MUSAN MAHTON Vs. CENTRAL CO-OPERATIVE BANK

JUDGEMENT

(1.) This appeal is from an order of the District Judge of Patna rejecting the application of the appellant to declare him an insolvent. It appears that the appellant owed certain amounts to the Co-operative Society, of Bihar which is in liquidation and that an award has already been passed in favour of the liquidator. The only ground upon which the appellant's petition was rejected by the learned Judge was that Section 42(6) of the Co-operative Societies Act will in spirit be contravened if the petitioner is declared insolvent. Section 42(6) of the Act provides that save in so far as is hereinbefore expressly provided no civil Court shall have any jurisdiction in respect of any matter connected with the dissolution of a registered society under this Act.

(2.) The learned Judge observes in his order that upon the spirit of this rule the insolvency proceedings will interfere with the dissolution of the registered society to which the applicants in insolvency are debtors. As I construe the rule I find nothing express or implied in it to prevent the Court from entertaining the application of one of the debtors of a Co- operative Society which is in liquidation for being declared insolvent. It appears to me that in deciding whether such a debtor should or should not be adjudicated an insolvent, the Court is not dealing with any matter connected with the dissolution of the Society nor will the dissolution be necessarily interfered with by reason of adjudicating such a debtor to be an insolvent.

(3.) The Official Liquidator can press his claim against the insolvent in the same way as the other creditors will do and in this particular case it appears that the Official Liquidator will be in no worse position than any other creditor as it is admitted that the Co-operative Society of Bihar is a secured creditor. I would therefore allow this appeal, set aside the judgment of the Court below and direct that the appellant's petition be disposed of according to law. There will be no order as to costs. James, J.