HRIDAYKRISHNA ADYA Vs. OSMANALI MANDAL

JUDGEMENT

(1.) This appeal raises a question under Section 53, Provincial Insolvency Act. The matter has arisen under the following circumstances. One Lehajuddin Jamadar was adjudicated an insolvent under the Provincial Insolvency Act, on 5 July 1927. Subsequently by an order made by the insolvency Court, a receiver was appointed to take charge of the properties belonging to the insolvent, The receiver was asked to investigate whether the insolvent had got any immovable properties. The attention of the receiver was drawn to the fact that the insolvent had conveyed certain immovable properties to one Osmanali Mandal on 26 May 1926, that is, on a data which was within two years of the date of adjudication of the insolvent as such. The receiver made an investigation and submitted a report to the insolvency Court. His report wag to the effect that the transfer in favour of Osmanali Mandal was not in good faith nor for valuable consideration. Ha accordingly prayed to the insolvency Court that the said transfer might be annulled under the provisions of Section 53, Provincial Insolvency Act. It appears that the receiver had taken the statements of various people who appeared before him. The matter, having come before the insolvency Court, under these-circumstances, the question arose whether that Court could take action under Section 53, go into the matter for itself and come to a determination on the point as to whether or not the transfer in favour of Osmanali Mandal was in good faith and for valuable consideration. On that point it was obvious that the insolvency Court had to take evidence; but it did not take evidence, but was content with the report of the receiver and the statements of the parties who had appeared before the receiver. No evidence in the legal sense of the term was taken by the insolvency Court. The Court came to the conclusion that an order under Section 53 of the Act being of a summary character it was not desirable in the circumstances to make such an order. But he referred the receiver to the civil Court for determination by means of a suit of the question or questions raised in his report. It is against this order of the insolvency Court, which is dated 14 June 1929, that the present appeal has been directed.

(2.) Our attention has been drawn to the circumstances under which the order in question came to be made and Section 53, Provincial Insolvency Act, has been contrasted with Section 55, Presidency Towns Insolvency Act. It is clear from the records before us that if the question had to be determined by the insolvency Court under the Provincial Insolvency Act, such investigation has not been done. On the other hand, it is equally clear that if according to the language of Section 53, Provincial Insolvency Act, it is open to the insolvency Court to decline jurisdiction and to refer the parties to a civil Court for determination of the matter in issue, then what has been done by the insolvency Court is one which it was competent to do and to which no exception can be taken. The question therefore is whether the insolvency Court, under the Provincial Insolvency Act, is the only Court which can determine the question raised in the section or whether any other Court has jurisdiction to go into the matter.

(3.) Mr. Panchanan Ghose, who has appeared for the transferee, contends that, according to the decisions in England based on a section which is more or less identical with Section 56, Presidency Towns Insolvency Act, the insolvency Court is not the only forum which has seisin of matters such as are referred to in Section 55, Presidency Towns Insolvency Act. That is no doubt true, as far as the decisions go at the present moment; but, there is a significant change in the terms of Section 53, Provincial Insolvency Act, and it has been held in several cases decided in India that under the Provincial Insolvency Act, the insolvency Court is the only Court which has jurisdiction in the matter to go into the questions raised under Section 53, Provincial Insolvency Act, and decide the same and that the parties should not be referred to the civil Court for determination of such questions: see! in this connexion the cases collected in Sir Dinshab Mulla's book on Insolvency at pp. 48, 49, 429 and 430. Therefore the view which has found favour in India, is that the insolvency Court under the terms of the Provincial Insolvency Act, is the only appropriate tribunal which can determine the question raised under Section 53 of the Act and we are in agreement with this view.