CHOWDAPPA GOUNDER, A CREDITOR OF THE INSOLVENT KATHAPERUMAL PILLAI,FOR HIMSELF AND ON BEHALF OF ALL THE CREDITORS Vs. KATHAPERUMAL PILLAI

JUDGEMENT

(1.) The first question in this appeal is whether an appeal lies. The Official Receiver of Coimbatore in proceedings in insolvency applied to the Lower Court under Section 53 of the Provincial Insolvency Act to declare void against him an assignment or sub-lease in favour of the 2nd respondent before it. The Lower Court dismissed the petition. The appellant before us is not the Official Receiver but one of the creditors; and a preliminary objection is taken that such an appeal by a single creditor is not competent. It-does not appear that the appellant before appealing moved the Official Receiver to appeal. For the purposes of this argument I assume that the Official Receiver was not moved to appeal.

(2.) The appellant relies very strongly on the general wording of Section 75, sub-clauses I and 2, which undoubtedly lays down that any creditor aggrieved by the decision of the District Court may appeal to the High Court in a matter of this kind. The short question then is, is the appellant a creditor aggrieved by this order and does the fact that he did not first move the Official Receiver to appeal make him any the less an aggrieved creditor?

(3.) Now, the genera scheme of the Act is that in insolvency proceedings creditors cannot act individually and independently but are represented by the Official Receiver who alone may ordinarily take action. Clearly, however, the Official Receiver can act for the whole body of the creditors only when the interests of the whole body are homogeneous; if the interests of individual creditors conflict, then the Official Receiver cannot represent the interests of the creditor who is standing on his individual rights as opposed to those of the general body, so far as that right is concerned. Such a case would occur, for example, when the Official Receiver or some creditor wishes to have the debt of another creditor struck out as fictitious, or when one creditor wishes to be ranked as a secured creditor, or when an alienation in favour of one creditor is sought to be declared void under Section 53 or 54 of the Act. In such cases it seems to me clear that no one but the individual creditor can represent his individual interest, as distinguished from the interest he possesses homogeneous with those of the general body of creditors. The general principle thus would seem to be that where the insolvency proceedings under consideration concerns only an individual creditor and his interests, he alone can agitate the matter both in the original Court and in the appeal Court. Reference may be made in this connection to the reported ruling in Khushhalai Ram V/s. Bholar Mal (1915) ILR 37 A 252. In such cases, however, there would ordinarily be an order by the Receiver as representing the general body of creditors, and a fortiori, the homogeneous interests of all individual creditors, including the creditor opposed to him in the matter of that creditor's individual claims, unfavourable to the individual creditor's individual claims and the latter would apply first of all to the Court under Section 68 for redress. (See Thiruvenkatachariar V/s. Thangayiammal (1915) ILR 39 M 479 : 29 M L J 755. But where the proceeding concerns the general interests of the general body of creditors, then individual creditors are not in the first instance permitted ordinarily to act individually but must be represented by and must act through the Official Receiver. What then is the principle to be invoked if the Official Receiver being moved on behalf of the general body of creditors, refuses to act. The proper principle, as I conceive, has been laid down by Cave, J. in Ex parte Kearsley : In re Gense (3). It is quoted in extenso in Anantanarayana Aiyar V/s. Sankara- narayana Aiyar (1923) ILR 47 M 673 at 682