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2009 DIGILAW 169 (AP)

S. Safi v. Rehamath Jahan

2009-03-17

P.S.NARAYANA

body2009
JUDGMENT :- The present Civil Miscellaneous Appeal is filed by the appellant under Order 43, Rule 1 of the Code of Civil Procedure (hereinafter referred to for short as 'the Code' for the purpose of convenience) challenging the order made in A.S.No.72 of 2005 on the file of the IV Additional District Judge, Tirupati. The said appeal was preferred as against the order and decretal order made in I.P.No.39 of 2004 on the file of the Additional Senior Civil Judge, Tirupati. CMAMP No.77 of 2009 is filed for reception of additional evidence. CMAMP No.2586 of 2008 is filed by Rahmath Jahan praying for vacation of the interim stay granted by this Court on 9.9.2008 in CMAMP No.1963 of 2008 in CMA No.856 of 2008. A preliminary objection had been raised that the C.M.A itself is not maintainable in the eye of law in the light of provisions of the Provincial Insolvency Act, 1920 (hereinafter referred to for short as 'the Act' for the purpose of convenience). Sri N.Pramod, learned counsel representing the appellant had taken this Court through the respective stands taken by the parties and the present order under challenge and would maintain that inasmuch as the appellate court made the order of remand, the present C.M.A had been preferred under the provisions of the Code. On the contrary, Sri Ahmed Mohiuddin, learned counsel representing the contesting respondent - vacate petitioner would maintain that when a specific provision under the provisions of the Act be applicable, the provisions of the Code cannot be invoked. Heard the counsel. It is not in serious controversy that the C.M.A had been preferred under Order 43, Rule 1 of the Code as against the order of remand made by the learned IV Additional District Judge, Tirupati, in A.S.No.72 of 2005. It is also not in serious controversy that the said appeal was preferred as against the order made in I.P.No.39 of 2004 on the file of the Additional Senior Civil Judge, Tirupati. Section 5 of the Act dealing with General powers of Courts reads as hereunder: "(1) Subject to the provisions of this Act, the Court, in regard to proceedings under this Act, shall have the same powers, and shall follow the same procedure as it has and follows in the exercise of original civil jurisdiction. Section 5 of the Act dealing with General powers of Courts reads as hereunder: "(1) Subject to the provisions of this Act, the Court, in regard to proceedings under this Act, shall have the same powers, and shall follow the same procedure as it has and follows in the exercise of original civil jurisdiction. (2) Subject as aforesaid, High Courts and District Courts, in regard to proceedings under this Act, in Courts subordinate to them, shall have the same powers and shall follow the same procedure as they respectively have and follow in regard to civil suits." Section 75 of the Act dealing with Appeals reads as hereunder: "(1) The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District Court, may appeal to the District Court, and the order of the District Court upon such appeal shall be final: Provided that the High Court, for the purpose of satisfying itself than an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit; Provided further, that any such person aggrieved by a decision of the District Court on appeal from a decision of a subordinate court under Section 4 may appeal to the High Court on any of the grounds mentioned in sub-section (1) of Section 100 of the Code of Civil Procedure, 1908 (5 of 1908). (2) Any such person aggrieved by any such decision or order of a District Court as is specified in Schedule I, come to or made otherwise than in appeal from an order made by a subordinate Court, may appeal to the High Court. (3) Any such person aggrieved by any other order made by a District Court otherwise than in appeal from an order made by a subordinate Court may appeal to the High Court by leave of the District Court or of the High Court. (3) Any such person aggrieved by any other order made by a District Court otherwise than in appeal from an order made by a subordinate Court may appeal to the High Court by leave of the District Court or of the High Court. (4) The periods of limitation for appeals to the District Court and to the High Court under this section shall be thirty days and ninety days respectively." In Paturi China Veerayya v. Talluri Gopalakrishna Rao and another (AIR 1957 AP 603) His Lordship Umamaheswaram, J., observed at paras 2 and 3 as hereunder: "An examination of the several provisions of the Provincial Insolvency Act (V of 1920) clearly shows that without being impleaded as a party to the insolvency petition, under the terms of Order 1, rule 10, Civil Procedure Code. It is open to the petitioner who is a creditor to oppose the application filed by the 1st respondent to adjudicate the 2nd respondent as an insolvent. Section 9 sets out the conditions when a creditor is entitled to present an insolvency petition against a debtor and section 10 relates to the presentation of an insolvency petition by a debtor. Section 14 provides that no petition, whether presented by a debtor or by a creditor, shall be withdrawn without the leave of the Court. Section 16 enacts that where the petitioning-creditor does not proceed with due diligence on his petition, the Court may substitute any other creditor to whom the debtor may be indebted in the amount required by the Act in the case of a petitioning creditor. Section 19(1) prescribes that where an insolvency petition is admitted the Court shall make an order fixing a date for hearing the petition. Sub-section (2) provides that the Court shall give notice of the order fixing the date for hearing the petition to all the creditors. Section 24 lays down the procedure to be adopted at the hearing of the petition. Clause (a) of sub-section (1) provides that the Court shall require proof that the creditor or the debtor, as the case may be, is entitled to present the petition. Sub-section (2) enacts that the creditors shall have the right to question the debtor when he is examined as to his conduct, dealings and property. Clause (a) of sub-section (1) provides that the Court shall require proof that the creditor or the debtor, as the case may be, is entitled to present the petition. Sub-section (2) enacts that the creditors shall have the right to question the debtor when he is examined as to his conduct, dealings and property. Sub-section (3) is significant as it provides that the Court shall, if sufficient cause is shown, grant time to the debtor, or to any creditor to produce any evidence which appears to it to be necessary for the proper disposal of the petition. The section referred to supra clearly established that the creditors to whom notice is given as provided under section 19(2) are entitled to appear at the hearing of the petition and oppose the maintainability of the insolvency petition by a creditor or a debtor. They are entitled to adduce evidence and satisfy the Court that the provisions of section 9 or 10 of the Act are not complied with and that the insolvency petition should be dismissed under section 25. As under the provisions of the Provincial Insolvency Act, it is open to the petitioner herein to prove that the 1st respondent is not a creditor of the 2nd respondent and that the insolvency petition is engineered by the 2nd respondent only with a view to defeat and delay his rights. I do not think it is necessary to add him as a party under the terms of Order 1, rule 10, Civil Procedure Code, Sections 5 and 18 no doubt make it clear that the procedure laid down in the Code of Civil Procedure shall so far as it is applicable be followed in the case of insolvency petitions; but it is unnecessary to apply the provisions of Civil Procedure Code, viz., Order 1, rule 10, to this case as the Provincial Insolvency Act itself has made adequate provision in this behalf. The point arising for decision in this case was considered by Jai Lal, J. in Mt. Chand Kaur v. Official Receiver, AIR 1936 Lah 499 (B). The learned Judge pointed out that though no case law on the subject had been cited on either side, in his opinion, the question was clear from the phraseology of S.24. I agree with his opinion and follow that decision. Chand Kaur v. Official Receiver, AIR 1936 Lah 499 (B). The learned Judge pointed out that though no case law on the subject had been cited on either side, in his opinion, the question was clear from the phraseology of S.24. I agree with his opinion and follow that decision. The decision in Jaleel Saheb v. Sreeniappa Ramaswamy Mudaliar and Co., ( AIR 1951 Mad 665 ) (A) does not directly apply to the facts of this case. But the principle laid down by the Judge, that the provisions of the Code of Civil Procedure will not apply when there are other provisions in the Provincial Insolvency Act, governs this case. The learned Judge rightly held under section 16 of the Provincial Insolvency Act, it was open to the Court to substitute another creditor in the place of the petitioning creditor if he did not proceed with due diligence on his petition and that he need not be added as a party under the terms of Order 1, rule 10, Civil Procedure Code". The first proviso to sub-section (1) of Section 75 of the Act specifies that provided the High Court for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such other order with respect thereto as it thinks fit. It is pertinent to note that the specific provision relied upon under Section 5 of the Act dealing with general powers of Courts. Sub-section (1) of Section 5 of the Act commences with the following words -'Subject to the provisions of this Act'. Hence, it is needless to say that Section 75 to be read along with Section 5 of the Act. In the light of the same, this Court is of the considered opinion that the C.M.A filed under Order 43, Rule 1 of the Code even as against the order of remand made by the appellate court while exercising insolvency jurisdiction cannot be maintained in the light of the language of Section 75 of the Act. It is needless to say that when a specific provision is specified under the Act, the said provision to be followed and a party cannot rely upon the provisions of the Code. In the light of this legal position, the C.M.A is not maintainable. It is needless to say that when a specific provision is specified under the Act, the said provision to be followed and a party cannot rely upon the provisions of the Code. In the light of this legal position, the C.M.A is not maintainable. The counsel for the appellant is permitted to convert C.M.A into C.R.P after complying with the other formalities. Let the Registry list the matter at the earliest point of time before the appropriate Court. To enable the counsel for appellant to take necessary steps, interim stay already granted to be operative for a period of one week.