PANMALL JESRAJ Vs. MRJMACLEOD

JUDGEMENT

(1.) The question involved in this appeal has been already before this Court on two different occasions and it arises out of a proceeding in insolvency. The insolvent is one Maganmal who used to do business in the name of a firm styled Mohan Lal Maganmal. Another firm called Panna Chand Jetmall, which is alleged to have been owned by Daimull and Panmull, used to do business as commission agents for Maganmal. This firm existed down to 1930 when it was wound up. In 1928 Daimull is said to have retired and Panmull, who is the creditor No. 14 in the insolvency proceeding and now the appellant before us, started business under the name of Panmull Jesraj. This firm took up business as commission agents for Maganmal in succession to the other firm of Panna Chand Jetmull. Maganmal used to take out insurance policy for about Rs. 50,000 and by arrangement the creditor firm used to keep the policy and pay the premium: On 31 August 1931 the shop of Maganmull at. Chittagong was looted.

(2.) He made a claim on the Insurance Company who gave him a cheque for Rs. 49,638-10-0 and the latter endorsed it over to creditor No. 14. The latter got it caused on 2nd December 1931. On 7 January 1932 the debtor filed his petition for insolvency and therein he mentioned Panmal Jesraj as creditor No. 14 in respect of an amount of Rs. 42,000 and he also mentioned in the list of his own properties item 6. the amount of the aforesaid cheque with Panmal Jesraj. On the application of some of the other creditors the District Judge on 11th April 1932 ordered that creditor No. 14 should surrender the amount of the cheque or furnish security for the whole amount. Thereupon creditor No. 14 appealed to the High Court which by its order dated 8 July 1932 set aside the order of the District Judge as being premature. On 13 September 1932 Maganmal was adjudged to be insolvent and on the same date one Mr. Muir, Manager of the local branch of the National Bank (and after him his successor Mr. Macleod), was appointed receiver. It may be stated here that the creditor No. 14 was all along claiming the bulk of the amount of the cheque as bring due to his firm as arising out of the business transaction with the insolvent. His case was that the firm of Panmall Jesraj had taken over the dues of the older firm of Panmall Jetmal, that he was a secured creditor, and that on about 2 December, 1931 the dues of creditor No. 14 from the insolvent amounted to Rs. 44,539-12-3. The receiver made certain enquiries and on 20 October he submitted a report in the course of which he stated as follows: From the evidence of the above witnesses I am satisfied that the claim of creditor No. 1 that he is a secured creditor, is not convincing. I therefore recommend that he should he directed to deposit the amount with me within a fortnight or he should be asked to furnish sufficient security to the satisfaction of the Court.

(3.) On 17 November 1932 the District Judge made an order to the effect that the creditor No. 14 should deposit the whole amount in Court or furnish sufficient security within a certain time, on failure of which the amount would be realised by distress. Thereupon the creditor No. 14 again appealed to the High Court and this was disposed of by Mitter and M.C. Ghose, J.J., by their order dated 26 January 1933, by which they set aside the order of the District Judge and directed him to proceed with the case in the light of the observations contained in the judgment. Thereupon the matter went back to the learned Judge and the proceedings continued. On 28 March 1933 the receiver reported that about Rs. 7,000 was due to creditor No. 14 and he recommended that the balance must be brought to Court and also that creditor No. 14 was not entitled to the dues of the firm of Panmall Jetmall. On 8 May 1933 a second report, practically to the same effect with certain variations, was received from the receiver. Before the District Judge evidence was gone into and on 14 November 1933 the learned Judge made the order against which creditor No. 14 has preferred this appeal.