KESHAV APPA BHAGAT Vs. SITARAM HANUMANDAS

JUDGEMENT

(1.) THIS is an application in revision against an order passed by the Assistant Judge of Poona in Miscellaneous Appeal No. 39 of 1942 confirming the order passed by the First Class Subordinate Judge of Poona restoring to file insolvency petition No. 45 of 1938 which had been dismissed for default. The facts of this case are these:

(2.) SOME four creditors filed a petition in insolvency on May 25, 1938, in the Court of the First Class Subordinate Judge at Poona against the present applicant who is one of the owners of the shop going by the name of Bhujangrao Sadashiv Bhagat The petition remained pending for over three years, and on September 15, 1941. the pleaders for the petitioners stated by exhibits 103 and 104 that they had no directions to continue the proceedings. But on the very next day, i. e. on September 16, 1941, two other creditors shops, viz. Laxminarayan Sitaram Shop and Rambhagat Paichandas Shop applied under Section 16 of the Provincial Insolvency Act to be substituted in the place of the petitioning creditors on the ground that the original petitioners were not prosecuting the petition with due diligence. The application was opposed on the ground that it had not been properly verified and presented. The Court dismissed the application for substitution but directed the two creditors to present a new application within a week. This order was passed on September 17, 1941, and on the next day one of the two creditors asking for substitution, i. e. the shop of Rambhagat Paichandas filed a proper application for substitution. The application was granted on February 22, 1942, and the name of the shop of Rambhagat Paichandas was brought on record as the 'petitioning creditor. Then the petition continued until June 26, 1942. On that day persons representing the shop of Rambhagat Paichandas remained absent. Their pleaders also remained absent and accordingly on that very day the learned Judge proceeded to pass an order dismissing for default the petition in insolvency. The receiver who had sold certain properties and collected money was also directed to return the property to the original opponent, i. e. the present applicant. But on the very next day the shop of Laxminarayan Sitaram presented an application purporting to be an application Under Section 16 of the Provincial Insolvency Act requesting the Court to restore the insolvency petition to file and to substitute its name as the petitioning creditor. It was alleged that the shop of Rambhagat Paichandas had not prosecuted the petition with due diligence and had remained absent on the day of the hearing, and that as a result of this other creditors had suffered irreparable damage. This application was opposed by the opponent on the ground that as the original petition had already been dismissed for default there was no petition pending and that, therefore, the shop of Laxminarayan, Sitaram could not ask for its name being substituted as a petitioning creditor Under Section 16 of the Provincial Insolvency Act. It was further contended that the original petitioning creditor whose name had been brought on record by way of substitution, viz. Rambhagat Paichandas, had no) made any application for restoring the petition to file and that there was not any sufficient cause alleged for restoring to file the original petition. The learned trial Judge, however, thought that the application that was made was not only for substitution under Section 16 of the Provincial Insolvency Act but also for restoring the original petition to file. He considered that the other creditors had not been given any opportunity to proceed with the application before it was dismissed. Under these circumstances he thought it fit to set aside the order dismissing the insolvency petition and he, therefore, directed that the petition be restored to file.

(3.) IT has to be noticed, however, that in that case it was several months after the original petition was dismissed that an application was made under Section 16 of the Provincial Insolvency Act. Moreover, that application was made only under that section and did not ask for the original petition being revived. Further, in that case the original order dismissing the petition was passed after an intimation had been given to the Court of a certain agreement which had been arrived at between the petitioning creditor and the debtor. IT was not passed for default in the appearance of the petitioning creditor.