- (1.)WHEN these two appeals were taken up, Mr. Sivaramakrishnaiah appearing for the appellant in O. S. A. No. 50 of 1973 as also Mr. Dolia in O. S. A. 75 of 1975 have raised a preliminary objection that the Judge sitting in insolvency ought not to have enquired into the Judge's summons taken out by the Official assignee under Section 7 of the Presidency Towns Insolvency Act and given a judgment on the merits. Their contention is that this is a case in which the appellant in each of these appeals did not admit the liability as set out in the report of the Official Assignee and as claimed by him in the Judge's summons and at all material times there was a contest by the appellants regarding their liability to the claim made by the Official Assignee. Mr. Sivaramakrishniah arguing on the preliminary objection would say that the proviso to Section 7 of the Act having been introduced with a distinct purpose has a meaning and a significance to serve. He would invite our attention to the history of Sections 7 and 36 of the Presidency Towns Insolvency Act and would contend that the parliament was prompted to amend Section 36, Clauses 4 and 5 and introduce the proviso to Section 7 of the main Act only with the definite purpose and objective to avoid a summary investigation of claims by the insolvency Court without going through the process available under the common law. He would in the main rely upon the Full Bench decision of our court and would say that the Insolvency Court not having adopted or followed the ratio in that decision the ultimate conclusions rendered by the said court cannot taken to be an enforceable judgment and, therefore, this appeal has to be allowed on that ground after upholding the preliminary objection. The Official Assignee on the other hand would say that such an objection was taken at the trial stage before the insolvency Judge and the said objection was negatived and overruled and it was only thereafter that the parties entered upon the Judge's summons and went into a trial on the triable issues arising therein and that the parties willingly let in oral and documentary evidence in support of their respective contentions and that in the circumstances therefore it is not still open to the appellants to raise once over the objections that the Judge's summons is not investigable by the Insolvency Court. One other point that was also stressed before us was that it was in the discretion of the insolvency Judge after a prima facie examination of the material touching upon the Judge's summons to decide whether he should take up the cause and investigate it and ultimately decide it or direct the Official Assignee to file an independent suit under the provisions of the common law. In the instant case the Insolvency Court having exercised such a discretion and the parties having by necessary implication surrendered to it and waived their objections after their preliminary objection was overruled cannot, in this court as an appellate court, reopen the question and canvass once again the position that the Judge's summons is not maintainable.
(2.)NO doubt, it is true that Section 7 of the Presidency Towns Insolvency Act, hereinafter referred to as the Act, as it stood without the proviso added to it in 1927, gave plenary powers to the court to decide on questions whatsoever whether of law or of fact which may arise in any case of insolvency coming within the cognisance of the said court. There was also the ancillary powers to the insolvency Court under the said provision to decide any question if in its opinion it was necessary or expedient to do so for doing complete justice or making a complete distribution of the property in any such case. The latter portion of Section 7, therefore, reflects the discretionary power in the court to decide such matters. Expediency, necessity or obligation to render complete justice for the purpose of making equitable distribution of the insolvent's property are all matters which the insolvency court can look into for purpose of considering whether the question before it has to be decided by it or such questions have to be relegated to a Civil Court for a fuller adjudication of the subject-matter. If once the Insolvency Court decides that the matter could be dealt with by it, may be on the ground of expediency or necessity, may be also on the ground that it was to entertain and decide upon it so as to render justice, all such incidents reflecting upon the exercise of jurisdiction by the court are pointers' to the fact that the court exercised its discretion one way or the other. It is not obligatory for a court to look into a Judge's summons filed by the Official Assignee and brought before it, in other case and adjudicate upon it. It may reject it as well on the ground that in its opinion it is neither expedient nor necessary to decide such matter in summary way. But there may be cases also wherein the Court in the exercise of its discretion as a well-instructed institution take up such matters on file for decision and ultimately decide it for itself. If after the exercise of such jurisdiction may be a discretionary jurisdiction, the court calls upon the parties before it which in an insolvency court will invariably be the Official Assignee on the one side and the debtor of the insolvent on the other, then it is for the aggrieved party namely the insolvent's debtor to take such necessary steps to see that the further progress of hearing of the subject-matter by the insolvency court is stemmed by taking up the matter further in appeal. Section 8 of the Act provides for appeals in insolvency. It is not in dispute before us that any order made by an insolvency court on a preliminary objection taken by the aggrieved party before it regarding the exercise of its discretionary jurisdiction under Section 7 is appealable. In fact in O. S. A. 50 of 1973, Gokulakrishnan J. in Appl. No. 391 of 1972 (Mad) passed the following order:-
" this is an application for deciding the issue regarding jurisdiction of this court under Section 7 of the Presidency Towns Insolvency Act as a preliminary issue. I do not consider it proper to dismiss the application filed by the Official Assignee as not being maintainable under Section 7 of the Act. The matter can as well be considered in the main petition and a comprehensive order may be passed. Time and unnecessary proceedings can be saved if this application is dismissed at this stage relegating the consideration of the issue in the main petition. In that view, this application is dismissed. "

(3.)MR. Dolia would also represent before us that it was about this time that he wanted to raise additional grounds and wanted that his preliminary objection should also be noted by the Insolvency Judge. But it is common ground that the parties never interdicted the further progress of the hearing of the Judge's summons by challenging the order of Gokulakrishnan J. in any manner known to law. In this view, therefore, the parties had waived their objection after having been notified that their objection is not sustainable and not only this; the parties had participated in the enquiry, filed documents, let in oral evidence and ultimately took the decision of the learned Judge. In such circumstances we are afraid that it is not open to the appellants before us to raise once again the preliminary objection about the maintainability of the Judge's summons and the expediency of the hearing of such Judge's summons by the Insolvency Court. It is too late in the day to do so.