SANKARI DEBI Vs. CO-OPERATIVE URBAN BANK

JUDGEMENT

(1.) This appeal is directed against a judgment of the District Judge of Pabna passed on 26th November 1940, in a proceeding under Section 4, Provincial Insolvency Act. The material facts lie within a short compass and may be stated as follows : One Annada Gobinda Chakravarty a medical practitioner at Serajganj in the district of Pabna was adjudicated an insolvent on his own application by the District Judge of Pabna on 7 January 1939; and respondent 6 was appointed a receiver on the same day. On 6 October 1939, the Co-operative Urban Bank of Serajganj, who is respondent 1 in this appeal, and was the principal creditor of the insolvent, filed an application before the receiver, stating inter alia that a house property within the Serajganj Municipality was owned and possessed by the insolvent, though the deed of purchase stood in the name of his first wife Labanya Probba Debi. The receiver was asked to take steps with regard to that property under Section 4, Provincial Insolvency Act. The receiver after making enquiries submitted a report on 16 February 1940, in which he said, that on the evidence adduced on both sides he was satisfied that the property really belonged to the predeceased wife of the insolvent and not to the insolvent himself; and he declined to start proceedings under Section 4, Provincial Insolvency Act. The matter then came up before the Insolvency Court, and it appears from the order sheet, that on 6 March 1940, the District Judge made an order directing that a case might be started under Section 4, Provincial Insolvency Act, and notices served on all interested parties. The present appellants who are the three daughters of the insolvent by his first wife and succeeded to the property of their mother after her death appeared as opposite parties in the proceeding, while the respondent bank figured as the petitioner. The insolvency Court on taking evidence came to the conclusion, that the property in dispute really belonged to the insolvent and not to his wife. It is against this decision that the present appeal has been preferred.

(2.) Mr. Krishna K. Maitra, who appears on behalf of the appellant, has contended at the outset, that the proceedings before the Court below were wholly without jurisdiction, inasmuch as it was not the receiver but a creditor of the insolvent who made the application under Section 4, Provincial Insolvency Act. It is argued that the only person competent to start a proceeding under Section 4, Provincial Insolvency Act is the receiver, and as the receiver declined to take any action in the present case, the Court has no jurisdiction to decide the question of title at the instance of a creditor.

(3.) This point, it seems, was raised specifically in the written objection of the appellant, though the learned Judge has not dealt with it in his judgment. The Provincial Insolvency Act of 1907 had no provision corresponding to Section 4 of the present Act, and there was a conflict of authorities as to whether the Insolvency Court had any power to decide questions of title between the receiver and a stranger to the insolvency, or whether such questions could only be decided by a suit filed in the ordinary tribunal. To avoid this conflict, Section 4 was introduced in the Act of 1920, and the insolvency Court has now adequate powers under this section to decide all questions of title or priority, both on facts as well as on law, and such decision is final and conclusive between the debtor or debtor's estate on the one hand and the claimant against him on the other. The section itself does not lay down as to who is to initiate a proceeding under it; all that it says is that the Court will exercise its powers subject to the provisions of the Act.