Patel, J. - (1.) THE matter has been referred to a Division Bench as it involves an important question of the practice and procedure followed in the Insolvency Court.
(2.) THE facts are few and may shortly be stated. On the petition by B.R. Herman and Mohatta (India) Private Ltd., the applicant before us, Khushalchand B. Daga, was adjudicated insolvent on July 6, 1960. On September 2, 1960, the insolvent took out a notice of motion for annulment of the adjudication. Apparently, the notice of motion is yet not disposed of but, the insolvency proceedings were stayed by the Court. The Punjab National Bank Ltd., who is the opponent before us, made a claim against the insolvent in the sum of Rs. 58,56,000 on the basis of guarantee furnished by Mm against a loan to Model Mills. The bank also accepted that it held security of debentures of the Model Mills of the face value of Its. 22,25,000. Before the applicant was adjudicated insolvent, on October 4, 1958, a petition for winding up of the Model Mills was filed. On July 7, 1959, the Government appointed the Authorised Controller by a notification and on July 28, 1962, the Company Court sanctioned a Scheme framed by him. This Scheme was supported by the Bank. The Bank it seems agreed to accept the debt due to it after deducting the value of the debentures which it held, that is Rs. 38,31,000, to be paid by 25 per cent, in cash and the balance of 75 per cent, in five yearly installments secured by fresh debentures. On March 27, 1962, the bank filed proof of the present claim and desired that the same should be admitted by the Official Assignee, so that its claim against the insolvent may not be barred by time. The Insolvency Court permitted the same, and an appeal against its judgment has failed. Consequent upon this order, the Official Assignee started investigation of the claim. For this purpose, he examined Kidar Nath Suri, Manager of the Bank, after issuing a notice to the insolvent. After the proceedings had gone on for some time, a preliminary objection was raised on behalf of the insolvent that the Official Assignee had no jurisdiction to investigate the claim as tribunal by recording evidence of witnesses, by relying on the decision in Sooniram Ramniranjandass v. : (1938)40BOMLR1236 . The Official Assignee ruled otherwise and proposed to proceed with the investigation. The insolvent took out a notice of motion questioning the decision of the Official Assignee which came up for hearing before our brother Tarkunde J. on March 16, 1965, and he directed that as the matter involved an important question it should be heard by a Division Bench. It has now accordingly been placed before us.
(3.) THE answer to the question in issue depends upon the relevant provisions of the Presidency -towns Insolvency Act, 1909. In the Act, there is a clear distinction between the Insolvency Court and the Official Assignee, the Court, being this High Court, Section 6 enables the Chief Justice to delegate some of the functions which the Court is entitled to perform to a subordinate officer of the Court, and the decision or order of such officer is deemed to be that of the Court. Section 8 deals with review and appeals. Sub -section (2) provides for an appeal against the order of a subordinate officer who is delegated the functions of the Court, to the Insolvency Judge and a further appeal, by his leave, to a Bench; and Clause (b) provides for an appeal against the decision of the Insolvency Judge without his leave. Section 7 vests in the Court the fullest power to determine all questions, whether of priority or otherwise, whether of law or facts, for the purpose of doing full justice or making complete distribution of property in any case. With the limitation, we are not concerned. Consistently with the purpose of the Insolvency Act, immediately on the order of adjudication, it vests the property of the insolvent in the Official Assignee by Section 17 -but it vests in him for the sole purpose of its becoming divisible amongst his creditors.;