji, 1942 AIR(Bom) 27, Beaumont C.J. and Sen J., gave reasons which, in our opinion, are unanswerable. This is what the learned Chief Justice said:
If one reads the words 'aggrieved by a decision' and so forth as qualifying only 'any other person,' then the debtor, a creditor and the receiver, under the terms of the section, are granted a right to appeal to the District Court without any indication of what they may appeal against. It seems to me that one must read the words 'aggrieved by a decision' and so forth as qualifying all the persons who are entitled to appeal. The construction is supported by the second proviso to Sub-section (1) which gives a right of second appeal to the High Court to any such person aggrieved by a d
