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Issues: (i) Whether the appeal was barred by time under Section 73 of the Indian Insolvency Act, 1848. (ii) Whether the sum deposited as security was to be treated as creating a debtor-creditor relationship between the firm and the depositor.
Issue (i): Whether the appeal was barred by time under Section 73 of the Indian Insolvency Act, 1848.
Analysis: The appeal was filed on the reopening day after the vacation. The cited authorities had treated such filing as within time, and there was no reason to depart from that settled view.
Conclusion: The appeal was held to be in time, against the respondent.
Issue (ii): Whether the sum deposited as security was to be treated as creating a debtor-creditor relationship between the firm and the depositor.
Analysis: The money was deposited in the firm's usual course of dealing and was placed in fixed deposit as security money. In the absence of proof that the depositor was unaware of or objected to that practice, the proper inference was that the money was dealt with with his assent, bringing the case within the principle that a debtor-creditor relationship arises in such circumstances.
Conclusion: The security deposit was held to have created a debtor-creditor relationship, in favour of the appellant.
Final Conclusion: The appeal succeeded and the petition was dismissed with costs.
Ratio Decidendi: Where security money is deposited in accordance with the usual practice and with the depositor's assent, the firm or bank holds it as a debtor, and the depositor becomes a creditor for that amount.
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