GOVIND HANUMAN PRASAD (FIRM) Vs. SHAMSINGH

JUDGEMENT

(1.) THIS appeal arises out of a proceeding started on a petition of a creditor Firm Govindram Hanumanprasad of Ujjain for securing adjudication of the debtors, Hemant Kumardas and Chittranjan Rai as insolvents.

(2.) THE creditor firm was alleged to be entitled to a debt of Rs. 20,453. Certain acts of insolvency were attributed to the insolvents. After the filing of the application for the adjudication of insolvents the creditor moved under section 21 of the Insolvency Act for the attachment of the properties of the insolvents. Amongst the list of property sought to be attached there were National. Savings Certificates of the denomination of ks. 6,000. The insolvency Court by its order dated 31 -1 -1959 directed attachment of these certificates alleged to be standing in the name of the insolvents by issuing an order to the Superintendent Post Office Ujjain, Malwa Division, informing him that the same had been attached in the insolvency proceedings and directing him not to permit encashment of the same until otherwise ordered. While making the initial order no specification as to number etc., were supplied by the creditor. On a further direction by the Court the creditor gave what according to the best of his knowledge were the numbers. These numbers were No. G -0 -237673 dated 16 -4 -1958 of the denomination of Rs. 5,000 and No. G -2 -129525 dated 16 -4 -1958 of the denomination of Rs 1,000. The certificates stood in the name of Shri H.K. Das who is one of the debtors. On receipt of the above information from the Insolvency Court the Superintendent of Posts by his letter dated 2 -5 -1959 brought to the notice of the Court that the aforesaid certificates had been cancelled and the National Plan Savings Certificates of 12 years had been issued in lieu of the same. The letter also gave the details as to valuation and number of the converted certificates and enquired as to whether the attachment order should be taken to operate on these converted certificates. This letter was followed by subsequent remainders dated 25 -5 -1959, 23 -6 -1959 and 10 -12 -1959. While these letters were being exchanged respondent Shamsingh submitted an application to the Insolvency Court on 6 -5 -1959 alleging that the debtor firm H. K. Das and Co., through its partner Chittaranjan Rai had barrowed Rs.3,100 on 1 -2 -1958 and issued a post dated cheque on the State Bank of India dated 26 -2 -1958 that on the due date the debtors informed him that they had not succeeded in securing necessary balance in their bank account and asked for more time which had been given; that on 15 -4 -1958 the said debtors took further loan of Rs. 3,300 from him and gave another post dated cheque of the same denomination due on 30 -5 -1958; that later the debtors again expressed their inability to secure encashment of the cheques and asked for further time; that ultimately on 28 -10 -1958 the debtors handed over to them the 12 years National Plan Savings Certificates four in number each of Rs.1,000; that when he sought encashment on due date i.e., on 16 -4 -1959 he was informed that the same had been attached. The objector Shamsingh on these allegations contended that the four certificates of Rs. 1,000 each while had been made over to him had become his property on 28 -10 -1958 and that for that reason they were not liable to attachment. The creditor resisted this objection petition contending that in the absence of observance of necessary formalities and requirements of law mere handing over of the said certificates could not clothe the holder with rights in respect of the same. The details of the circumstances in which the objector obtained the converted certificates were also denied for want of knowledge.

(3.) THE creditor firm preferred the present appeal under section 75 (2) of the Provincial Insolvency Act. An application has also been given for permission to appeal in case the order in question is not treated as one under section 4 of the Provincial Insolvency Act.