- (1.)THIS is an, appeal by an Insolvent who was adjudicated as such by Mr. Justice Desai, and the few facts which are to be appreciated in order to understand the contention put forward by Mr. Bhabha are these. An 'ex parte' decree was passed against, the appellant in favour of the respondents on 12-7-1952. On 10-3-1954, the respondents took out an insolvency notice which was founded on this judgment debt. On 5-5-1954, the appellant took out a notice of motion to set aside the insolvency notice. That motion was dismissed by the Insolvency Judge on 8-12-1954. The appellant preferred an appeal to this Court on 10-12-1954, and that appeal was dismissed on 18-3-1955. On 28-3-1955, the respondents presented a petition for adjudicating the appellant insolvent and this petition was founded on the act of insolvency committed by the appellant in not complying with the insolvency notice. On this petition the learned Judge made the order of adjudication on 19-7-1955, and that is the order which is being challenged in appeal, and the very short point that arises is whether the petition is presented within three months from the commission of the act of insolvency. In order that the petition should be well founded it must be presented within three months from an act of insolvency, and it is not disputed that If the petition is not so presented, then it is bad and the order of adjudication made thereon cannot stand.
(2.)NOW, in the insolvency notice which was Issued by the Insolvency Registrar, time was fixed within which the appellant had to comply with the notice and that time was 35 days from the date of the notice. When the appellant took out a notice of motion on 5-5-1954, to set aside the insolvency notice, that time became automatically extended by reason of the Rules framed by us under the Insolvency Act, and the Question is to what point of time the time was extended by which the appellant could comply with the insolvency notice. The result of the taking out of a notice of motion to set aside the insolvency notice is dealt with in Rule 52-C and the rule is to the following effect :
"an application to set aside the insolvency notice, shall be made by a Notice of motion, and if the application cannot be heard until after the expiry of the time specified in the notice as the day on which the act of insolvency will be complete the Insolvency Registrar shall extend the time arid no act of insolvency shall be deemed to have been committed under the notice until the application shall be heard and determined. "
Therefore, the rule and the reason for the rule are clear. If an application to set aside an insolvency notice is heard, within the time fixed for compliance in the insolvency notice, no question of extension of time arises, but if as a result of the exigencies of work in the Court the Insolvency Judge cannot dispose of the application within that time, then the insolvent is not to Buffer, and the Registrar has been given the discretion to extend the time till the notice of motion is heard and finally determined. In this case the Insolvency Registrar on 5-5-1954, made an order to the effect that the debtor having filed a notice of motion returnable on 1-6-1954, for an order setting aside the insolvency notice issued herein on April 9, 1954, it is ordered that the time specified in the notice as the 'day on which the act of insolvency will be complete be and the same is hereby extended to until the said notice of motion has been heard and determined; and what we have to decide in this appeal is as to when the notice of motion taken out by the appellant was heard and determined, because it was up to that point of time that the appellant was given the right to comply with the insolvency notice and on his failure to do so he would commit an act of insolvency.
(3.)NOW, what was urged by the respondents --and the argument found favour with the learned judge--was that the notice of motion was not heard and determined till 18-3-1955, when the Court of appeal dismissed the appeal of the appellant. On the other hand, the contention of the appellant is that the notice of motion was heard and finally determined on 8-12-1954, when the Insolvency Judge dismissed the motion. Now, if the appellant is right, then the petition which was presented on 28-3-1955, is clearly beyond three months. If, on the other hand, the view of the learned Judge is correct and the material date is 18-3-1955, then the petition is within time.