Ramajodhia and another vs (Firm) Hazari Lall-Mathura Prasad

Varma, J.—This miscellaneous appeal arises out of an appellate order of the District Judge of Saran by which he set aside the order of the learned Munsif, setting aside a sale and ordering that the execution ease be struck off as illegal and invalid. One Lalchand applied to be adjudged an insolvent and he was adjudged an insolvent on 14th May 1931. On that date the order said that the framing of the schedule and the appointment of a Receiver wore to be considered on 15th June 1931. On 15th June 1931, when the case was put up before the Court it appears that the creditors had not till then proved their debts and the order passed thereon was "File." On 7th May 1932, an application for discharge was made and an objection by the present respondent, who was creditor No. 9 in the insolvency case, was filed on 27th July 1932. On the very next day, that is, 28th July 1932, the execution proceedings out of which this appeal arises were initiated. There is one more incident which should be mentioned before I come to the merits of the cage and that is that on 17th December 1932, there was an application by the present appellants to be substituted in place of Lalchand, the present appellants being his sons. That application was subsequently rejected. The learned Munsif was of opinion that the execution initiated by the present respondent was incompetent inasmuch as the estates of the insolvent were in seisin of the Court and that the insolvency case had not terminated on the date on which this execution petition was filed. The lower appellate Court agreed with the view of law taken by the learned Munsif; but looking at the order-sheet he seems to have fallen into an error in thinking that the proceedings were terminated on 15th June 1931, because the order on that date ran as follows :

"Creditors have not proved their debts: file." The lower appellate Court further mentions that the proceedings terminated when the petition of the sons for substitution was dismissed by the Insolvency Court. The lower appellate Court evidently over-looked the previous order that was passed on 14th May 1931, which makes it clear that the records were to be put up on 15th June because certain steps were expected to be taken by the creditors; and simply because the word "file" occurs in the order, it does not mean that the proceedings terminated inasmuch as the same order-sheet shows that various applications were subsequently filed in connexion with those proceedings from time to time. Similarly it cannot be said that because the substitution petition of the present appellants was rejected therefore the insolvency proceedings terminated. We are concerned with the state of affairs that existed on the day on which the present execution petition was filed and that was filed on 28th July 1932, before the death of Lalchand, the father of the appellants. That being the position, it cannot be said that the insolvency proceedings had terminated on the date the execution proceedings were initiated and that being the misapprehension on which the order of the lower appellate Court is based, I would set aside the order of the lower appellate Court and restore that of the Munsif. The appeal is allowed with costs throughout.

Courtney-Terrell, C.J.

I agree.