Creditor's right to attend a private examination of an insolvent is not absolute, governed strictly by provisions of the Presidency Towns Insolvency Act, 1909, and requires court's discretion.

1. This notice of motion has been taken out by one K. P. P. Nayar as the applicant. Smt. Kanta Pravin Mehta is the insolvent. Dr. Kishan Baldev Mehta and Smt. Mridula Mehta are the petitioning creditors. By prayer (a) of the notice of motion, the applicant seeks permission to remain present at the time of private examination of the insolvent to assist the Official Assignee in the interest of the general body of creditors. By prayer (b), the applicant seeks permission to furnish to the Official Assignee specific information regarding the estate and affairs of the insolvent which she is to be asked in her private examination and this the applicant seeks in the interest of the general body of the creditors of the insolvent. This notice of motion was taken out on 15th December, 1990.

2. The notice of motion was made absolute granting both the aforesaid prayers by Daud J. by his order dated 18th June, 1991. Against that order, the insolvent preferred Appeal No. 561 of 1991. That appeal was disposed of by the Division Bench (P. D. Desai, C. J. and K. Sukumaran, J.) by its order dated 4th July, 1991 and the order of Daud, J. was set aside. The notice of motion was remanded to the single Judge with a direction to give an opportunity to the parties to place on record further materials, if any, in support of their respective versions and to decide the notice of motion afresh in the light of all the factual and legal contentions which may be advanced. Pending further hearing and disposal of the notice of motion, the further examination of the insolvent was stayed.

3. In pursuance of the direction given by the Division Bench, the applicant has filed further affidavit in support of the notice of motion which is dated 2nd September, 1991. The insolvent has filed affidavit in reply dated 1st October, 1991 and the applicant has filed affidavit in rejoinder dated 19th November, 1991.

4. Heard arguments of Mr. Gursahani, the learned Counsel appearing for the applicant, and Mr. Madan, the learned Counsel for the insolvent who opposed the notice of motion. The petitioning creditors have not remained present and no Counsel appeared for them. Mr. Rajani, Advocate, who is present in Court, stated that he was 'watching' the proceedings on behalf of the petitioning creditors.

5. The relevant facts that are necessary to be stated in order to appreciate the background in which the applicant seeks permission to remain present at the private examination of the insolvent by the Official Assignee are these:

6. The petitioning creditors filed the insolvency petition on 27th June, 1989 seeking an order of adjudication against the insolvent debtor on the ground that the debtor has refused to make payment to them towards the amounts deposited with her by them. According to the petitioning creditors, the debtor was indebted to them in the sum of Rs. 1,17,344.81. An order of adjudication was passed on the said petition on 1st August, 1989 recording that the debtor had committed an act of insolvency on 29th May, 1989. As a consequence of the order of adjudication, all the estate and effects of the insolvent vested in the Official Assignee.

7. In course of time, private examination of the insolvent under S. 27 of the Presidency Towns Insolvency Act, 1909 , was fixed the Official Assignee. The applicant intended to remain present at the said examination and engaged services of Advocate Mr. G. J. Bijlani and authorised him to appear on behalf of the applicant before the Deputy Official Assignee in t