SHEIKH SAMIR-UD-DIN Vs. KADAR MOYEE DASSI

JUDGEMENT

(1.) We are invited in this appeal, which has been preferred under Section 46, Sub-section (2) of the Provincial Insolvency Act, 1907, to set aside an order dismissing a petition for insolvency under Sub-section (1) of Section 15. The appellant Shaik Samir-ud-din presented a petition upon the allegation that his debts amounted to more than Rs. 500 which he professed his inability to pay and prayed that he might be adjudged an insolvent under the provisions of the Act. Two creditors were named in the petition, one of whom alone appeared to contest the application. The petitioner was examined, and as soon as he deposed that he had transferred a portion of his property in lieu of dower, the learned District Judge held that he had committed an act of bad faith which disentitled him to the protection of the Act. In this view, he dismissed the application. The petitioner has now appealed to this Court.

(2.) A preliminary objection has been taken to the hearing of the appeal on the ground that the second creditor mentioned in the petition has not been served with notice of this appeal. The learned Vakil for the respondent has contended that the order of dismissal of the petition under Section 15 of the Act operates as a decree between the petitioner on the one hand and each of the creditors on the other, no matter whether they opposed the application or did not at all appear in the proceedings. He has argued that the effect of the reversal of the order will be to leave the second creditor, who is not a party to the appeal, unaffected by the order of this Court, so that it would after remand be open to such creditors to contend that the, petitioner ought not to be adjudged an insolvent. Tn this view, he has contended that the second creditor ought to be added as a party respondent to the appeal. Tn our opinion, there is no force in this contention. Section 11, Sub-section (1), Clause (d),provides that in every insolvency petition presented by a debtor, the names and residence of his creditors, so far as they are known and can by the exercise of reasonable care and diligence be ascertained by him, must be mentioned. Section 12, Sub-section (2), provides that notice of the order under Sub-section (1), fixing a date for the hearing of the petition, shall be given to the creditors by publication in the local official Gazette and in such other manner as may be prescribed. Section 14, Sub-section (2), provides for the examination of the debtor as to his conduct and dealings with his property, in the presence of such creditors as appear at the time, and the creditors have the right to question the debtor thereon. Sub-section (3) of the same section entitles the Court, if sufficient cause is shown, to grant time to a creditor to produce any evidence which appears to the Court to be necessary for the proper disposal of the petition. Section 15 provides for the dismissal of the petition under certain circumstances, while Section 16 provides for an order of adjudication under other circumstances. It is obvious that, neither the order of dismissal of the petition nor the order of adjudication can be treated as a decree between the parties in a contested or uncontested suit. In fact, the order of the Court is made appealable, not as a decree but as an order under the provisions of Section 46 of the Act. If a creditor upon notice does not appear to contest the proceedings, it may fairly be assumed that he has no objection to an order of adjudication. If, in spite of his absence, the petition is dismissed under Section 15, and if an appeal is preferred against such order of dismissal, it is manifest that he is not interested in the result of the appeal. If the appeal fails, he is obviously not affected thereby. If the appeal succeeds and an order of adjudication is made, the event expected by him happens, because he did not oppose the application in the original Court. Under these circumstances, we are of opinion that it was not necessary for the appellant to add, as a party respondent to the present appeal, the second creditor mentioned in the petition who did not appear in the Court below to oppose the application. It was pointed out, however, to the learned Vakil for the respondent that an order might be made even at this stage for the addition of the second creditor as a party respondent under Order XLI, Rule 20, of the Civil Procedure Code of 1908, which is applicable to the present appeal by reason of the provisions of Section 47, Sub-section (2), of the Provincial Insolvency Act; and it was suggested to him that the second creditor might be added as a party, if he would, undertake to pay his costs; because when added as a party respondent, he might appear and contend that he had been unnecessarily brought before this Court inasmuch as he had never opposed the application. The learned Vakil for the respondent, however, declined to take the risk. We must consequently overrule the preliminary objection and proceed to consider the appeal as properly constituted.

(3.) In support of the appeal, the learned Vakil for the applicant has contended that the order of the District Judge is erroneous inasmuch as it contravenes the provisions of Sub-section (1) of Section 15 of the Provincial Insolvency Act. The argument in substance has been that at the preliminary stares contemplated by Section 15 it wa3, not open to the District Judge to dismiss the petition on the ground that the petitioner had improperly alienated a portion of his property in lieu of dower. In our opinion, this contention is well founded and is supported by the decision of this Court in the case of Udai Chand Maity V/s. Ram Kumar Khara 7 Ind. Cas. 394 and of the Allahabad High Court in Girwardhari V/s. Jai Narain 7 Ind. Cas. 39 : 7 A.L.J. 835.