Sripat Singh And Another v. Prodyat Kumar Tagore And Others

1. This appeal arises out of certain Insolvency proceedings. It appears that one Chattrapat Singh applied in the Court of the District Judge of Murshidabad to be declared an insolvent. This was on some date in 1909. His application be that Court was refused, and the order of the District Judge refusing his application was affirmed on appeal be this Court. Finally, in appeal be the Privy Council, Chattrapat Singh was adjudged an insolvent on the 20th November 1916. On the return of the records from England, on the 2nd August 1917, a Receiver was appointed. Thereafter, with a view be submitting a proposal of composition with his creditors, the insolvent on the 5th March 1918 presented an application to the District Judge, praying that the sum really due from him should be ascertained. He annexed to this application three sotedules, schedule A being a schedule of debts which he said he had satisfied; schedule B being a schedule of debts which he said had become barred by limitation in the interval that had elapsed from the date of his original application in 1909; the third, schedule C, was a schedule of the debts or claims which he admitted to be still due. In effect this application is one presenting an amended schedule in accordance with the provisions of section 11(d).

2. On this application the District Judge directed that necessary proceedings for ascertainment of the debts still due from the insolvent should be taken.

3. Unfortunately, thereafter, in or about the 9th May 1918, the insolvent Chattrapat died. Acting at the instance of his sons, the appellants before us, the learned District Judge decided, under section 10 of the Insolvency Act, that the proceedings should be continued as if the insolvent was shill alive.

4. In accordance with the orders that had been made by the District Judge, a number of creditors appeared, and were prepared to substantiate the claims that they made against the insolvent. When eventually on the 26th May 1919, the case came on for bearing a preliminary objection was taken on behalf of the creditors that the sons of the insolvent had no locus standi, either in the gutter of proposing or sub mitting a proposal for composition, or in framing the schedule, which the District Judge directed to be prepared under section 24. The District Judge gave effect to this contention and his order declining to permit the sons of the insolvent be appear and assist the Court in the preparation of the schedule he affirmed in a subsequent order, dated 9th June 1919. It is against the order refusing be permit the sons of the insolvent as his heirs and representatives be appear at the enquiry held, with a view be framing the schedule that this appeal is directed.

5. As a matter of fact a schedule has been prepared, in which claims have been entered, amounting, we are informed, be some 8 lakhs of rupees. To these claims, with the exception of sums aggregating some 80 thousand rupees, the heirs and representatives of the insolvent take exception.

6. As we have said, the application of the insolvent which initiated the subsequent proceedings is in effect an application presenting be the Court an amended schedule of creditors. That amended schedule is to be found in the schedule designated schedule C annexed be that petition. The creditors outside that schedule who wish be have their claims included in the schedule now to be framed are in substance in the position of creditors appearing under section 24(3), and we fail be understand how it happened that, notwithstanding the blear provisions of that sub-section, which not only empowers but requires the Court be serve notices on the insolvent and hear him, the orders against which exception is here taken came to be made. On general principles as well as on the express provisions contained in section 24(3), read with the further provision contained in section 47 of the Act, it was dearly incumbent on the Court to permit the present representatives of the insolvent to be present, so as be give them an opportunity of cross-examining the claimants, creditors and their witnesses and to offer rebutting evidence in support of their plea that their claims had either been satisfied or barred.

7. For these reasons, we set aside the orders of the District Judge shutting out the insolvent's representatives from the enquiry that should have been made under section 24(3) of the Act, and, in so far as the items entered in the schedule (which has been prepared) are objected to by the insolvent's representatives, we direct that proceedings be taken afresh according to law. This appeal is accordingly decreed with costs. As the result of our order setting aside the District Judge's order of the 26th May, all orders for sale made subsequent to that date are also set aside.

8. In so far as the order appealed against is one which holds that the representatives of the insolvent have no locus standi to submit a proposal for composition, all we need say with regard be that order is that it was clearly premature, and should the representatives of the insolvent after the schedule has been framed in accordance with law be advised be submit a composition proposal, it will be open be them to act on such advice as they may receive.

9. The appellants are entitled be their costs from the contesting respondents, who are respondents Nos. 6, 9, 10 and 13. The hearing fee is assessed at two gold mohurs against each respondent. The Receiver will gab his costs, two gold mohurs, out of the estate of the insolvent.

10. Appeal allowed.