AHMAD ALI Vs. ABUL KASEM FAZLUL HAQ

JUDGEMENT

(1.) This is an appeal against a judgment of Remfry J. whereby he dismissed an application which originated by a notice dated 7 April 1937, and purported to be made in an insolvency matter described as Case No. 109 of 1926, in which the insolvent was one Abul Kassem Fazlul Huq. The present application was made by one Syed Ahmad Ali, described as a creditor, and in it he asked for an order re-adjudicating the debtor insolvent and annulling a composition or scheme of arrangement; and that the properties of the debtor should vest in the Official Assignee without prejudice to the validity of any transfer or payment made or anything done or in pursuance of the composition or scheme. There was a claim in the alternative for the enforcement of the composition or scheme. It is quite clear however from the course of the proceedings that what the applicant really desired was that the debtor should be readjudicated in. solvent. The notice was supported by an affidavit affirmed by Syed Ahmad Ali on 20th March 1937. The case made by him, put shortly, is as follows:

(2.) Mr. Abul Kasem Tazlul Huq was, on 8 June 1926, adjudicated an insolvent by the Court on his own application. The debts due and owing by the debtor to various creditors amounted in all to over two lakhs of rupees, out of which the debtor had admitted claims of creditors amounting to the sum of Rs. 1,77,546. It is stated in the affidavit that one Keshab Lal Addy, since deceased, late, of 58, Wellington Street, in Calcutta, was a creditor to the extent of Rs. 4000. The claim of the said Keshab Lal Addy was admitted by the insolvent. The affidavit then went on to say that a scheme of composition was sanctioned by this Court on 26 August 1926, and two trustees were appointed subject to their furnishing security for the sum of Rupees 1,26,238-10-9 within three months from that date. These two trustees failed to furnish the required security. Accordingly, another order was made by this Court on 8 March 1927, whereby three other persons, Lutfi Ali Chaudhuri, Syed Mahammad Zinal Huq and Mr. Wajid Ali, were appointed trustees and they were ordered to furnish security in the sum of Rs. 97,033. These trustees did furnish security. In para. 6 of the affidavit filed by Syed Ahmad Ali, the material provisions of the scheme of arrangement are stated thus: (a) That the scheduled creditors of the insolvent were divided into two groups, namely group A and group B. Group A included the attaching creditors who had attached the insolvent's salary and the attached money had been brought into Court and were in the hands of the Registrar of this Hon ble Court. The rest of the creditors were placed in group B. (b) The creditors in group A were to receive rateably the money in the hands of Registrar of this Hon ble Court realized as the result of the said attachments. (c) The trustees would pay Rs. 15,500 rateably to the creditors in group B before 31 October 1926 and a like sum by 31 December 1926. (d) After payment of the said sum of Rs. 15,500 each to the creditors in group B the trustees would pay Rs. 6000 rateably to all the creditors in groups A and B alike on or before 30 June in every year until every creditor shall be paid eight annas in the rupee of their respective claims.

(3.) That is how the terms of the scheme of composition were set forth in the affidavit and the statement is substantially accurate. An allegation was made in the affidavit that by reason of the scheme and the order annulling the adjudication the creditors had been kept at bay. It was further alleged that in order to end an impasse several creditors included in the schedule put in by the insolvent had at various times applied to this Court for the annulment of the scheme of composition and for the readjudication of the insolvent. These applications had been adjourned from time to time until eventually they were all withdrawn on 9 March 1927. The applicant based his right to intervene in the matter of the insolvent upon the grounds that the creditor Keshab Lal Addy had died on 15 February 1931 intestate, leaving him surviving Bama Charan Addy (since deceased) who was his only son and sole heir. Bama Charan himself died on 5 February 1935,, after having made a will dated 15 December 1934, and a codicil thereto dated 23 December 1934, in which he named as sole beneficiary his son, Gopi Nath Addy, who by the provisions of the will and the codicil became entitled to the whole of the estate and the effects inherited by Bama Charan Addy from his father Keshab Lal Addy including the debt said to be owing by the insolvent to Keshab Lal Addy, so that by the death of Bama Charan, Gopi Nath became entitled, in his own right, to the benefit of the claim which originally Keshab Lal Addy had against the insolvent. The allegation, which really indicates the foundation of the alleged right of the present applicant to come-before the Court in connexion with this particular insolvency, is set out in para. 15 of the affidavit as follows: By a deed of assignment made on and bearing, date 17 March 1937, the said Gopi Nath assigned his said claim against the insolvent to your petitioner (i.e. Syed Ahmad Ali), absolutely.