AMIR CHAND KHANNA Vs. ANUKUL CHANDRA BHANDARI

JUDGEMENT

(1.) This appeal arises out of certain orders passed in an insolvency proceeding. One Jogesh Chandra Chatterji presented a petition to be adjudicated an insolvent on the 7 January 1922, and to his petition attached a schedule giving a list of 12 creditors. He was adjudicated an insolvent on the 5 April 1922, and a Receiver was appointed who appears to have sold up the assets and thereby collected funds for part payment to the creditors. Thereafter, in February a March, 1923, six persons, Anukul Chandra Bhandari, Bhola Nath Mitra, Amarendra Nath Mallik, Naran Chandra Ghose, Kunji Behari Manna and Fazley Hug Sheikh, who were not among the creditors mentioned in the schedule, applied to be entered therein and the learned additional District Judge ordered ex parte that their names be so entered. On the 27 April 1923, the present appellant who is a creditor mentioned in the schedule put in a petition stating that those debts were bogus debts, and the Judge then ordered the Receiver to report in the matter. The Receiver went to the shop and after certain evidence prepared a report which Was put up to the learned Additional District Judge who, on the 30 May 1923, recorded his order as follows: "Bead Receiver's report which I accept in toto as regards the persons reported on. The name of Amarendra Nath Mallik to whom the obligation of insolvent was incurred after adjudication, will be expunged from the schedule. The names of the rest will be incorporated in the schedule with the debts due to each according to Receiver's report." There is nothing to show that this order was passed in the presence of any of the parties. In fact on the 1 June 1923, Amarendra Nath Mallik made an application praying for having a chance of being heard and for the order of the 30 May 1923 being reversed. On the 13th June the learned Additional District Judge heard his application ex-parte and than admitted Amarendra Nath Mallik as a person whose name could be entered in the schedule. Amir Chand (the present appellant) applied to have these orders set aside or re-considered as they were passed in his absence. This application was refused and the present appeal (sic) is against this order.

(2.) In appeal it is urged on behalf of Amir Chand that the procedure under Section 33(3) of the Provincial Insolvency Act has not been observed. That section provides that any creditor of the insolvent whose name is not in the original schedule may apply to have his name entered therein; and then the Court after causing notice to be served on the insolvent and the other creditors who have proved their debts after hearing their objection, if any, shall comply with or reject the application. As to this it is clear that no notice was issued at all before the names were so entered (on the date no one of the scheduled creditors had proved his debt), but subsequently Amir Chand appeared and prayed for expunging the names of certain creditors under the provisions of Sub-section (1) of Section 50, Provincial Insolvency Act. Now it is perfectly clear that the names of those creditors should not have been entered in the schedule until the Court has considered any cause that might have been shown against so doing and this was not done.

(3.) It is next urged that the Additional District Judge had no jurisdiction to give over the whole matter to the Receiver and simply accept his report. He was bound to come to a judicial finding either before he entered the names of some of the creditors under Section 33 or before he refused to remove the names under Section 50 after considering the report of the Receiver, as to whether or not each or any of those debts were really due. We agree with this contention. Various other points were raised, such as whether some part of the debts was barred by limitation, whether the debts of Anukul Chandra Bhandari under the handnote--the handnote being dated three months after the application for adjudication and three days before the adjudication--is a valid debt in view of Section 34(2) read with Section 28(7); and further whether Jogesh Chandra Chatterji was ever liable for the alleged debt of his father Umesh Chandra Chatterji on an old hat-chitta and whether the hat-chitta that he executed two months after the adjudication in July 1922 in favour of Anukul Chandra Bhandari can be put in the schedule in view of the provisions of Section 34(2). On these matters we come to no adjudication in this proceeding. In our opinion the Judge did not come to any judicial determination as to whether all or any of these debts are debts which should be entered in the schedule, but had practically only acted on the Receiver's report, without having issued necessary notices before passing his orders We hold that he must proceed according to the statute and determine judicially: in the presence of the appellant and after notices to other scheduled creditors on the validity of each claim to be entered in the schedule. We do not say, that he cannot consider the Receiver's report and the evidence recorded by him, but he must come to a judicial decision on each debt set out.