HARADAGERI BASAVANA GOWD Vs. OFFICIAL ASSIGNEE BOMBAY

JUDGEMENT

(1.) This is an appeal under section 75 of the Provincial Insolvency Act against the order of the District Judge, Bellary, in I.A. No. 171 of 1951, which was filed in I.P. No. 2 of 1950. I.P. No. 2 of 1950 was a creditor's petition to adjudge the firm of T.A. Deshi, Bombay, insolvent. It was presented to the District Court, Bellary, on 25th of January, 1950 and there was an order of adjudication on 13th December, 1950. Pending the adjudication the Official Receiver was appointed interim receiver at the instance of the petitioning creditors, for taking over possession of certain goods alleged to belong to the insolvents and which were then in transit to Bombay. T'he receiver took possession of those goods and subsequently under orders of that Court disposed of them and deposited in Court the money so realised. The present appellants filed applications before the learned District Judge claiming to be entitled to a portion of the money in deposit on the ground that the railway receipt relating to the goods in question had been made over to them by the insolvents for consideration. They also asked that as an interim measure the proceeds to which they laid claim might be paid over to them because they had borrowed money from a bank on the security of the railway receipt and that when the goods were taken over by the receiver, the bank demanded immediate payment and they had therefore to borrow elsewhere on less favourable terms in order to avoid injury to their commercial credit. The learned District Judge saw no reason why an interim payment should not be directed on terms especially in view of the fact that the money if kept in Court, would be idle. He ordered the appellants before taking the money to give security and an undertaking to re-deposit the sum into Court with interest at 6 per cent, per annum. The appellants thus withdrew the money from the Court on 6th April, 1950. On I4th April, 1950, I.P. No. 52 of 1950 was presented on the Original Side of the Bombay High Court against the same firm by certain other creditors and there was an order of adjudication made by that High Court on 17th April, 1950. The Official Assignee of Bombay in whom all the properties of the insolvents vested by that order applied to the District Court, Bellary, in I.A. No. 183 of 1950 for stay of all proceedings in that Court and for the transfer of all the assets and books of account belonging to the estate of the insolvents to the jurisdiction of the Bombay High Court. On the same day on which it made the order of adjudication, i.e., on 13th December, 1950, the District Court, Bellary, passed orders on I.A. No. 183 of 1950. Therein, it directed the Official Receiver of Bellary to move the High Court of Bombay to annul the adjudication made by it. It also observed in the course of its order, that

(2.) The present appellants were also parties to I.A. No. 183 of 1950. No appeal was filed as against that order. Apparently, no application was made by the Official Receiver, Bellary, for a long time despite the aforesaid direction with the result that the Official Assignee of Bombay filed another application (I.A. No. 171 of 1951) in the District Court, Bellary and it is out of this that the present appeal arises. By this application, purporting to be filed under sections 4, 5 and 36 of the Provincial Insolvency Act, the Official Assignee of Bombay prays

(3.) On the present application, the lower Court took the view that