Hemant M. Nabar And Ors. vs M/S. Farohar And Co. And Ors. on 29 March, 2001
Thus this Court by virtue of the provisions of Section 90, while exercising its jurisdiction under the Act has all the powers of a Court of original civil jurisdiction. In terms of the provisions of Section 151 of the C.P.C. a Court of original civil jurisdiction has inherent powers to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. In terms of the provision of Section 9(2) of the Act, in case an application taken out by the debtor to have an insolvency notice set aside is rejected, the debtor is deemed to have committed an act of insolvency. Now, in such a situation, when the Court finds that the insolvency notice lacks one of the basic requirement of a valid insolvency notice and allowing such a notice to stand would result in adversely affecting the status of the debtor, the Court would be duly-bound to intervene in exercise of its inherent powers in favour of the debtor in order to prevent abuse of the process of the Court and set aside the insolvency notice. An enforceable decree is the foundation of a valid insolvency notice. Therefore, when the Court finds that the decree on which the insolvency notice is based was not enforceable on the date on which the notice was issued as also on the date it was received by the debtor and also when the matter is before the Court; the foundation itself goes and when the foundation goes, the superstructure cannot survive. I find, the learned Single Judges of this Court, in their judgments in Sharad Khanna's case,
in Bijaysingh Mansingh Baid's case and T. R. Rajshekhar's case, have not considered the provisions of Article 372 of the Constitution. I also do not find any discussion as to why the provisions of Section 9(2) to Section 9(5) of the Act and Rule 52-B are found to be inconsistent. Similarly, the provisions of Article 215 of the Constitution and Section 90 of the Act have also not been considered. In my opinion, these provisions of the Constitution, the Act and the C.P.C. are relevant for deciding the question which have been decided by those decisions. I find myself in respectful disagreement with the view of the learned Judges, for the reasons that I have detailed above. In my opinion, therefore, the insolvency notice has to be set aside. However, I do not propose to pass final order on the notice of motion. In my opinion, the proper course would be for a Larger Bench to consider the above issue, then to pass final order on the motion, in the light of the view that is taken by the Larger Bench.