Varshaben A. Shah rep. by father and natural guardian, Amirtlal C. Shah vs Smt. Gina Sargunar

Abdul Hadi, J.—This application by the respondent in the main I.P. 86 of 1988 is to set aside the ex parte order of adjudication dated 17-

7-1989 passed in the said I.P. Despite service effected, the respondent remained ex parte in the I.P. For the hearing on 3-7-1989, she was absent

and the Insolvency petition was posted for ex parte evidence in the next week. Even in the next bearing on 17-7-1989, she was absent. So P.W.1,

the father of the petitioner gave ex parte evidence. Insolvency petition is under S. 9(2) of the Presidency Towns Insolvency Act. After an ex parte

decree dated 7-8-1986 for Rs. 12,001 in O.S. 893 of 1986 on the file of the City Civil Court, Madras, insolvency petition No. 81 of 1988 was

received by the respondent in the insolvency petition, on 7-7-1988. But, despite the said receipt, neither the respondent paid the decree amount,

nor filed an application for setting aside the insolvency notice. It is not denied that under the decree, the respondent in the insolvency petition

(applicant herein) is jointly and severally liable along with another defendant in the suit.

The affidavit filed in support of this application says that the applicant, after receiving the summons in the above said suit, gave vakalat to his

advocate Miss Bala Janaki and that she had filed the vakalat in court on 30-4-1986, but that she did not inform the subsequent development of the

case. But, it is not stated in the affidavit whether the applicant made enquiries with her advocate regarding the development of the case at am time

after 30-4-1986 till 7-7-1988 when she received the insolvency notice. So, it cannot be believed that the applicant was ''under the bona fide

impression'' that the said counsel was taking care of the case. The said affidavit does not also say anything about her defence to the suit claim.

Further even after receiving the insolvency perix notice No. 81 of 1988 on 7-7-1988, she has not taken any steps immediately thereafter for filing a

petition to set aside the ex parte decree, nor has she complained to her advocate Bala Janaki about the latter''s alleged negligence in allowing the

suit to be decreed ex parte. Her present counsel only represents to me that a petition has been filed only in 1989 for setting aside the said ex parte

decree dated 7-8-1986. Even with reference to this, I do not find any averment in the affidavit of the applicant. Further, there is no explanation

why an application to set aside the insolvency notice was not filed after the receipt of the said notice. Further, while she received the insolvency on

7-7-1988 itself, it is strange that in the present affidavit of September 1989 she says� ""Now I understand that an ex parte decree has been

passed."" (emphasis is mine). Thus, the applicant has scant respect for truth.

Even with reference to the subsequent insolvency petition, the applicant says in her affidavit that she received notice on 10-1-1989 and

''immedately'' gave vakalat to the above said Miss Bala Janaki, but nothing is said as to why vakalat was given to the same advocate, despite her

earlier negligence. Once again it is also said that the advocate had not informed her about the development of the case and that she came to know

of the insolvency order on 6-9-1989. Herein again, nothing is said in the affidavit as to whether the applicant made enquiries with the said advocate

any time till 6-8-1989 for about 8 months from 10-1-1989�regarding the said development of the case. No doubt the applicant says that

immediately after 6-9-1989, she went to ''the house of Miss Bala Janaki advocate'' but that the said advocate was not there and that the applicant

was told that the said advocate got married and left the profession. But, it is not stated who told her so. Were not parents or other relatives of the

said counsel there in the said house? Did the applicant enquire from them the address of counsel after her marriage? Nothing is stated in the

affidavit of the applicant about these details. The applicant simply says that her present address is not known to the neighbours. No doubt she says

that she subsequently contacted the said counsel''s senior Venkateswara Rao, who confirmed that the said Bala Janaki got married and left the

profession. The applicant also says that the said senior was the person who introduced the said Bala Janaki to the applicant. However, the

applicant has not filed any affidavit, or, at least a letter from the said Venkateswara Rao regarding the aforesaid allegations nor the applicant had

sent any written notice complaining about the negligence of the said Miss Bala Janaki. In the circumstances, the version given in the affidavit of the

applicant is unbelievable and it is evident that she is only trying to protract the proceedings.

If this application has to be dealt with under O. 9, R. 13, C.P. Code i.e., in view of S. 90(1) of the Presidency Towns Insolvency Act, the ex

parte order can be set aside only if the notice of the insolvency petition was not duly served on the applicant or if the applicant was prevented by

any sufficient cause from appearing when the petition was called, for hearing. In the present case, the applicant herself admits that she received the

notice in this insolvency petition on 10-1-1989. Then, in view of the fact that the version given in the affidavit of the applicant for the absence of

herself and her present counsel on 17-7-1989 is unbelievable, it cannot also be said that the applicant was prevented by any sufficient cause from

appearing on 17-7-1989.

The learned counsel for the applicant, however, contents that in view of the proviso to S. 90(1) read with S. 8(1) of the Presidency Towns

Insolvency Act, O. 9, R. 13, C.P.C. is not applicable to insolvency proceedings and that consequently the wide power given to the insolvency

court under S. 8(1) to ''review, rescind or vary any order'' made by the insolvency Court should be exercised to set aside the above said ex parte

order of adjudication. Learned counsel also, in support of his contention, cited the decision. In the matter of L.W. Nasse AIR 1929 Rang. 229

which also says that the power under S. 8(1) of the Act is very wide. He has also cited an unreported decision dated 3-8-1981 of this Court in

Appln. No. 25 of 1980. No doubt, Shanmukham, J. also observed therein that the power to be exercised under S. 8(1) is much wider than the

one that is visualised under O. 9, R.13, C.P.C. 1908. But, it should be remembered that the wider the discretion, the greater ought to be the care

and circumspection on the part of the court. Dealing with a similar wide power of the Court, the Supreme Court also observed i Smt. Ganga Bai

Vs. Vijay Kumar and Others, thus�

But the exercise of such for reaching discretionary powers is governed by judicial consideration and wider the discretion, the greater ought to be

the care and circumspection on the part of the court.

Even Shanmukham, J. observed in the above said decision thus�""Such exercise of power of court should be exercised judicially. In the light of

what has been stated about the conduct of the applicant throughout and the unbelievable nature of her version in the present affidavit I am not

inclined to exercise the said wide power in favour of the applicant. The facts in the above said decision of Shanmukham, J. are entirely different

from the present one.

In the above circumstances, this application is dismissed. No costs.