BOHREY SHANKAR LAL Vs. BANSI DHAR

JUDGEMENT

(1.) The point taken in this revision is that the District Judge of Agra in his judgment dated 26 February 1936 has erred in dismissing an appeal against an order of annulment in an insolvency proceeding. On 10 July 1931 Bohrey Shankar Lal - who is the applicant before, me - and Ganga Earn applied for an order of adjudication in insolvency against Bansidhar, opposite party 1. On 4th March 1932 Bansidhar was adjudged insolvent and he was directed to apply for discharge within one year. It appears that certain alienations had been made by the insolvent which it was sought to set aside under Section 53 or Section 54 of the Act. On 12 October 1932 notice was sent at the request of the Official Receiver to the two petitioning creditors to pay necessary expenses for proceedings under Section 53 or Section 54. On 26 October 1932 the Official Receiver reported to the insolvency Judge that the creditors had given no proof in support of their application to have the alienations set aside and he prayed that the application be filed. On 7 December 1932 the proceedings for setting aside the alienations were re-opened at the request of the Official Receiver, who had been approached by one or both of the petitioning creditors. On 8 February 1933 the Official Receiver informed the Court that he had fixed the 14 February for attachment of such property as was free from encumbrance (from the proceeds whereof the cost of setting aside alienations was to be met) and that Bohrey Shankar Lal had deposited Rs. 20 as expenses and he requested that information be given to Bohrey Shankar Lal's counsel, The Court directed that information be sent accordingly and that the Official Receiver's report should be submitted by 5th April 1933. Meanwhile on 7 March 1933 the office reported that no application for discharge had been made by the insolvent and that no application for enlargement of time had been made by the petitioning creditors; and on 10th March 1933 the Official Receiver reported that in accordance with the office report the order of adjudication should be annulled under Section 43 of the Act. The Insolvency Court directed that the matter be put up on 15 March and on that date the order of adjudication was annulled apparently in the absence of the petitioning creditors.

(2.) On 27 April 1933 the petitioning creditors applied to the insolvency Judge to set aside the order of annulment dated 15 March 1933; but the Court disallowed that application and directed that the creditors should file a fresh application for the adjudication of Bansidhar. On 19 May 1933 the petitioning creditors again applied, apparently by way of review, for setting aside the ex parte order of annulment dated 15 March 1933; but on 6 October 1933 the insolvency Court passed an order to the effect that "The order dated 27 April 1933 must stand".

(3.) Thereafter the petitioning creditors appealed to the District Judge and the latter, purporting to act under Order 41, Rule 11, Civil P.C., allowed the appeal without having issued notice to Bansidhar. That order was for obvious reasons set aside by a Bench of this Court of which I was a member and the District Judge was directed to re-hear the appeal. The appeal has now been heard according to law and has been dismissed. It is urged by learned Counsel for the applicant that the insolvency Court was not competent to annul the adjudication without notice to the petitioning creditors and has further argued that under Section 27(2) of the Act, the Court had power to extend the time for discharge even after the expiry of the period allowed to the insolvent for applying for his discharge. Learned Counsel for the applicant has cited authority of various High Courts in support of the latter proposition and I unhesitatingly accept it. On the other hand, my attention has been drawn to Section 43(1) of the Act which provides that: If the debtor does not appear on the day fixed for hearing his application for discharge or on such subsequent date as the Court may direct, or if the debtor does not apply for an order of discharge within the period specified by the Court, the order of adjudication shall be annulled, and the provisions of Section 37 shall apply accordingly.