JHABBA LAL Vs. SHIB CHARAN DAS

JUDGEMENT

(1.) The question raised by this appeal is whether one creditor out of the general body of creditors has a locus standi in an application in the Insolvency Court made against the estate of the insolvent represented by the receiver, by a person claiming adversely to the insolvent s estate. In my opinion ha has no locus standi and no right of appeal to this Court against a decision in such an application.

(2.) The question is of some practical importance, and inasmuch as there is no authority in this Court, it seems desirable to set out the grounds of our decision at some length. The appellant before us, Jhabba Lal, was petitioning creditor in an insolvency petition against Jetha Mal, the result of which petition was that Jetha Mal was adjudicated insolvent and the court nazir was appointed receiver.

(3.) About the 19th of July, 1915, the appellant applied to the Insolvency Court for the attachment of the property now in dispute as being the property of the insolvent. Whether he had any right to do so unless the receiver had declined to interfere is immaterial, but the Insolvency Court made an order on the 23rd of August, 1915, that the receiver should attach the property, and, on the 6th and 7th of September following, it was duly attached. We think, however, that unless the receiver has refused to move and to given a decision by which each of the general body of creditors has been aggrieved, there is no provision in the Act which enables a creditor to make such an application to the Insolvency Court, and that his proper course is to apply to the receiver to set him in motion. If the receiver declines to move, then the creditor can apply to the court under Section 22 against the act or decision of the receiver. On the 11th of September, 1915, an application was made, out of which the present appeal arises. It was made by two persons, Shib Charan Das and Har Charan Das, a minor, by his next friend, sons of the insolvent. It was called an objection, and was in form an objection to the attachment and was a claim by these two persons, who were not creditors, and who were therefore strangers to the insolvency, that the property was theirs and not the property of the insolvent. That was clearly an application allowed by Section 22. By the application the receiver was made a party to it. That was right, and indeed necessary. The court ought to insist upon the receiver being made a party to any proceeding under Section 22.