MANGI LAL Vs. MOTI LAL

JUDGEMENT

(1.) THIS is an appeal under sec. 75 (2) of the Provincial Insolvency Act against the order of the learned District Judge of Merta, dated 28th February, 1955, by which he rejected the application of the insolvents Mangilal and Premraj for discharge and by the same order annulled the order of adjudication of the debtors as insolvents which was made earlier by order of 17th March, 1952.

(2.) THE appellants Mangilal and his son Premraj applied to the court on 15th June, 1946, for being adjudged as insolvents. THEy were declared insolvents on 17th March, 1952, and were directed to apply for discharge within six months. This they did by application on 21st July, 1952. THE application was contested by the creditors Hazarimal and Jeewanlal. THE learned District Judge rejected the application for absolute discharge and annulled the order of adjudication on the following grounds - (1) Mst. Man Kanwar, mother of Mangilal obtained a decree against the debtors which was set aside by the High Court as being collusive vide its judgment, dated 19th July, 1954, in Ijlas-i-khas Appeal No. 5 of 1951 Ex. B. THE learned District Judge said that the High Court had held in that judgment, "that Mst. Man Kanwar in collusion with Shri Mangilal had obtained the decree more with a view to defeat Shri Hazarimal's claim than to realise anything herself from her son. " THE learned District Judge held that this observation satisfactorily proved that the insolvents had been guilty of fraud. (2) THE insolvents continued to trade with Umrao & Co. ; Ganganagar after they knew that they were insolvents. (3) THE insolvents' assets were insufficient to pay eight annas in a rupee to the creditors and they have not proved at all that this was due to circumstances for which they could not be held justly responsible. (4) THE evidence of witnesses Shri Hanuman D. W. 1, Shri Parasram D. W. 2 and Shrichand D. W. 3 proved satisfactorily that the insolvents have got sufficient ornaments of gold and silver with them and they were spending Rs. 400/- or Rs. 500/- per month and living a good life and doing business in the market and spending sufficient amount at the time of marriages. He held in the subsequent para of his order that the entire assets after realisation amounted to Rs. 15,337/- and the proved claims of the creditors were - 1. Shri Hazari Mal . . . . . . Rs. 92,168. 9. 0 2. Shri Jeewanmal Rs. 45,784. 9. 3 . . . . . .

(3.) LEARNED counsel for the respondent urged that the learned District Judge, no doubt, annulled the adjudication but he had also rejected the application for discharge and the present appeal not only challenges the annulment, but also the refusal of the application for discharge. It was contended that in an appeal where the debtor wishes to challenge the refusal to discharge, the receiver is a necessary party. The last contention is correct so far as it goes. If the order had only been the refusal to discharge, the receiver would have continued to hold the property and would have continued to represent the estate of the insolvents. But in the circumstances of the present case when he was divested of the property of the insolvents, he was not a necessary party to this appeal. Further, in view of the report of the receiver, no other property of the insolvents existed, which was required to be administered by the receiver. He has not opposed the grant of discharge. In the circumstances, the hearing of this appeal will not be affected by the omission of the receiver to be made a party respondent.