- (1.) This is an appeal by a certificate against a judgment of a Division Bench of the High Court at Chandigarh in Letters Patent Appeal No. 212 of 1961. The High Court allowed the appeal on the ground that the application out of which it arose was incompetent as barred by limitation and, in our opinion, it did so correctly. The short question before us is, whether the application leading to this appeal was one under S. 68 of the Provincial Insolvency Act, and as such having been made beyond the period of 21 days from the date of the act of the receiver complained of, was covered by the proviso to that section ? In substance, the argument on behalf of the appellant was that the application was one under S. 4 of the Act in which there is no mention of any period of limitation.
(2.) The facts necessary for the disposal of this appeal are as follows:- Brijlal and Hans Raj were two brothers. On an application having been made by the creditors of Brij Lal in the year 1949, the insolvency Judge, Barnala adjudicated him as an insolvent, on 23rd November 1954. Two day thereafter, one Mohinder Lal was appointed as a receiver in insolvency by the order of the Court and he was directed to take possession of the property of the insolvent. On 26th and 27th November 1954 the receiver took possession of various properties of the insolvent and attached some urban property and agricultural land which are the subject-matter of the present litigation Hans Raj filed an objection application on 21st December 1954 alleging that the property detailed therein belonged to him and was exclusively in his possession. He prayed for release of the property from attachment and restoration of possession to him. The receiver pleaded that he had taken possession thereafter at the instance of two creditors. The insolvency Judge framed two issues namely, (1) Is the objector owner of the suit property and in possession thereof and is it accordingly not liable to be attached by the receiver? and (2) whether the objection petition was time-barred ? The learned Judge decided the first issue against the objector but held that the application was not covered by S. 68 of the Act. In appeal, the District Judge differed from both the findings. He held that there had been no partition of the joint Hindu family of the insolvent and his brother, but, on the point of limitation he found against the objector. In the result, he accepted the appeal and dismissed the objection petition. Hans Raj: went up in Second Appeal to the Punjab High Court. The learned single Judge of the High Court came to the conclusion that the property in dispute must be deemed to be the separate property of Hans Raj and held that the application was within time. Rattan Lal who replaced the original receiver on the latter's death filed a Letters Patent Appeal to the High Court. The High Court, as already noted, held that the application of Hans Raj was not within time resulting in the dismissal of the objection petition.
(3.) We must first consider the nature of the application made by the objector and then find out whether it is covered by S. 68 of the Act. Section 4 of the Act on which great reliance was placed by learned counsel for the appellant is one of the three sections in Part I of the Act, i.e., Ss. 3, 4 and 5. Section 3 lays down that the District Courts shall be the Courts having jurisdiction under the Act. Section 4 defines the Jurisdiction of the Court and runs as follows : "(1) Subject to the provisions of this Act, the Court shall have full power to decide all questions whether of title or priority, or of any nature whatsoever, and whether involving matters of law or of fact, which may arise in any case of insolvency coming within the cognizance of the Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case. (2) Subject to the provisions of this Act and notwithstanding anything contained in any other 1aw for the time being in force, every such decision shall be final and binding for all purposes as between, on the one hand, the debtor and the debtor's estate and, on the other hand, all claimants against him or it and all persons claiming through or under them or any of them. (3) Where the Court does not deem it expedient or necessary to decide any question of the nature referred to in sub-s. (1), but has reason to believe that the debtor has a saleable interest in any property, the Court may without further inquiry sell such interest in such manner and subject to such conditions as it may think fit." Section 5 lays down the general powers of Courts under the Act. Part II which has the heading "Proceedings from the act of insolvency to discharge" deals generally with the course of the proceedings in insolvency beginning from the acts of insolvency to the order for discharge of insolvency. Part III is headed "administration of property" and deals with, different subjects like method of proof of debts, effect of insolvency on antecedent transactions, realisation of property, distribution of property" and lastly "appeals to Court against receiver". The last topic is covered by S. 68 which provides as follows:- "If the insolvent or any of the creditors or any other person is aggrieved by any act or decision of the receiver, he may apply to the Court, and the Court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just: Provided that no application under this section shall be entertained after the expiration of twenty-one days from the date of the act or decision complained of." Part IV deals with penalties, Part V with summary administration, Part VI with appeals and Part VII with topics like costs, power to make rules, etc.;