FRAMROZE MERWANJI DESAI Vs. HORMASJI MANECKJI

JUDGEMENT

(1.) In this case the judgment-creditors took out and served upon the judgment-debtor an insolvency notice in respect of the claim which they have had against him by virtue of a decree for Rs. 41,406-8-0 and interest of tained by them on June 18, 1945. The judgment-debtor has filed an affidavit before me stating that he has a counter-claim which exceeds the amount claimed by the judgment-creditors in respect of the decree and which he could not set up in the suit in which the decree was obtained, and claims that the insolvency notice be set aside.

(2.) The suit which was filed by the judgment-creditors was a summary suit. When the summons for judgment came on for hearing before Mr. Justice Blagden, the learned Judge refused leave to defend the suit and passed the decree for the amount mentioned above on June 18, 1945. The judgment-debtor appealed from this decree of Mr. Justice Blagden. The appeal was heard by the learned Chief Justice and Mr. Justice Chagla on November 8, 1945, and by an order made on that day by the Appeal Court, the judgment-debtor was ordered to deposit in Court Rs. 20,000 as security for the claim of the judgment-creditors in suit on or before December 6, 1945, and on such deposit being made, he was granted leave to defend the suit, and the decree was to be set aside. The judgment-debtor was also by the said order directed to Hie his written statement and counter-claim on or before December 10, 1945. There was an order, in default, that the appeal would stand dismissed if no such deposit was made by the judgment-debtor by, December 10, 1945. The judgment-debtor failed to deposit the amount, and the appeal stood dismissed. The judgment-debtor filed an application for review of the order of November 8, 1945, and that application was also dismissed by the learned Chief Justice and Mr. Justice Lokur on January 28, 1946. It may be observed that in the affidavit which he made on the summons for judgment, the same allegations had been made by way of defence to the suit and for the purpose of counter-claim which he proposed to file if leave to defend was granted to him, as have been;made in the affidavit which he has now filed before me.

(3.) The question that arises for my consideration is whether the judgment-debtor has a counter-claim which equals or exceeds the amount claimed by the judgment-creditors in respect of the decree and which he could not set up in the suit in which the decree was obtained. This is an insolvency notice and it must be strictly construed, if necessary, in favour of the judgment-debtor. The result of the proceedings is that if the insolvency notice is not set aside, the judgment-debtor would be adjudged to have committed an act of insolvency, and before this result which seriously affects his status is achieved, all the requirements of law should be very strictly complied with. I have to view the facts of this particular case in the light of the above observations and have got to be satisfied that under the circumstances stated by the judgment-debtor in his affidavit, he has a counter-claim which equals or exceeds the amount claimed by the judgment-creditors in respect of the decree and which he could not set up in the suit in which the decree was obtained.