BALIRAM RAMJI WADHI Vs. LAXMAN SITARAM

JUDGEMENT

(1.) THIS is an application for revision by two persons who were adjudged insolvents on 18th September 1934 against the order of the lower Appellate Court declining to sanction a scheme of composition which they proposed. There are certain secured creditors, namely Nos. 3 and 4, and the rest of them unsecured creditors. The debts due to the secured creditors amounted to Rupees 3500. The secured creditors applied to the insolvency Court for the valuation of their security and for permission to be scheduled for the balance. This was allowed. They applied to the Court to realise their security by sale of certain houses which are subject to a mortgage in their favour. It appears from the insolvency record that when under Section 47(4) the secured creditors applied for having their security valued and the amount due to them realised by sale of their mortgaged property and asked for being scheduled for the balance the insolvents objected to an order for sale of their property. The insolvency Court did not accept this and ordered under Section 47(4) that the property be sold with a view to paying off the secured creditors and applying the balance towards the debts of the unsecured creditors. This formed the subject-matter of an appeal before the District Judge and on 13th September 1937 in Misc. Civil Appeal No. 21 of 1937 the District Judge held that the houses might be sold.

(2.) THERE was an appeal before this Court, Misc. No. 1 of 1938, against this decision, and this Court dismissed the appeal holding that the order for sale that has been passed by the insolvency Court was proper. This was decided on 19th March 1938. Thereafter the insolvents again applied to the Court on 2nd November 1938 and 7th March 1939 proposing a fresh scheme of composition and asking the Court not to proceed with the sale of the property but to accept the scheme as propounded in those applications. The insolvency Court after hearing both sides in consexion with that scheme and finding that neither the secured creditors nor the unsecured ones were agreeable to the scheme passed an order on 17th March 1939 declining to accept the scheme. The scheme suggested by the insolvents was on the very face of it such as no creditor could accept. The insolvents proposed to make a monthly payment of Rs. 80 and wanted that to be distributed between the secured creditors and the unsecured creditors in certain proportion and wanted the sale to be indefinitely postponed and the debts due to be liquidated in this manner. Past experience about these insolvents had shown the Court that they did not deposit the amount that they were asked to deposit. The Court therefore thought the deposit that they proposed to make being mainly at their sweet will no faith could be placed in such a deposit and the scheme would not properly work. Against this decision of the Court an appeal was filed before the District Judge and the District Judge held that the insolvency Court was right in coming to the conclusion to which it did and dismissed the appeal.

(3.) WHILE admitting this application for revision on the motion hearing I thought that the secured creditors might, in the circumstances of the case, be persuaded to agree to accept the scheme and therefore notices were issued to all the creditors. At the hearing all creditors, secured as well as unsecured, declined to accept the composition scheme as proposed. The secured creditors also referred me to the previous orders passed in the year 1937 and concluded by the order of this Court on 19th March 1938 and stated that inasmuch as it has already been held that the property should be sold and secured debt should be paid off it is not competent for the insolvents to come up again to this Court and ask for a change of that order. As no creditor is agreeable to the scheme proposed and as the orders of the Court are not such as can be said to be in any way against law, I cannot see my way to interfere in revision in favour of these insolvents. The application for revision fails and is dismissed with costs. Counsel's fee Rs. 10.