SITARAM SAWHNEY Vs. KUNDANLAL SAHNI

JUDGEMENT

(1.) THIS appeal is from the judgment and order of Banerjee, J. , in insolvency proceedings. The judgment is dated 21 June 1966. It will appear from the order that the parties appearing having consented to an order being made it was ordered that the debtors bharat Tea Co. and its partners Krishanlal sawhney, Sitaram Sawhney and Sri ram Sawhney shall pay to the applicant creditor a sum of Rs. 3,000/- on 25 June, 1966 and shall thereafter pay month by month beginning from the month of july 1966 within the last date of each succeeding month a sum of Rs. 3,000/-and shall go on making such payments until the debt is paid up and liquidated. It was further provided in the order that in default of paying the money within 25 June 1966 and in default of making two successive payments of rs. 3,000/- an adjudication order is deemed to have been made in respect of the estate of Bharat Tea Company, Krishanlal sawhney. Sitaram Sawhney and Sri Ram sawhney and in respect of partnership firm Bharat Tea Company, the said persons and the said firm, carrying on business at 17, Ezra Street, Calcutta and Sitaram sawhney and Sri Ram Sawhney at present residing at 67/7, Main Rothak road (also known as New Rohtak Road), new Delhi-5. The further order was that the Official Assignee shall continue to act as such Receiver until the debt is paid off and the Official Assignee as such receiver shall be entitled to his commission under Rule 13 of the Accounts Rule at one per cent on the valuation of the properties at Rs. 55,000/ -. It is also provided that if the debtors do not pay the commission to the Receiver the applicant creditor shall pay the same to him in the first instance and any sum so paid to the official Assignee be added to the amount of the debt and the same shall be repaid by the debtors by instalments. Finally it is provided that the Official Assignee as Receiver will hand over the property to the debtors after the debt is paid off and liquidated including the commission.

(2.) IN the first paragraph of the judgment of the it is said that by consent it was ordered that the debtors shall pay to the creditor a sum of Rs. 3,000/- within a week of the judgment and thereafter would pay month by month a sum of Rs. 3,000/- until the debt was paid off and liquidated. It is also stated in the judgment that if the debtors make default in payment of the instalments month by month, an order in terms of prayer (i) of the Notice of motion shall be deemed to have been made on the date of such default and in that event the debtors will be liable to the costs of this application. The official Assignee was also directed by the judgment to continue as interim receiver until the debt was paid off. The Official Assignee was also entitled under the judgment to commission and if the Official Assignee was not paid, the petitioner was at liberty to pay the same and add the amount so paid to his claim and the debtors would be liable for the entire amount. The appellants are Sitaram Sawhney and Sri Ram Sawhney.

(3.) COUNSEL on behalf of the appellants contended first, that the order is contrary to law inasmuch as it was made without proof of service of the petition upon the appellants as required under the Insolvency Act and Rules thereunder. The second contention was that the order was contrary to law inasmuch as the court did not require proof nor make any finding as to act of insolvency which is the very foundation of all adjudication order. Reference was made to sections 9, 10, 12, 13, 51 and 52 of the Presidency Towns Insolvency Act and Rules 74-80, 94 (1) and 94 (2) and Form no. 10 in support of the contention that the order violated the provisions of the act and Rules by not mentioning the act of insolvency. The third contention was that the entire order was bad because it is made by consent of parties and the court did not have any such power to make the order.