PUNJAB NATIONAL BANK Vs. JETHMAL DANMAL

JUDGEMENT

(1.) THIS is an appeal by the Punjab National Bank Ltd. and three other banks (hereinafter called the Banks) against the order of the District Judge of Jodhpur in an insolvency matter. (2) The brief facts leading to this appeal may be mentioned at the outset. An application was made by Messrs. Jethmal Danmal and another (hereinafter called the respondents) for declaring Messrs. Sherchand Multanmal and its partners insolvent (hereinafter called the insolvent) under Section 9 of the insolvency Act. The District Judge adjudicated Messrs. Sherchand Multanmal and its partners insolvent on 21st of July, 1954. A receiver was appointed to take possession of the property of the insolvents. One of the acts of insolvency mentioned in the petition was that the insolvents had given fraudulent preference to the Banks. After the order, of adjudication, the Banks made an application to the District Judge pointing out that no notice, as required under Section 19 (2) of the Insolvency Act was issued by the Court and therefore the Banks could not appear and contest the petition and show to the Court that this was not a case of fraudulent preference to the Banks.

(2.) THIS application was opposed by the respondents and their case was that no notice under Section 19 (2) was necessary at all in a case where the application for insolvency was made by a creditor. The District Judge accepted this contention of the respondents and held that no notice under Section 19 (2) was necessary when the application was by a creditor. It therefore dismissed the application of the banks holding that its order of adjudication dated 31st of July, 1954 was in the circumstances perfectly legal. The present appeal is against this order of the district Judge.

(3.) A preliminary objection has been raised on behalf of the respondents that the appellants have no right to appeal against the order of the District Judge. Section 75 of the Insolvency Act deals with appeals and Sub-section (2) and (3) provide for appeals against orders of District Judges in the exercise of insolvency jurisdiction. The present appeal is not covered by Sub-section (2 ). The appellants, however, have made an application for leave to appeal under Sub-section (3) and in view of the circumstances, we are of opinion that leave should be granted in this case and we hereby grant it. The contention of the respondents is that the appellants cannot appeal at all because they are not creditors. It is enough to point out that the right of appeal under Section 75 of the insolvency Act is given not only to creditors (assuming for the moment that the appellants are not creditors) but also to any person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction. We have no doubt that the appellants are persons aggrieved by the order of adjudication. The result of the order of adjudication is that the creditors would be able to make an application under Section 53 or 54 of the Insolvency Act and this would very prejudicially affect the rights of the appellants who are said to be creditors to whom fraudulent preference was given. They are therefore persons aggrieved by the order of the District Judge adjudicating Messrs. Sherchand Multanmal and its partners insolvent. There is therefore no force in this preliminary objection and it is hereby overruled.