JWALA SINGH Vs. LABOO RAM

JUDGEMENT

(1.) Respondent Laboo Ram, on his own application, was adjudged insolvent on the 29th August, 1961, and he was directed to apply for discharge within four years. In the meantime, he was directed to pay Rs. 10 per month, and, from the 29th June, 1965, the amount was increased to Rs. 40 per month to be paid to the appellants, who were the two unsecured creditors of the insolvent. On the 15th September, 1965 a little over four years after, the insolvent applied for absolute discharge. The appellants objected to that application and requested to court to extend the time for absolute discharge by three or four years so that the realisation towards their debts may come to at least eight annas in a rupee. The objection was overruled by the Subordinate Judge, and an order was passed for absolute discharge of the insolvent. This order was affirmed by the Additional District Judge in appeal filed by the creditors. Being thus aggrieved, the creditors have filed this appeal.

(2.) A preliminary point was taken by Mr. Deba Prasad Mukherjee, appearing for the respondent, that the appeal was not maintainable, and, in support of this contention, he relied on Sub-section (3) of Section 75 of the Provincial Insolvency Act (hereinafter referred to as "the Act"), Sub-section (1) of Section 75 makes provision for an appeal to the High Court on grounds mentioned in Sub-section (1) of Section 100 of the Code of Civil Procedure in a case where an order has been passed by a Court subordinate to the District Court and that order has been affirmed or set aside on appeal by the District Court. Under Section 75(1) of the Act, the debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction has a right to prefer an appeal. Sub-section (3) of Section 75 lays down that any such person aggrieved by any other order made by a District Court otherwise than in appeal from an order made by a subordinate court may appeal to the High Court by leave of the District Court or of the High Court. I am surprised how the learned counsel has referred to this sub-section for an argument of the present appeal being not maintainable where the present appeal has been filed against an order of the District Court affirming in appeal a decision of a subordinate COURT. Learned counsel has also relied on a Full Bench decision of this Court in Gopal Ram v. Magni Ram, ILR 7 Pat 375= (AIR 1928 Pat 338) (FB). That was a case where the impugned order was passed by the District Court otherwise than in an appeal. Consequently, Sub-section (3) of Section 75 was applicable to such a case. But, as already observed, it cannot apply to a case where the appeal was filed to the High Court, as in the present case, from a decision of the District Court affirming in appeal the decision of the subordinate Court. The preliminary objection is, accordingly, overruled,

(3.) Mr. Ghosh, appearing for the appellants, has advanced an argument that the order of the learned Additional District Judge in appeal affirming the decision of the Subordinate Judge making an order for absolute discharge of the insolvent is bad in law as it has violated the provisions of Section 42 of the Act. He has based his argument on clause (a) of Sub-section (1) of Section 42, which reads that 42(1) the court shall refuse to grant an absolute order of discharge under Section 41 on proof of any of the following facts, namely :-- (a) that the insolvent's assets are not of a value equal to eight annas in the rupee on the amount of his unsecured liabilities, unless he satisfies the court that the fact that the assets are not of a value equal to eight annas in the rupee on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible." In the present case, it is an admitted fact that on the date of the application for discharge the assets of the insolvent were only Rs. 490, whereas the unsecured liability of the insolvent in respect of the appellants amounted to Rs. 2,360/-. It is thus conceded even by the learned counsel for the insolvent-respondent that the assets of the insolvent on the date of the application for discharge were less than eight annas in the rupee of the unsecured liability. Counsel for the insolvent has, however, urged that the order of discharge cannot be interfered with, unless the Court finds that the fact that the assets of the insolvent are not of a value equal to eight annas in the rupee on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible. In my judgment, this argument is based on confusion. True it is that in his application for discharge the insolvent had practically quoted the wordings of the; section: