PRAMOD M JHAVERI Vs. SUKHDEO RAMRATAN

JUDGEMENT

(1.) In this creditors' petition for an order of adjudication, an interesting but neat question of law arises for determination. The question is whether the Insolvency Court has jurisdiction to adjudicate upon claims based on the provisions of the Maharashtra Debt Relief Act, 1976 (hereinafter referred to as "the Act"), or whether such claims must be determined by the authorised officer constituted thereunder. In a large number of cases, whether they are petitions for orders of adjudication or notice of motion for setting aside insolvency notices, this threshold question arises. It was therefore, considered necessary that in the above-mentioned petition, this question be tried as a preliminary question. Having regard to the pendency of the various other matters, in which this question arises, counsel for the parties thereto, were permitted to address the Court on this question, Consequently, besides the learned counsel for the petitioning creditors and the debtors herein, counsel appearing in the other matters also addressed the Court. On behalf of the creditors, principal submissions were made by Shri Makhija, the learned counsel for the peti-tioning-creditors herein. He was supported by Shri Thakkar, Shri Chande and other counsel appearing on behalf of the various creditors in the other proceedings. On behalf of the debtors, main arguments were advanced by Shri S.V. Shah. He was supported by Shri C.K. Shah, Shri Vyas, Shri Hinduja and Shri Jaysinghani. Shri D. R. Zaiwala appeared amicus cu-riae. The arguments advanced at the bar have been grouped together and have been, for the sake of convenience, compendiously referred to as arguments of counsel for the debtors or those for the creditors.

(2.) The above-mentioned insolvency petition was filed on 18th January, 1974, by Messrs. Punjalal H. Shah, in respect of a debt of Rs. 1,447.31 p. being the balance on a decree on admission, obtained by the said petitioning-creditors in a Suit filed in the Court of the Small Causes, Bombay. The said petitioning-creditors were substituted from time to time. Ultimately, the present petitioning-creditors Sukhdeo Ramratan and another, came on the scene "in respect of their claim of Rs. 5,226.17 ps., payable under an ex parte decree passed in their favour by the Bombay City Civil Court in Suit No. 1637 of 1972.

(3.) The petition is founded on the facts that an insolvency notice dated 16th October, 1973, was served on the debtors on 18th October, 1973, but the debtors did not adopt any proceedings to have the said insolvency notice set aside. Nor did the debtors comply with the said insolvency notice with the result that the act of insolvency was complete on 23rd November, 1973.