BHURMAL KAPURCHAUD AND CO Vs. PREMIER MACHINE TOOLS CO

JUDGEMENT

(1.) In this matter which has come up for directions before me, the judgment-creditors put in issue the practice adopted by the Insolvency Registrar with regard to issuance of insolvency notice founded on a decree which is more than two years old. The Insolvency Registrar insisted that before an insolvency notice could be issued, in respect of a judgment-debt under a decree which was more than two years old and thus required compliance with the provisions of O.21, R.22 of the Code of Civil Procedure proceeding in that behalf must be adopted and the said notice made absolute by the competent court. This practice has been prevalent in this court for last several years. This practice is assailed on the ground that it is contrary to the provisions of law or is otherwise unreasonable.

(2.) On 1st August 1974 a decree was passed in favour of the judgment-creditors by the City Civil Court, Bombay, in Summary Suit No.3778 of 1974 against M/s. Premier Machine Tools Co., the Judgment-debtors. On 26th April 1976 the judgment-creditors made an application to the Insolvency Registrar for issuing an insolvency notice contemplated by S.9-A of the Presidency Towns Insolvency Act (hereinafter referred to as "the Act"). The said application was processed by the office of the Insolvency Registrar. The draft of the notice which was submitted by the attorneys of the judgment-creditors was approved by the office of the insolvency Registrar and sent back to the attorney. The said insolvency notice was then duly engrossed and submitted again to the office of the Insolvency Registrar for being sealed. The time which was taken in this process rendered the decree passed on 1st August 1974 more than 2 years old and thus required leave of the court for execution under O.21 R.22 of the Code of Civil Procedure. Upon the said query being raised or the requisition being made in that behalf by the office of the Insolvency Registrar, the attorneys for the Judgment-creditors by their precipe dated 16th August 1976 raised objections that the said query or the requisition was unjustified. By the said precipe the attorneys required the Insolvency Registrar to place the matter before me for directions. The said precipe along with a comprehensive and a well-considered note prepared by the Insolvency Registrar, was submitted to me. I directed that the matter be placed on Board for determination of the issues involved therein.

(3.) In the precipe of the attorneys of the judgment-creditors it is contended that the Insolvency proceedings are not execution proceedings; that the only requirements which have to be fulfilled before an insolvency notice could be issued are those postulated by the relevant provisions of the Presidency Towns Insolvency Act (hereinafter referred as "the Act'") and the rules of this court relating thereto, viz., debt not being barred and the execution of the decree not being stayed; that the purpose of O.21, R.22 of the Code of Civil Procedure was merely to prevent a surprise being sprung upon a judgment-debtor and further the judgment-debtor has an opportunity to show cause against an insolvency notice and to have it set aside on the ground available to him under the provisions of the said Act and the said Rules. In light of these assertions the contention of the judgment-creditors in the said precipe is that the practice adopted by the Insolvery Registrar is not only without sanction of law but is contrary thereto.