JIVRAJ GORDHANDAS Vs. GAGANMAL RAMCHAND

JUDGEMENT

(1.) A creditor's petition was presented for adjudicating the appellants insolvents on 3-12-1951. This petition was dismissed on 1-4-1952. On 11-10-1952, the respondents applied to the Insolvency Judge to set aside the order of dismissal and to substitute them in place o? the petitioning creditors. The Insolvency Judge granted that application on 6-1-1953, and from that order this appeal is preferred.

(2.) THE first contention of Mr. Desai is that the Court had no jurisdiction to grant' this application in view of the fact that the application for substitution was made after the petition was dismissed, and reliance is placed on Section 92, Frssidency-towns Insolvency Act. That section provides that "whore the petitioner docs not proceed with due diligence on his petition, the Court may substitute as petitioner any other creditor to whom the debtor is indebted in the amount required by this Act in place of a petitioning creditor. " Mr. Desai is right when he contends that Section 92 refers only to a subsisting petition, and that the order of substitution conanplated by that section can only be made in a petition which is pending before the Court. But in our opinion the order made by the learned Judge, in the first instance, falls under Section 8 and not under Section 92. Section 8 (1) provides that the Court may review, rescind or vary any order made by it under its insolvency jurisdiction, and it has been laid down both here and in the English Courts that the jurisdiction conferred by this section is a very wide and far reaching jurisdiction. It is also in our opinion a very salutary jurisdiction. It must never be forgotten that when a petitioning creditor files a petition for adjudication of a person insolvent he is not in the same position as a plaintiff in a suit, A plaintiff in a suit is 'dominus lite' and he has every right to proceed with the suit or to withdraw it or to allow it to be dismissed for default, but a petitioning creditor is not a 'dominus lite' in that sense, Once he presents a petition, the order that he seeks is not1 only for his benefit but for the benefit of the general body of creditors, and the Insolvency Court at all times has juris-diction over that petition and can control it and regulate it. If the Court was satisfied that the order made by it on 1-4-1952, was not a proper order and that it should not have been made,'it had got jurisdiction under Section 8 (1) to rescind that order and to restore the petition which was dismissed. Therefore, in substance, what Desai J. did was to exercise jurisdiction under Section 8 (1 ). He rescinded the order made by the insolvency Judge on 1-4-1952, and the petition which was dismissed being revived he allowed the respondents under Section 92 to be substituted as petitioners in place of the petitioning creditors.

(3.) THE other contention raised by Mr. Desai is that the petitioners even under Section 92 cannot be; subsututed as petitioners because they cannot avail the miseves of the act of insolvency on which the petitioning creditors originally relied. Mr. Desai says that uader Section 12, Presidency-towns Insolvency Act, a petition must be grounded on an act of insolvency which has occurred within three months before the presentation of the petition, and if the respondents had desired to file an independent petition of their own on 11-10-19a2, Ihey could have obviously not relied on the act of insolvency on. which the petitioning creditors relied, and therefore Mr. Desai says that the respondents should, not have been substituted in place of the petitioning creditors. For this purpose reliance has been placed on two English decisions. The first is a decision reported in -- In re Maugham Ex parte Maugham', (18381 21 QBD 21 (A ). In that case-what was really decided was that the power given to the Court under Section 104, Bankruptcy Act, 1883, which corresponds to Section 8 11) of our Act, could only be exercised by the Court which made the original order. In that particular ease the order-dismissing the petition was mace by the Registrar of the County Court and a County Judge rescinded, that order under Section 104, Bankruptcy Act, and the Court held that that order was without jurisdiction. The other observations of Cave J. at p. 23. in view of this decision are really 'obiter'. The observations are that "the effect of restoring t_':e petition was to extend the time for filing the petition beyond the statutory period of three months from the date of the act of bankruptcy and a petitioner cannot be permitted by substituting himself in place of the original petitioning, creditor to extend the time laid down in the statute". Even in making this observation Cave J. was at pains to point out that even if upon such an application fraud is alleged, the Court wou'. d strain its jurisdiction to the utmost. These observations were relied upon in a subsequent decision in -- 'in re Maundi Ex parte Maundi, (1895) 1 QB 193 (B ). In that case the petition was presented by a creditor alleging that the debtor was. indebted to him in a certain sum. Then it was discovered that it would be difficult to prove the minimum amount of the debt which was necessary ia order to entitle the creditor to maintain the-petition. An attempt was then made to bring other creditors on the record so that the amount of the debts should be increased. It was on these facts that the English Court of appeal held that the petition could not be allowed to be amended and other petitioning creditors to be brought on the record. What is to be borne in mind is that in this particular case the petition was not maintainable at its inception and what was sought to be done by the amendment was to convert a pstition which was not maintainable into a petition, which was maintainable. It is true that Vaughan Williams J. in his judgment relies on the observations of Cave J. in -- 'in re Maugham (A)', but on the facts the case is clearly distinguishable. Mr. Desai relies on the fact that leading commentators like Halsbury and Williams on Bankruptcy have cited with approval the Observations of Cave J. as representing the correct stato of the law In England. But in our opinion, with great respect, when one looks at the actual decisions it is difficult to take the view that they represent a decision on the point which we are considering. What is more, all the High Courts in India, which had to consider a similar question, iiave taken the view contrary to the view taken by the English Courts.