HASUMKH ENGINEERING WORKS Vs. BABUBHAI CHHOTALAL AMIN

JUDGEMENT

(1.) This is an appeal by the original debtors of the In- solvency Petition No. 8 of 1971 of the City Civil Court at Ahmedabad. It was an application given on behalf of the present respondents Nos. 1 and 2 claiming to be the creditors of the appellants-debtors. The allegation was that the opponent no. 1 ( the original appellant no. 1 a partnership firm) and the appellants Nos. 2 and 3 (its partners ) had failed to pay the amount of Rs. 15 0 under a promissory note the amount having been paid by the applicants to the firm on 1-1-1970.

(2.) The said application had been admitted and then a notice was issued to the debtor and also a general notice under sec. 19 (2) of the Provincial Insolvency Act has been ordered to be issued. The present appellants however prayed to the court and requested the court that before a general notice inviting the alleged other creditors of the appellants was issued they should be heard. The learned Judge however on interpretation of sec. 19 (2) held that the issuance of a general notice to the general body of creditors was the inevitable consequence of the admission of the insolvency petition and the court had no authority at law to hear the concerned debtors before issuing the said notice. In the words of the learned Judge: the contentions of the opponents nos. 1 and 2 can only be examined when the main petition comes up for final hearing but at this stage it cannot be said one way or the other whether the said contentions are true or false. It is therefore also necessary that a public notice be issued in this connection of the date of hearing. I do not find in any provisions of the Rules in question which lays down that a public notice should not be issued without making an inquiry as suggested by opponent Nos. 1 and 2. Against the said order the present appellants had filed the first appeal No. 219 of 1972 but it had come to be dismissed summarily by the single Judge of this Court. The present letters Patent appeal has been preferred by the original debtors against the said order of the learned single Judge.

(3.) Mrs. Mehta appearing for the appellants-original debtors urged and urged with some force that at the hands of undiscerning persons claiming to be creditors of the alleged debtors an irreparable damage may be done to the business reputation of the original opponent to the Insolvency petition and subsequent dismissal of the petition and awarding of the costs and even the subsequent liability for damages of the original creditors would be a poor recompense for the debtors. It cannot be gain said that irreparable damage or had could be caused to the alleged debtors who ultimately may turn out to have not committed any act of insolvency and the unhappy situation cannot be retrieved even in an appreciable way.