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1973 DIGILAW 183 (PAT)

Mohammad Yusuf Khan v. Noor Mohammad Khan

1973-09-17

MADAN MOHAN PRASAD

body1973
Judgment Madan Mohan Prasad, J. 1. This appeal is directed against an order rejecting an application for review filed by the appellant in the following circumstances. 2. It appears that the appellant was adjudged an insolvent on the 16th January, 1969, and, the respondent, one of his creditors, thereafter, made an application on the 21st February, 1969, to be entered in the Schedule of creditors. Notice thereof was issued to the appellant. Being unsuccessful in getting it served on him, the creditor applied for issue of notice to his lawyer and this prayer was allowed by an order dated the 13th September, 1969. It was served and the service report was received on the 16th January, 1970. The creditor then filed an application on the 14th March. 1970, for fixing instalments at the rate of Rs. 300.00 to be realised from the salary of the insolvent. This matter also was ordered to be heard along with the debt-proof. It appears that in spite of the case having been fixed up on different dates for the purposes aforesaid, there was no appearance on behalf of the insolvent-appellant. It was only on the 23rd July. 1970, that his lawyer filed hazri. The disposal of the debt-proof matter was then fixed for the 13th August, 1970. It appears, however, that for some reason not known the records were not put up before the District Judge on that date and the matter was taken up on the next day, that is, the 14th August, 1970. On that date, the creditor proved the debt and the District Judge passed an order for his name being entered into the schedule under Sec.33, Provincial Insolvency Act (hereinafter called the Actp. On the next date, that is, on the 30th April, 1971, the matter of fixation of instalment could not be taken up, the Presiding Officer being away on circuit court. It was postponed to the 26th May, 1971. Meanwhile, however, on the 12th of May, 1971, the appellant appeared and filed a petition praying for a review of the order passed on the 14th of August, 1970. This application was heard on the 26th September, 1972, and rejected. The present appeal is directed against the said order. 3. It was postponed to the 26th May, 1971. Meanwhile, however, on the 12th of May, 1971, the appellant appeared and filed a petition praying for a review of the order passed on the 14th of August, 1970. This application was heard on the 26th September, 1972, and rejected. The present appeal is directed against the said order. 3. Learned Counsel for the respondent has raised a preliminary objection that the appeal is not maintainable in view of Order 47, Rule 7 of the Code of Civil Procedure (hereinafter referred to as the Code). It is quite obvious from a reading of the aforesaid rule that an order of the Court rejecting an application for review shall not be appealable in view of Order 47, Rule 7 (1), although the order granting such an application may be objected to on the grounds mentioned therein. It may be mentioned that an order under Sec.33 of the Act is appealable under Section 75 (2) of the Act. The appellant did not come up to this Court against the order aforesaid. Learned Counsel for the appellant has not contested this proposition of law. Accordingly, the appeal must be held to be not maintainable. 4. Learned Counsel for the appellant has, however, urged that the memorandum of appeal may be treated as an application in revision under Sec.115 of the Code. His argument is that no petition for review lay against the order passed by the District Judge. and. therefore, the application dated the 12th May, 1971, which purported to ask the court to review its order must be treated as a petition under Sec.151 of the Code, and consequently, the present application would be maintainable if treated as an application for revising the aforesaid order. So far as the power of this Court to treat a petition of appeal as one in revision is concerned, there is not the slightest doubt that in suitable circumstances it is open to this Court to do so. Learned Counsel has placed reliance on a decision of this Court in Ram Ran Vijay Prashad Singh V/s. Kishun Singh, ATR 1941 Pat 54. Tn that case, the learned Judges constituting the Full Bench held that a question of jurisdiction arose in that case and the memorandum of appeal was, therefore, treated as an application in revision. 5. Learned Counsel has placed reliance on a decision of this Court in Ram Ran Vijay Prashad Singh V/s. Kishun Singh, ATR 1941 Pat 54. Tn that case, the learned Judges constituting the Full Bench held that a question of jurisdiction arose in that case and the memorandum of appeal was, therefore, treated as an application in revision. 5. It has been urged that the ground for review in the present case being that the appellant had no knowledge of the order dated the 14th August, 1970, the petition for review would not come within the ambit of Order 47, Rule 1 of the Code. and. consequently, the petition must be deemed to he one under Sec.151 of the Code. There is no difficulty in admitting the proposition that the petition for review under Order 47, Rule 1 of the Code could not be granted, because there was no discovery of any new or important matter of evidence or any mistake or error apparent on the face of the record or any other sufficient reason. Reliance has been placed on the decision in the case of Baikunthesh Prasad Singh V/s. Ganesh Ram, AIR 1954 Pat 163 . Tn that case, a question arose whether the circumstance that the transfer of an appeal was not notified to the respondent, or that the respondent was not aware of the transfer in proper time before the hearing of the appeal, is a ground sufficient to brine the case within the ambit of Order 47, Rule 1 of the Code. The learned Judges answered the question in the negative. 6. The question which comes up next for consideration is whether the present petition of appeal should be treated as a petition in revision. Learned Counsel for the respondent has placed reliance on a Bench decision of this Court in Firm Nanak Ram Moti Lal V/s. Jugal Kishore, AIR 1935 Pat 177. This was a case of insolvency. An application for review had been filed against an order dismissing the debtors petition under Sec.25 of the Act. Learned Counsel for the respondent has placed reliance on a Bench decision of this Court in Firm Nanak Ram Moti Lal V/s. Jugal Kishore, AIR 1935 Pat 177. This was a case of insolvency. An application for review had been filed against an order dismissing the debtors petition under Sec.25 of the Act. The learned Judges held that no appeal lay against an order refusing review and they rejected also the prayer to treat the application as one in revision on the ground that it would not be proper to utilise the power of the Court in revision in order to entertain an appeal where an appeal is expressly prohibited by the Civil Procedure Code or where an appeal has long been barred by the application of the law of limitation. The facts of the instant case are similar to the case before their Lordships. The instant case stands on a footing inferior to the case of Firm Nanak Ram Moti Lal inasmuch as in the present case the order against which an application for review was filed was one passed under Sec.33, of the Insolvency Act in respect of which the insolvent has no right to be heard whereas the petitioner in the aforesaid case had a right to be heard under Sec.24 of the Act before an order could be passed under Sec.25 of the Act. Sec.33 of the Act is as follows: "(1) When an order of adjudication has been made under this Act, all persons alleging themselves to be creditors of the insolvent in respect of debts provable under this Act shall tender proof of their respective debts by -producing evidence of the amount and particulars thereof, and the Court shall, by order, determine the persons who have proved themselves to be creditors of the insolvent in respect of such debts, and the amount of such debts, respectively, and shall frame a schedule of such persons and debts. Provided that, if, in the opinion of the Court, the value of any debt is incapable of being fairly estimated, the Court may make an order to that effect, and thereupon the debt shall not be included in the schedule. (2) A copy of every such schedule shall be posted in the Court-house. Provided that, if, in the opinion of the Court, the value of any debt is incapable of being fairly estimated, the Court may make an order to that effect, and thereupon the debt shall not be included in the schedule. (2) A copy of every such schedule shall be posted in the Court-house. (3) Any creditor of the insolvent may, at any time before the discharge of the insolvent, tender proof of his debt and apply to the Court for an order directing his name to be entered in the Schedule as a creditor in respect of any debt provable under this Act, and not entered in the schedule, and the Court, after causing notice to be served on the receiver and the other creditors who have proved their debts, and hearing their objections (if any), shall comply with or reject the application." It will appear from Sub-section (3) that the notice of debt-proof matter is to be given to the receiver and other creditors who have proved their debts, and, their objections, if any, have to be considered. It will be relevant to mention in this connection that before the Act was amended by the Amendment Act, 1926, Sub-section (3) of Sec.33 of the Act required notice to be served on the insolvent and the other creditors. In view of the report of the Civil Justice Committee to the effect that the insolvent-debtor should be out of the picture at the stage of the proof of debts by the creditors, the aforesaid amendment was made. It is thus obvious from the amendment that the Legislature by substituting the word "receiver" for the word insolvent" clearly intended that no notice of the debt-proof matter is required to be given to the insolvent. In the instant case, therefore, the appellant had no right to be heard or to be noticed in respect of the proof of the debt by the creditor-respondent. 7 There are several other considerations which weigh against the appellant. Firstly, it must be stated that he has been negligent throughout as appears from the orders passed on several dates. Secondly, he has not come to Court with clean hands inasmuch as he has made some statements of facts which are belied by the records. Thirdly, no prejudice can be caused to him in case his prayer is refused. Firstly, it must be stated that he has been negligent throughout as appears from the orders passed on several dates. Secondly, he has not come to Court with clean hands inasmuch as he has made some statements of facts which are belied by the records. Thirdly, no prejudice can be caused to him in case his prayer is refused. With regard to the conduct of the appellant, it appears that although the appellants lawyer was served with notice before the 16th January, 1970, neither the appellant nor- his lawyer took any step whatsoever, although the case was put up on different dates until the 23rd July, 1970. The appellant thus must have had knowledge of the debt-proof matter in January, 1970. Further, it appears from the several orders passed by the Court subsequently that the Court directed the information of the orders passed by it to be given to the lawyers for the parties. It can be presumed thus that such orders were conveyed to the lawyer concerned. In any case, although the lawyer had come to know of the debt-proof matter in January, 1970, he appeared only on the 23rd July, 1970. No objection whatsoever was raised by the appellant in spile of the knowledge of the debt-proof matter either before or on the 23rd July, 1970. The case was fixed for the disposal of the debt-proof matter on the 13th August, 1970, and, for some reason or other the case was taken up on the next day. The grievance is now being made that he had no knowledge that the case would be taken up on the 14th of August, 1970. In view of the fact, however, that he had appeared on the 23rd of July, 1970, it is apparent that he knew that the case would be taken up on the 13th of August, 1970. There is no order passed on the 13th August, 1970. It is not known for what reason the case was not taken up that day. It is stated by the appellant in his petition of appeal as well as in his petition for stay of the proceedings filed in this Court that on the 18th of August, 1970, the records were not put up before the District Judge and that they were placed on the 14th August, 1970, on which date he passed the order in the absence of the appellant. There is no averment as to whether the appellant had come to the Court on the 13th August, 1970. It appears from the record that no step by way of filing hazri was taken by the appellant on that date. If he had been present on the 13th August, he would in all probability have known that the records would be put up on the next day and he would have been present also on the date. It seems, therefore, that he was absent on the 13lh August, 1970. II he was not present on the 13th August, 1970, which was the date fixed in the case, he was not entitled to have any notice of the next date fixed. (See Raja Gounder V/s. Sabapathi Mudaliar, AIR 1952 Mad 798 ). The facts stated above clearly prove his conduct. In absenting himself on various dates he was utterly careless and negligent. His conduct has been similar even subsequent to the 14th of August, 1970. Although he filed the petition purporting to be one for review on the 12th May, 1971. it appears that he absented himself even thereafter on various dates and took no step whatsoever. I- have not the slightest doubts, therefore, that the appellant has been guilty of laches throughout. 8. With regard to another aspect of his conduct, it must be stated that in his application for review filed before the court below, he had stated that he was not aware of the petition filed by the respondent with regard to debt-proof matter, and, accordingly, he could not have filed any objection. It was said that he learnt about it for the first time from a letter received from his lawyer on the 6th of May, 1971, As I have already stated, his lawyer had been noticed in January, 1970 and he had appeared on the 23rd July. 1970. It is difficult to believe that the appellant had not been informed until the 6th May, 1971, about the debt-proof matter. In this Court, he has stated in his petition of appeal that the matter was heard without the knowledge either of the insolvent or his lawyer. This is also difficult to accept. The lawyer, having been present on the 23rd July, 1970. In this Court, he has stated in his petition of appeal that the matter was heard without the knowledge either of the insolvent or his lawyer. This is also difficult to accept. The lawyer, having been present on the 23rd July, 1970. and having known that the case would be taken up on the 13th August, could not but have known, if he had cared to find out that the records, if they had not been placed before the District Judge on the 13th August, 1970, would be placed before him on the next day. 9. Coming now to the third consideration, it is obvious from what I have stated earlier that the insolvent is not in the picture tit the stage of proof of debt under Sec.33 of the Act. He has no right to be heard at this stage. It is only the receiver and then creditors who have a right to be heard. If a receiver has been appointed, it is he who is to protect the interest of the debtor otherwise it is the Court which has to do so. As soon as a person is adjudged an insolvent, his entire assets come to the Court and they are in its hands, unless a receiver is appointed. At the time of adjudging a person an insolvent or subsequently, in view of Sec. 50 of the Act, it is open to the receiver to pray for ex-punction of any entry in the schedule or any reduction of the amount of the debt where he thinks that a debt has been improperly entered in the Schedule. The Court may also expunge an entry or reduce the amount upon an application of the creditor where no receiver has been appointed, or where the receiver declines to interfere in the matter, or in the case of a composition or scheme, upon the application of the debtor. Thus, there is no real prejudice caused to the appellant by the order passed on the 14th of August, 1970. It is well settled that where an order has not resulted in a substantial failure of justice, the High Court may refuse to exercise its discretion even though the conditions which attract the jurisdiction of the Court exist (see the case of Brij Gopal V/s. Kishan Gopal, AIR 1973 SC 1096 ). 10. It is well settled that where an order has not resulted in a substantial failure of justice, the High Court may refuse to exercise its discretion even though the conditions which attract the jurisdiction of the Court exist (see the case of Brij Gopal V/s. Kishan Gopal, AIR 1973 SC 1096 ). 10. The argument of learned Counsel for the appellant, in essence, is that he had no knowlegdc of the date fixed in the case on which the order was passed and he should, therefore, be allowed an opportunity to raise objections to the proof of the debt. He cannot be allowed to do so, for he has no right to be heard at this stage. Further it is clear from what I have said above; firstly, that there is no question of jurisdiction involved in the present case, the appellant not having the right to be heard on that date, the order is not one without jurisdiction. Secondly, in view of my finding that there has not occasioned any failure of justice on account of the aforesaid order there is no ground for interference. Thirdly, the conduct of the appellant has been one of laches, there appears thus no good ground for granting him the relief prayed for after entertaining this case is revisional jurisdiction. It is not a fit case where this Court may exercise its discretion in favour of the appellant for) the reasons which have been given above. 11. For the reasons aforesaid, this appeal is dismissed. In the circumstances of this case, however, there will be no order for costs. 12. Learned Counsel for the respondent prays that it may be mentioned that the stay granted by this Court by order dated the 22nd December, 1972. is vacated.There is no doubt that the order of stay has come to an end with this decision.