IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 25TH AUGUST 2009 / 3RD BHADRA 1931 MFA.No. 156 of 2009() --------------------- IP.2/2004 of SUB COURT, MUVATTUPUZHA .................... APPELLANTS: PETITIONER ------------------------ RAHJAN MATHAI, S/O.LATE A.P.MATHAI, AGED 57 YEARS,ALACKAL HOUSE,THRIKKALTHUR, MULAVOOR VILLAGE,(NOW RESIDING AT HOUSE NO.107, WARD NO.X,FIRST MILE,PERUMBAVOOR,ERNAKULAM DIST. BY ADV. SRI.RENNY AUGUSTINE RESPONDENTS: RESPONDENTS -------------------------- 1. STATE OF KERALA,REP.BY DISTRICT COLLECTOR,ERNAKULAM,KAKKANAD. 2. ADDITIONAL SALE TAX OFFICER-2, MUVATTUPUZHA. 3. BABU MATHEW,S/O.LATE A.P.MATHAI, AGED ABOUT 53 YEARS,ALACKAL HOUSE, THRIKKALATHUR,MULAVOOR VILLAGE, MUVATTUPUZHA TALUK. 4. C.G.VENUGOPAL,AGED ABOUT 55 YEARS, S/O.GOVINDA PILLAI,HOUSE NO.144, WARD NO.X,KONNAMKUDY ROAD,PERUMBAVOOR. 5. THE FEDERAL BANK LTD.,KEEZHILLAM BRANCH, REP.BY ITS MANAGER. GOVERNMENT PLEADER, SHRI.K.P. PRADEEP FOR R1 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 25/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. M. JOSEPH & M.L. JOSEPH FRANCIS, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - M..F.A.No. 156 of 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 25th day of August, 2009 JUDGMENT Joseph, J. This is an appeal purported to be filed under Section 79 of the Insolvency Act. The appellant was the petitioner in I.P.No. 2 of 2004 on the file of the Sub Court, Muvattupuzha. The prayer in the said petition was to declare the petitioner as insolvent and distribute the assets to the creditors. The petition has been dismissed. 2. When this appeal came up for hearing, we directed notice to be served on the learned Government Pleader in view of the presence of State of Kerala and Additional Sales Tax Officer in the party array. 3. The learned Government Pleader, Shri.K.P. Pradeep, would point out that the appeal is not maintainable M..F.A.No. 156 of 2009 2 before the High Court. In support of his contention he relied on the judgment of the learned Single Judge of this Court in Narayana Panicker v. Kunju Pennu & ors. (1978 KLT 311). Therein also the appeals were filed against the orders of the Sub Court in insolvency proceedings. In that case the Court held that: “Any Court on whom insolvency jurisdiction is competently conferred by a notification issued under the proviso to S.3 of the Act, is, for the purpose of exercising jurisdiction under the Act, a Court subordinate to a District Court. If so, under S.79(1), appeals from orders passed by a Sub Court lie to the District Court to which that Sub Court is subordinate in matters of insolvency jurisdiction, and not to the High Court. The District Court, to which a Court (on whom insolvency jurisdiction is competently conferred by Government), would be subordinate, is that District Court which but for a gazette notification under the proviso, would have dealt with M..F.A.No. 156 of 2009 3 the insolvency case in question. Since S.13 of the Kerala Civil Courts Act, 1957, will be attracted only to a decree or order in a suit and the word 'suit' mentioned in S.13 has to be understood as a proceeding 'instituted by the presentation of a plaint or in such other manner as may be prescribed' there can be no scope to invoke that section (S.13) to insolvency proceedings. Therefore, it follows that the appeal from orders in insolvency proceedings is not to depend upon valuation of total amount of debts scheduled to the insolvency petition. S.12 of the Kerala Civil Courts Act, 1957 does not refer to any valuation. The total value of debts scheduled to the insolvency petition has no bearing so far as the forum of appeal is concerned. S.79 of the insolvency Act is exhaustive as regards right of appeal, forum of appeal, the subject of appeal and the period of limitation within which the appeal is to be preferred. Therefore these appeals are to be filed before the concerned District Court.” M..F.A.No. 156 of 2009 4 4. It is also important to note that the court held that the total value of debts scheduled to the insolvency petition has no bearing so far as the forum of appeal is concerned. 5. After having perused the judgment, we are of the view that exposition of law made by the learned Single Judge represents the correct position of law. When the subordinate court is notified under the Insolvency Act to exercise powers under the Insolvency Act, it is still a court subordinate to the District Court. Under Section 79 of the Insolvency Act, the appeal would be maintainable to the High Court only from the order passed by the District Court. When the subordinate court exercises powers, it is the order passed by the subordinate court and it cannot be treated as an order of the District court. Hence the appeal would lie before the District Court. In the light of this, we hold that the appeal is not entertainable in this Court and it is to be preferred before the concerned District Court, to which the M..F.A.No. 156 of 2009 5 subordinate court which passed the concerned order is subordinate. 6. We direct that the Memorandum of Appeal be returned to the appellant for presentation before the appropriate court. (K. M. JOSEPH) Judge (M.L. JOSEPH FRANCIS) Judge tm