1970 (4) TMI 81

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...., in Suit No. 457 of 1917 ; while the other, relating to the period from October, 1947, to June, 1949, was a fresh claim that had not been the subject of any judicial decision. The Jwala Bank Limited had taken a certain house on rent from Misri Lal Raidani and his sons in the year 1934: but subsequently in 1935 Misri Lal Raidani and his sons executed a usufructuary mortgage in favour of the Jwala Bank Limited in respect of various properties including this same house. As already noted, a decree was obtained against the bank for the rent from October, 1942, to September, 1947, from the court of the Munsif of Mirzapur on March 28, 1949. But a subsequent suit filed in 1950 for the arrears that had accrued from October, 1947, onwards was fru....

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....tly been disallowed by the official liquidator. Learned counsel, appearing for Gyan Chand Raidani, maintains that the claim relating to the rent accruing from October, 1942, upto September, 1947, stands on a different footing, since it is based on the decree already passed by the Munsif of Mirzapur on March 28, 1949, in Suit No. 457 of 1947 and is not affected by the decision in Special Appeal No. 430 of 1955. It is pointed out that the Munsif's decree was allowed to become final, no appeal having been filed against it either by the company or by the official liquidator after he took charge of the company's affairs, and, consequently, it is urged, that that decree must be treated as completely binding not only on the company but also on ....

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.... in 1949 : that suit was decreed ex parte, the defence of the bank having been struck off because the bank failed to pay certain costs that were awarded for an adjournment. In these circumstances the official liquidator claims that he is fully entitled to go behind the decree and determine whether it was justified. The principle governing such case has been enunciated by Sir W. M. James L. J. in Ex parte Kibble: In re Onslow [1875] 10 Ch. App. 373 as follows : "It is the settled rule of the court of bankruptcy, on which we have always acted, that the court of bankruptcy can inquire into the consideration for a judgment debt. There are obviously strong reasons for this because the object of the bankruptcy laws is to procure the distributi....