ARUNAGIRI MUDALIAR Vs. KANDASWAMI MUDALIAR

JUDGEMENT

(1.) This is an appeal arising from an insolvency proceeding, before the District Judge of North Arcot. The first respondent before us had applied, to be adjudicated an insolvent, to that Court in October 1919. The appellant before us was one of his creditors, who had a simple mortgage over a good portion of the insolvent's properties for a part of his debts. He was partly a secured and partly an unsecured creditor of the insolvent.

(2.) The petition was referred, by the District Judge, to the Official Receiver for disposal, and the Official Receiver acting under his powers under section 80 (a) of the Act, heard the petition and passed an order of adjudication in August 1920. In that order, he gave the insolvent time for five months to file his application for discharge under Section 27 (1) of the Provincial Insolvency Act. It was suggested in this case that the Official Recever had no power to fix the time within which the debtor should apply for his discharge as Section 27 (1) applied only to the Court. That argument does not seem to be valid, as the period has to be specified in the order of adjudication itself, which the Official Receiver has power to pass and he has, therefore, to be taken to have the power also to fix the period for applying for discharge, as it should be a part of the order of adjudication, under Section 27. The insolvent took no steps to apply for his discharge, or to help the Receiver, to get his assets realised, or his debts examined and paid pro rata from his assets. Some months thereafter, in July 1921, the creditor (the appellant before us) applied to the Court, under Section 43 of the Insolvency Act, to have the order of adjudication annulled, on the ground that the debtor had not applied for an order of discharge, within the period specified. As soon as this was done, the insolvent put in a petition to the Official Receiver for extending time for applying for his discharge and the Official Receiver granted time till 9 February 1922. It is said that the application for his discharge was put in, by the respondent before that date. However that may be, the creditor appealed to the District Court contending that the Receiver had no power to extend the period, within which the debtor was to apply for his discharge and that the order of adjudication should be annulled and the insolvency petition dismissed. The learned Judge, instead of complying with this request himself, granted an extension for a period of six months for the debtor to apply for his discharge, acting under Section 27 (2) of the Act and dismissed the appellant's application. It is against that order that the appellant has appealed to us and leave was granted for the appeal.

(3.) A preliminary objection has been raised to the hearing of the appeal, on the, ground that the appeal is not a competent one under the Insolvency Act. It is contended that under Section 75, the creditor cannot be treated as a person aggrieved by the order of the District Judge and the argument is put in two ways First of all, it is said that the creditor being a secured creditor is unaffected by any proceeding in insolvency and therefore, he is not aggrieved. It is not necessary to consider this argument; for the appellant is also an unsecured creditor and an unsecured creditor is certainly affected by proceedings in insolvency taken by his debtor. The order of adjudication prevents him from realising his debt except by receiving a dividend under the Act. An unsecured creditor would, undoubtedly, be a person aggrieved by the refusal to annul the order of adjudication. Next, it is argued that a creditor has no right to apply under Section 43 and, therefore, any order passed under that section cannot be treated, as, in any way, causing, a grievance to a creditor. Section. 43 (1) does not say by whom the application has to be made. But it is clear to my mind that a creditor who is affected by the adjudication is certainly a person, entitled to apply to the Court, under Section 43, and if his claim is dismissed without proper reason for it, he will certainly be a person aggrieved under Section 75, adopting the definition of the expression person aggrieved, given in Ex parte Sidebotham, In Re: Sidebotham (1880) I.Ch.D. 458 : 49 L.J. Bk. 41 : 42 L.T. 783 : 28 W.R. 715 that is: "A person who has suffered a legal grievance, or has been wrongfully refused something." A person in the position of the appellant, who says that he has been wrongfully refused the order of annulment, which he was entitled to, is thus a person aggrieved. Both the arguments failing, the preliminary objection must be overruled.