S. Suryanarayana and Others vs N. Adinarayana

B.K. Ray, J.—Some of the alienee-creditors in an insolvency proceeding are the Petitioners in this civil revision whereas; opp. party No. 1 is another creditor in the same proceeding. The insolvency proceeding was initiated in the Court of the District Judge (vide 1. P. No. 1 of 1952). That proceeding was transferred to the Court of the Subordinate Judge, Rayagada where it was renumbered as I. P. No. 1 of 1971. When the case was pending in the Court of the District Judge, Jeypore, the present Petitioners filed applications in that case for being included in the roll of creditors in the estate of the insolvents on the ground that they were bona fide purchasers for value of some of the properties of the insolvent. That matter came up before this Court subsequently. In this Court there was a compromise whereunder it was agreed that the Petitioners should be included in the roll of creditors in the insolvents estate subject to proof in accordance with law of the debts to satisfy which the transfers in their favour had been made by the insolvent. In pursuance to that compromise the matter was again taken up by the learned District Judge in I. P. No. 1 of 1952 which was still on his file. The learned District Judge by his order dated 11-1-1965 directed that the Petitioners should be included in the roll of creditors subject to certain conditions specified therein. Against that order the Petitioners again came to this Court (vide M. A. Nos. 80 to 84 of 1965). This Court in those, mise appeals varied the order of the learned District Judge. Thereafter, I. P. No. 1 of 1952 was transferred to the Court of the Subordinate Judge, Rayagada. The learned Subordinate Judge held an enquiry into the Petitioners of the Petitioners praying to be included in the roll of creditors to the estate of the insolvent and allowed them by order dated 4-4-1977. Being aggrieved by that order the opposite party preferred Civil Misc. Appeal No. 4 of 1977 in the Court of the District Judge, Jeypore. The learned District Judge by his order dated 9-4-1977 reversed the order of the, learned Subordinate Judge. Hence the present civil revision by the Petitioners who being some of the alience-creditors from the insolvent wanted to be included in the roll of creditors in the estate of the insolvent in the insolvency proceeding pending in the Court of the Subordinate Judge, Rayagada after being transferred by the District Judge, Jeypore.

Mr. Y. S. N. Murty, learned Counsel for the Petitioners, raises only one point in support of the revision petition. According to him, the insolvency proceeding 10 question was originally initiated in the Court of the District Judge, Jeypore who passed several orders therein including the order dated 11-1-1965 against which the Petitioners had preferred appeals to this Court (vide M. A. Nos. 60 to 84 of 1965). After disposal of those misc. appeals the case again went back to the Court of the District Judge, Jeypore. Sometime thereafter, as the Court of the Subordinate Judge at Rayagada was created and was invested with powers to dispose of proceedings under the Provincial Insolvency Act, the learned District Judge transferred the original insolvency case, i. e., 1. P. No. 1 of 1952, out of which the present revision arises, to the Court of the Subordinate Judge, Rayagada where the case was re-numbered as 1. P. No. 1 of 1971 In spite of this transfer and In spite of re-numbering, the case remained the same as well as the parties. The transferor Court, viz., the Court of the District Judge, did not cease to have jurisdiction to dispose of the case. By transfer the transferee Court, viz., the Court of the Subordinate Judge, Rayagada, assumed jurisdiction to dispose of the case. Therefore, according to Mr. Murty, the transferor Court as well as the transferee Court had concurrent jurisdiction to dispose of the main insolvency case, and as a matter of fact, the transferror Court was in seisin of the case before it was transferred and passed the order dated 11-1-1965 against which the Petitioners had come to this Court in M. A. Nos. 80 to 84 of 1965. When the case went back to the transferor Court after disposal of the misc. appeals the transferor Court, instead of disposing of the case as directed by this Court, transferred the same to the transferee Court. The order dated 9-4-1977 passed by the learned Subordinate Judge is nothing but a continuation of the order dated 11-1-1965 passed by the learned District Judge relating to the same matter in controversy between the parties. In these circumstances, the learned District Judge cannot sit in appeal against the order dated 9-4-1977 of the Subordinate Judge, Rayagada. So it is urged that the appeal (vide Civil Misc. Appeal No. 4 of 19777 against the order dated 9-4-1977 of the Subordinate Judge, Rayagada in the Court of the District Judge was not maintainable at all and the impugned order of the learned District Judge is liable to be set aside being non est in the eye of law having been passed without jurisdiction. Mr, Murty in support of his contention relies upon two decision, Debya v. Phutumani AIR 1933 Part 276 (2) and Jadubala Dasi v. Upendra Nath Saha AIR 1948 Cal. 255, the provisions contained in Sections 23 and 24 of the Bengal, Agra and Assam Civil Court Act, 1887 and Sections 3 and 75 of the Provincial Insolvency Act, 1920. The contention raised by Mr. Murty requires careful scrutiny.

The relevant portion of Section 23 of the Bengal, Agra and Assam Civil Courts Act, 1887 reads as follows:

23(1) The High Court may, by general or special order, authorise any Subordinate Judge or Munsif to take cognizance of, or any District Judge to transfer to a Subordinate Judge or Munsif under his administrative control, any of the proceedings next hereinafter mentioned or any class of those proceedings specified in the order.

(2) The proceedings referred to 10 Sub-section (1) are the following, namely:

(a) xx xx xx

(d) proceedings under the Indian Succession Act, 1865 and the Probate and Administration Act, 1881 which cannot be disposed of by District Delegates; and

(e) xx xx xx

(3) The District Judge may withdraw any such proceedings taken cognizance of by, or transferred to, a Subordinate Judge or Munsif, and may either himself dispose of them or transfer them to a Court under his administrative control competent to dispose of them.

The aforesaid provision clearly goes to show that proceedings under the Indian Succession Act, 1865 and the Probate and Administration Act, 1881 which are originally cognizable by a District Judge can be transferred by a District Judge to a Subordinate Judge as per the general or special order of the High Court. The provision does not authorise the District Judge to transfer any other proceeding under any other enactment which is exclusively cognizable by him to the Court of the Subordinate Judge u/s 23 of the Act. Section 24 lays down that proceedings taken cognizance of by, or transferred to: a Subordinate Judge or Munsif, as the case may be under the last foregoing section shall be disposed or by him subject to the rules applicable to like proceedings when disposed of by the District Judge: provided that an appeal from an order of a Munsif in any such proceeding shall lies to the District Judge. Sub-section (2) of Section 24 of that Act further provides that an appeal from the order of the Distract Judge on the appeal from the order of the Munsif under this section shall lie to the High Court if a further appeal from the order of the District Judge is allowed by the law for the time being in force. Section 24 therefore makes it clear that where a proceeding under the Indian Succession Act, 1865 or under the Probate and Administration Act, 1881 has been transferred by a District Judge to a Subordinate Judge under a general or special order of the High Court, the Subordinate Judge shall dispose of the case so transferred to him subject to the rules applicable to like proceedings when disposed of by the District Judge. It is this provision which has been interpreted in the two decisions relied upon by Mr. Murty. The point decided in the decision reported in Debya v. Phutumani1, was as follows: The Appellant before their Lordships was an applicant before the District Judge for probate of a will. The learned District Judge coming to the conclusion that the matter was contentious transferred it to the Subordinate Judge presumably under the powers granted by Section 23 of the Act 12 of 1887 (Bengal Agra and Assam Civil Courts Act). The learned Subordinate Judge disposed of the matter in favour of the Appellant. An appeal was preferred by the Respondent to the District Judge. It was contended by the Appellant before their Lordships that the District Judge had no jurisdiction to hear the appeal. It was held in that case that Clause (d), Sub-section (2), Section 33 of the Bengal, Agra and Assam Civil Courts Act contemplated one class of proceedings which might be transferred under the main part of the section. In other words, it was held that proceedings under the Succession Act, 1865 and the Probate and Administration Act, 1881 could be transferred by the District Judge under the authority of the High Court given under Sub-section (1) of Section 23 to the Court of a Subordinate Judge. It was further held in that case that u/s 299 of the Succession Act (39 of 1925) every order made by a District Judge by virtue of the powers hereby conferred upon him shall be subject to appeal by the High Court. Section 24 of the Bengal, Agra and Assam Civil Courts Act which lays down that proceedings taken cognizance of by a Subordinate Judge u/s 23 shall be disposed of by him subject to the rules applicable to like proceedings when disposed of by the District Judge was interpreted in that decision to mean that the final order passed by the Subordinate Judge was subject to appeal as provided u/s 299 of the Succession Act (39 of 1925). In the view, their Lordships said that an appeal lay to the High Court against the final order of the Subordinate Judge in a proceeding transferred to him u/s 24 of the Bengal, Agra and Assam Civil Courts Act and the Probate and Administration Act, 1881. For this position reliance was placed by their Lordships on another decision in Sohna v. Khalak Singh ILR 13 All 78. The following passage from that decision was quoted by their Lordships with approval:

I am of opinion that the words which I have the rules relating to appeals, and since an appeal from a District Judge would lie to this Court, therefore an appeal from an order of the Subordinate Judge, when proceedings under Act 40 of 1858 have been transferred to him, also lies to this Court, and not to the Court of the District Judge.

Ultimately, their Lordships of the Patna High Court held that an appeal lay to the High Court against the order of a Subordinate Judge in a proceeding transferred to him under the Succession Act.

In the decision in Jadubala Das v. Upendra Nath Sahu2 relying on the earlier decision of the Patna High Court Debya v. Phutumani1, their Lordships of the Calcutta High Court also laid down that where probate of a will has been granted by a Subordinate Judge to whom such a matter had been transferred by the District Judge under the orders of the High Court u/s 23 of the Bengal. Agra and Assam Civil Courts Act an appeal from such order lay to the High Court and not to the District Judge.

The aforesaid decisions relied upon by Mr. Murty can have therefore no application to the present case which arises out of a proceeding under the Provincial Insolvency Act and not proceedings under the Indian Succession Act and Probate and Administration Act. A proceeding either under the Indian Succession Act or under the Probate and Administration Act can be transferred u/s 23 of the Bengal, Agra and Assam Civil Courts Act by a District Judge to a Subordinate Judge under administrative control. For a proceeding thus transferred Section 24 of the Bengal, Agra and Assam Civil Courts Act applies which says that the proceeding transferred to the Court of the Subordinate Judge shall be disposed of subject to the rules applicable to like proceedings when disposed of by the District Judge. While interpreting this provision it has been laid down in the aforesaid two decision that the order of a Subordinate Judge is subject to the provision for appeal already existing against an order of the District Judge. No assistance can therefore be had from those two decisions in support of the contention of Mr. Murty.

Now corning to Section 3 of the Provincial Insolvency Act, under the said section ordinarily the District Court is the Court having jurisdiction under the Act in respect of insolvency proceedings. In other words, proceedings under the Provincial Insolvency Act have to be commenced in a District Court. But under the proviso to the said section the State Government by notification may invest any Court subordinate to a District Court with jurisdiction in respect of any class of cases under that Act. As a result of this investment, the subordinate Court exercises concurrent jurisdiction with the District Court. Part VI of the Provincial Insolvency Act makes provision for appeals against original orders passed by any Court under that Act. u/s 75(1) of the Act, the debtor, any creditor, the receiver or any other person aggrieved by a decision arrived at or by an order made in exercise of insolvency jurisdiction under the Act by a Court subordinate to a District Court may appeal to the District Court whose order in appeal shall be final. The provision has nothing to do with the provision contained in Section 24 of the Bengal, Agra and Assam Civil Courts Act which lays down that the order of a transferee Court in a case which has been transferred to it by the District Court in exercise of powers u/s 23 of that Act for the purpose of an appeal is subject to the same provision governing an appeal from the order of the District Court which transferred the case. In other words, an appeal from the decision of the transferee Court will lie to the same Court to which an appeal from the District Court will lie. The provision contained in Section 24 of the Bengal, Agra and Assam Civil Courts Act applies to cases mentioned in Section 23 thereof. An insolvency proceeding does not come within the purview of Section 23 of that Act. Therefore, for the purpose of deciding the forum of appeal from an order of a Court subordinate to a District Court in an insolvency proceeding no reference need be made to Section 24 of the Bengal, Agra and Assam Civil Courts Act, because the forum of appeal is provided in Section 75 of the Provincial Insolvency Act according to which an appeal against an order of a Court subordinate to a District Court will lie to the District Court whose decision shall be final. In the case before me it is not disputed that the Subordinate Judge, Rayagada having been invested with jurisdiction to entertain proceedings under the Provincial Insolvency Act by the State Government the District Court at Jeypore transferred 1. P. No. 1 of 1952 to the Court of the Subordinate Judge, Rayagada where it was re-numbered as 1. P. No. 1 of 1971. Therefore, an appeal from an order of the Subordinate Judge, Rayagada in 1. P. No. 1 of 1971 will as provided in Section 75(1) of the Provincial Insolvency Act, lie to the District Court at Jeypore. As per the proviso to Section 75(1) of that Act the appellate order of a District Court is in its turn subject to the revisional jurisdiction of the High Court except an order passed from a decision of a subordinate Court u/s 4 of the Provincial Insolvency Act in which case there is provision for second appeal to the High Court. Regarding orders of the District Court passed in exercise of original jurisdiction under the Provincial Insolvency Act. Section 75(2) of that Act has made provision for appeal. If the order comes within Schedule I to Section 75 the appellate forum is the High Court. In view of these special provisions for appeals in Section 75 of the Provincial Insolvency Act it must be held that an appeal against the original order of the Subordinate Judge, Rayagada in 1. P. No. 1 of 1971 lay to the District Court at Jeypore. The opp party was, therefore, right in preferring an appeal to the Court of the District Judge, Jeypore who had jurisdiction to entertain the appeal. The impugned order passed by the District Judge, Jeypore in that appeal is, therefore, not without jurisdiction as contended by Mr. Murty. The said order is, however, subject to the revisional jurisdiction of this Court. But since Mt. Murty does not challenge the impugned order on any other ground, except on the ground that it has been passed without jurisdiction and since I hold that the Court below had jurisdiction to pass the impugned order, the present revision has to be dismissed.

In the result, therefore, the revision fails and is accordingly dismissed. In the circumstances, there will be no order for costs.

Revision dismissed.