OFFICIAL ASSIGNEE HIGH COURT BOMBAY Vs. HARADAGIRI BASAVANNA GOWDSINCE DECEASED AND AFTER HIM HIS LEGAL REPRESENTATIVES

JUDGEMENT

(1.) This appeal by special leave arises out of insolvency proceedings taken against the firm of T. A. Doshi, Bombay (hereinafter called the firm) by its creditors on the original side of the Bombay High Court, as well as in the District Court, Bellary. The orders of adjudication passed against the said firm by the two Courts have led to some avoidable complications and delay, with the result that the claim made by the respondents in respect of a portion of the property of the insolvent before the District Court at Bellary still remains to be tried, though the insolvency orders were passed as early as 1950.

(2.) It appears that on January 25, 1950 an application was presented (I. P. No. 2 of l950) in the District Court, Bellary, by some of the creditors of the firm for adjudicating the firm as insolvent, and on December 13, 1950, an Order of adjudication was passed. Pending the adjudication proceedings, the District Court appointed the Official Receiver as interim Receiver at the instance of the petitioning creditors. The Receiver was authorised to take possession of certain goods alleged to belong to the insolvent which were then in transit to Bombay. Accordingly, the Receiver took possession of the said goods and under the orders of the Court disposed of them. The sale proceeds were then deposited in Court. Thereupon, the respondents moved the District Court and claimed that they were entitled to a part of he money deposited by the Official Receiver cause the Railway Receipt in respect of the goods which had been sold by the Receiver had been made over to them by the insolvent for consideration. On this allegation, the prayed that as an interim measure, the sale proceeds should be paid over to them, because they had borrowed money from a bank on the security of the Railway Receipt in question and since the goods had been take over by the Receiver, the bank was demanding immediate repayment of the loan. This application was allowed by the Court and the respondents were permitted to withdraw the amount on giving security and an under taking to re-deposit the amount in Court with interest @ 6% per annum when called upon to do so. In accordance with this Order, the respondents withdrew the money on April 6, 1950. The claim made by the respondents in this way still remains to be tried though they withdrew the amount as far back as 6-4-50.

(3.) Whilst the insolvency proceeding before the District Court had proceeded in this manner, similar proceedings had already been taken against the firm by some other creditors on the original side of the Bombay High Court on April 14, 1950 (I. P. No. 5 of 1950). On this application, an adjudication Order was passed on 17-4-1950. As a result of this Order of adjudication all the properties of the insolvent vested in the Official Assignee of Bombay. The Official Assignee then moved the District Court at Bellary (I. A No. 183 of 1950) and prayed that insolvency proceedings pending against the firm in that Court should be stayed and that all the assets and books of account belonging to the in solvent should be transferred to Bombay. To this application, the respondents were made parties.