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1904 DIGILAW 61 (CAL)

Sarat Chandra Mukerji v. Mahomed Hossein

1904-03-24

body1904
JUDGMENT Geidt, J. - This is an appeal against the order of the District Judge of Burdwan, dated 28th June 1902, by which he set aside all order of his predecessor made on 11th January 1901 declaring the Appellant Sarat Chandra Mukerji to be an insolvent. It appears that one Nowabjan in November 1900 obtained in the Calcutta Small Cause Court a decree for money against the Appellant and obtained partial satisfaction. On 9th January 1901 Nowabjan presented to the District Court of Burdwan a petition asking that the Appellant who was represented as residing at Bamanpara in the Burdwan District should be declared an insolvent. Notice was served and on 11th January the day fixed for hearing, Sarat Chandra appeared and expressed his willingness to be declared an insolvent. An order to that effect was accordingly passed on that day. 2. A month and-a-half afterwards, namely, on 26th February 1901, two other creditors of the Appellant who are Respondents before us, presented the petition on which the order now under appeal was passed. The petition purported to be made under sec, 108 of the CPC and alleged that the insolvency proceedings had been carried out fraudulently without the knowledge of the numerous creditors of the insolvent so as to enable the latter to get free of his debts. The Petitioners therefore prayed that the Court would set aside the order declaring Sarat Chandra to be an insolvent and would try the case afresh. After numerous adjournments the District Judge in June 1902 set aside the order of 11th January 1901, on the grounds (1) that no notice was issued to the creditors, (2) that the judgment-debtor's residence was not in the Burdwan District and that there was fraudulent misrepresentation of the residence of the judgment-debtor and (3) that the application was not bond fide. 3. The Appellant contends that the District Judge was not competent to cancel his predecessor's order of 11th January as there is no provision of the Code enabling him to do so. The District Judge does not quote the authority under which he passed his order, and there can be no doubt that sec. 108 of the Code of Civil Procedure, which the Respondents invoked has no applicability. The District Judge does not quote the authority under which he passed his order, and there can be no doubt that sec. 108 of the Code of Civil Procedure, which the Respondents invoked has no applicability. That section refers to the method of setting aside a decree which has been passed ex parte, owing to the summons not being served, or owing to the Defendant being prevented from appearing. But an insolvency order is not a decree, for it is one of the orders mentioned in sec. 588 and in the second place the Respondents can not be regarded as Defendants, for the reason that when a decree-holder applies that a judgment-debtor shall be made an insolvent, he is apparently not required to name other creditors. The District Judge's proceedings were rather in the nature of a review of his predecessor's order of January 1901 and this is the term used in the affidavit by which the Respondents supported their petition of 20th February. 4. It may be that the application made on 26th February 1901 does not quite come within the terms of sec. 623, which appears to com template action by a party to a decree or order, although the opening word of that section uses the word "person" and not party, and we have therefore to determine whether independently of the provisions of the Code of Civil Procedure, the District Judge was competent to make the order complained of. 5. The application for the purpose of declaring the judgment-debtor to be an insolvent was not made in this case by the insolvent himself, but by one of the creditors, and hence, having regard to the provisions of sec. 347 of the Code no notice in writing was necessary to be given to the other creditors. But it must be borne in mind that an order declaring a judgment-debtor to be an insolvent affects not merely all the parties before the Court when the order is made, but also all creditors of the judgment-debtor even although they may have had no notice of the proceedings. In ordinary cases no one is affected by a decree or order to which he is not a party and he has therefore no reason to apply for a review of such decree or order. In ordinary cases no one is affected by a decree or order to which he is not a party and he has therefore no reason to apply for a review of such decree or order. But in the case of an insolvency order if a review were denied to a creditor, who through the fraud of the judgment-debtor or decree-holder was kept in ignorance of the proceedings, he, although equally affected by the order, would be in a worse position than a creditor who had notice of the proceedings, for the latter would be entitled to apply for a review of the order. It is for this reason that the Courts have held that an insolvency order may be set aside if it was obtained by fraud or in the absence of jurisdiction on the part of the Court making the order. As authority for this proposition we may refer to the case of Ram Komal Saha v. Bank of Bengal of Akyab 5 C. W. N. 91 (1900) where it said, "It has been held both here and in England that an adjudication order can only be set aside on the ground that it has been obtained by a fraudulent representation of indebtedness in favour of the creditor who has obtained the order when there is no debt whatsoever, or for want of jurisdiction." 6. In the present case the District Judge has held that the insolvency order was obtained by a fraudulent misrepresentation of the residence of the judgment-debtor. It was alleged that he resided in the Burdwan District, whereas he was only in biding for a few days at a village in that District, his real residence being in the Hughly District. There was therefore a complete want of jurisdiction on the part of the Court in making the insolvency order. And it seems to us that when such an order was made without jurisdiction, and was obtained by a fraudulent misrepresentation the Court had inherent power to set it aside. [See in this connection the case already cited as also Ramessuri Dasi v. Durga Das I. L. R. 6 Cal. 103 (1880) and Hameeda Bibee v. Noor Bibee 9 W. R. 394 (1868)]. We accordingly hold that the District Judge was competent to set aside the order passed by his predecessor on 11th January 1901. The appeal is dismissed with costs. 103 (1880) and Hameeda Bibee v. Noor Bibee 9 W. R. 394 (1868)]. We accordingly hold that the District Judge was competent to set aside the order passed by his predecessor on 11th January 1901. The appeal is dismissed with costs. We assess the pleader's fee at 3 gold mohurs.