- (1.) THE applicant presented an insolvency petition before the District Judge, Ghaziabad, acting as insolvency Judge. Opposite parties 1 to 4 were shown in the said petition as the creditors of the applicant. It appears that Azampur Dahpa Sadhan Sahkari Samiti, opposite party No. 1. which was one of the creditors, was proceeding to realise a sum of Rs. 32,287. 40 from the applicant. Along with the insolvency petition the applicant also filed an application for injunction restraining opposite party No. 1 from realising the aforesaid sum. THE District Judge passed an order on 30th July, 1979, on the said application restraining opposite party No. 1 from realising the aforesaid sum provided the applicant furnished security for the said amount within a week. It was also mentioned in that order that the injunction order shall go only if the security was filed. Notices were also directed to be issued to the creditors to show cause. THE present revision has been filed against this order dated 30th July, 1979.
(2.) IT has been urged by counsel for the applicant that once an insolvency petition has been filed the District Judge could have while admitting the said petition either appointed an interim receiver under Section 20 of the Provincial Insolvency Act (hereinafter referred to as the Act) or the properties of the applicant could be attached by actual seizure under Section 21 (2) of the Act in case any of the requirements of the proviso to sub-sections (2) and (3) was made out. According to counsel for the applicant it was not open to the District Judge to require the applicant to furnish security. Having considered the matter I am of opinion that there is substance in the submission made by counsel for the applicant. One of the main purposes of the Insolvency Act is to ensure that one of the several creditors was not given undue preference. That purpose can be served only if either an interim Receiver is appointed under Section 20 of the Act or the properties of the debtor are attached by actual seizure under Section 21 (2) of the Act. Take for instance the present case itself. Suppose the applicant in pursuance of the order of the District Judge did not furnish security the order of injunction will not be operative and apparently there will be nothing to stop opposite party No. 1 from getting the properties of the applicant debtor sold in realisation of the amount due to it. In that event the other creditors will apparently be prejudiced even if ultimately the insolvency petition is allowed and the debtor is adjudged an insolvent. The power conferred by Sections 20 and 21 (2) of the Insolvency Act is apparently to ensure that the effect of an order of adjudication as contemplated by Section 28 of the Act is not frustrated. In other words by passing an interim order as contemplated by Sections 20 and 21 (2) of the Act the insolvency court has to ensure that the properties of the debtor remain available for being dealt with in accordance with the provisions of the Act in the event of the debtor being adjudged insolvent. In the result the revision succeeds and is allowed and the order dated 30th July, 1979, insofar as it directs the applicant to furnish security, passed by the District Judge, Ghaziabad, is set aside. It is, however, made clear that it would be open to the District Judge to pass suitable orders under Section 20 or 21 (2) of the Act, as the case may be, to ensure that the properties of the debtor-applicant remain intact for being dealt with in accordance with the provisions of the Act in the event of the applicant being adjudged insolvent and also to ensure that under the protection of the order of injunction the debtor-applicant may not be in a position to deal with the property or to enjoy its usufruct to the detriment of the creditors. Since no one has appeared to oppose this revision there shall be no order as to costs. Revision allowed. .;