Bombay High Court
State Bank Of India vs Sohanlal Babulal Jain on 19 July, 1996
Equivalent citations: AIR1997BOM34, 1997(1)BOMCR88, 1996(2)MHLJ647, AIR 1997 BOMBAY 34, (1996) 4 ALLMR 85 (BOM), 1996 (4) ALL MR 85, (1996) 2 MAH LJ 647, (1997) 1 MAHLR 716, (1998) 1 BANKCAS 438, (1996) BANKJ 698, (1997) 1 BOM CR 88
ORDER M. S. Rane, J.
1. The appellants-State Bank of India are decree-holder and as a result of non-compliance of the decree in their favour, they initiated action against the judgment-debtor under the provisions of Presidency-Town Insolvency Act, 1909 (hereinafter referred to as the said "Act") and as a step therein, the Court issued a notice to the judgment-debtor under the povisions of the said Act. The notice in question which the appellants got issued, there was a misdescription of the judgment-debtor. This aspect was highlighted and focused by the judgment-debtor before the Insolvency court and the judgment-debtor objected that the process issued against him was illegal by moving an application by way of Notice of Motion. The Insolvency court which heard the said-application of the judgment-debtor found favor with the objection raised by and on behalf of the judgment-debtor and struck down the Insolvency Notice by judgment dated 4th October 1994 which is impugned in this appeal.
2. We have heard the learned counsel for the appellant and perused the impugned judgment of this appeal and also the other related record being part of this appeal paper book.
3. The correct name of the judgment-debtor is "Sohanlal Chunilal Jain". However, in the Insolvency Notice which the appellants got issued, the judgment-debtor was described as "Sohanlal Babulal Jain". It would thus be noticed that the name of the father of the judgment-debtor was wrongly mentioned.
4. It appears that the appellants sought rectify the mistake in the name by moving separate application. However, the Insolvency Court did not entertain the said application noting that the court cannot take cognizance thereon.
5. Mr. Shah, learned counsel appearing for the appellants submitted that the Insolvency Court ought to have allowed the application of the appellants for the amendment of the name of the judgment-debtor. He submits that such amendment can be permissible and should have been allowed.
6. On careful consideration of the submissions advanced across the bar and on going through the inpugned judgment of this appeal, we do not find any reason to take a different view that what the Insolvency Court has taken.
7. The insolvency proceedings are of a quasi penal nature. The same invite serious consequences. If any one is adjudged as insolvent then he suffers a social death as such. It adversely affects his status/reputation in the society. That being the position, there are elaborate and meticulous provisions made in the said Presidency Town Insolvency Act and the rules made thereunder. The manner in which the processes are to be issued and served, have been clearly provided therein. It is therefore imperative that the provisions of law in such proceedings are strictly adhered to and complied with.
8. It has been held by the Division Bench of this Court in the case of Shapurji Ruttonji v. Byramji Muncherju, reported in AIR 1945 Bom 165 that the proceedings adopted under the provisions of the Insolvency Act have quasi penal consequences and, therefore, they should be construed strictly and the judgment-debtor would be entitled to raise all technical pleas in defence of such processes. In the said decision the character and capacity of the addressee of the insolvency notice was not spelt out although his name was correctly mentioned. Yet the Division Bench annulled the notice.
9. It, therefore, clearly, emerges that the proceedings before the Insolvency Court are of a distinct and special type and the same cannot be generally equated and compared with other proceedings in suits. The insolvency Act itself provides for the service of proper notices in a prescribed from. Even if there is a slightest lacuna in compliance with issuance of such processes, the Court has to extend benefit in favour of the addressee of such processes.
10. Coming to the present case, it is noticed that the notice in question has been wrongly addressed and got issued to a wrong person by name Sohanlal Babulal Jain when the correct name of the judgment-debtor is Sohanlal Chunilal Jain. such a mistake cannot be termed as clerical error as such. It gives impression that it is altogether a different person whom such notice is addressed. It is a material defect in the notice and not a formal one. This being the position, in the first instance, the process issued by the appellants under the Insolvency Act was being in the name of wrong person other than the judgment-debtor was not sustainable. In our view, the Insolvency Court was, therefore, right and justified in striking down the said notice.
11. The next question is whether the application of the appellants for amendment of the notice by describing the correct name of the judgment-debtor should have been considered and allowed by the Insolvency Court or not. We clarify that we do not propose of examine whether the amendment can be permissible or not in the insolvency proceedings. We, however, make it clear that even assuming that such course by way of amendment is permissible and available in the proceedings under the Insolvency Act, the kind of amendment that was sought by the appellants could have been considered and granted.
12. In the view of the matter, we hold that there is no merit in the appeal and consequently the same stands dismissed and the order impugned in this appeal stands confirmed. No order as to costs.
Appeal dismissed