VRIJLAL MANSUKHRAM Vs. CHUNILAL FATECHAND

JUDGEMENT

(1.) In this case the respondents, the firm of Messrs. Chunilal Fatechand, were the creditors of the insolvent and had notified and also proved their claim before the dividend was declared by the receiver, whereas the appellants, Vrijlal Mansukhram and others, who were the creditors of the insolvent, proved them only after the declaration of the dividend.

(2.) The learned Subordinate Judge held that as it was the only dividend and probably the final dividend, the appellants were entitled to individual notices Under Section 64, Provl. Insol. Act 5 of 1920, and therefore, as they did not receive the notices they were entitled to reopen the distribution of the dividend already declared and distributed. The view of the learned Subordinate Judge was confirmed by the District Judge in appeal. On second appeal, Madgavkar, J., came to the contrary conclusion, and held that the mare fact that the first dividend proved to be the final dividend did not entitle the negligent creditors to compel the vigilant creditors to refund the amount which they had already obtained from the receiver on the assumption that it was not the final but only the first dividend.

(3.) In this appeal it is urged on behalf of the appellants that Under Section 64, Provl. Insol. Act, it is incumbent oh the receiver to give individual notices to the creditors before the declaration of the final dividend by registered post according to form No. 11 at p. 359 of the Civil Circulars, and Rule 24, Clause (6), at p. 351 of the Civil Circulars and, that the individual notices not having been given, the first dividend, which was, the final dividend, ought to be re opened, and reliance is placed on the decision of the Madras High Court in Venkatanarayana Chetty V/s. Sevugan Chetty A.I.R. 1924 Mad. 769.