CHAMAN LAL Vs. SUDHIR CHANDRA

JUDGEMENT

(1.) THESE two appeals arise out of insolvency pro ceedings and have been filed by the petitioning creditor.

(2.) IT appears that certain trans ferees of the debtor applied for being impleaded as party to insolvency pro ceedings before an adjudication order was made. The learned Insolvency Judge rejected the application on the ground that the transferees have no locus stand for appearing in the pro ceedings at that stage. The purchaser can be made a party only in proceed ings under Section 53 of the Insolvency Act. The learned Judge observed that from a perusal of Sections 7, 9 and 10 of the Provincial Insolvency Act. it would be apparent that a purchaser is not interested either in the allowing or dismissal of the application. His re medy is under Section 53 of the Insolv-r ency Act which will not be barred by any order that may be passed under Section 9.

(3.) WHEN the present appeals came up for hearing reliance on behalf of the petitioning creditor was placed on a Single Judge decision in Chanda Lal v. Ram Charan in Civil Revn. No. 178 of 1969, D/- 27-1- 1969 (All). That Civil Revision was directed against an order refusing an application for implead-ment of a transferee of the debtor. The learned Judge observed that under Sec tion 9 of the Act what has to be seen is the conduct of the debtor and whe ther the debtor has committed any act of insolvency. Once the order has been passed under Section 9 of the Act ad judging the debtor an insolvent, it will always be open to a transferee to plead in proceedings under Sections 53 and 54 of the Act that the transfer was valid. The learned Judge relied upon Division Bench case. Ram Lakshman v. J. K. Kapoor, 1963 All LJ 623 = (AIR 1965 All 80) and observed that he was bound by this Division Bench decision which has specifically overruled an other single Judge decision. Sheoraj Bahadur Mathur v. Abdul Aziz, AIR 1956 All 68. The learned Judge hear ing the present appeals felt that the decision in Chanda Lai's case requires reconsideration and so he referred the appeals to a larger Bench. That is how these cases has come before this Bench.