ADVERTISEMENT
Bombay High Court
Kishoredas Shamjibhai Mehta vs Harshad Harilal Choksi on 6 July, 2026
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Before: Mrs. Chandan J. Bhatt,
Official Assignee, High Court of Bombay
Date: 6th July, 2026 at 12.30 p.m.
Re: Harshad Harilal Choksi (Deceased)
Insolvency Petition No.18 of 2007
Date of Act of Insolvency.... 23.12.2006
Date of Petition.. .... 22.02.2007
Date of Order of Adjn. .... 16.06.2009
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Insolvent: Since Deceased
Legal Heirs of the Insolvent: None present
Advocate for the Legal heirs of the Deceased Insolvent: Shri Gaurang Mehta a/w
Ms. Hiteishi Sharma and Mr. Tarun Shroff i/by Mr. Ameya Mahajan
Petitioning Creditor: Since Deceased
Advocate for the Legal Heirs of the Deceased Petitioning Creditor: Ms. Ayushi
Haran i/b. M/s. Markand Gandhi & Co.
Advocate for the Claimant: Shri Anjal Amin i/b. M/s. B. Amin & Co.
1. This matter is placed for adjudication of claims as per Affidavit of
proof of Debts filed by the Claimant M/s. Kirtanlal & Sons.
2. I have perused proceedings, Affidavit of Proof of Debt, Reply,
Rejoinder, Sur-Rejoinder, Supplementary Affidavit filed by both the parties
Claimants as well as Legal Heirs of the Insolvent, I have even recorded evidence in
the form of statement of both the Partners of the Claimants viz. Mr. Rajen Kirtanlal
Shah and Mrs. Darshana Rajen Shah and also of Himanshu Harshad Choksi, one of
the Legal Heir of the Deceased Insolvent. I have heard Learned Advocate of both
the sides at length and reserved order in the matter of Adjudication of Claim of the
said Claimants.
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3. Pending the order, Himanshu Harshad Choksi, one of the legal heir of
the deceased Insolvent has filed application for Issuance of Witness Summons
under Rule 25 of the Second Schedule of Presidency Towns Insolvency Act, 1909
praying to take necessary steps to summon Mr. Ulhas Vitthaldas Pandya for
recording his evidence and witness summons may be issued to Mr. Ulhas
Vitthaldas Pandya.
FACTS OF THE CASE;-
In brief, the facts of the case are as under :
4. Harshad Harilal Choksi, Deceased Insolvent has been adjudicated as
Insolvent on 16th June, 2009 in the Insolvency Petition No. 18 of 2007 filed by the
Petitioning Creditor viz. Kishoredas Shamjibhai Mehta for the act of Insolvency
committed on 23rd December, 2006.
5. Insolvent Harshad H. Choksi expired on 25 th February, 2010 and as
per order of the Hon'ble Court dated 21st June 2011, legal heirs of the deceased
Insolvent were directed to appear before the Official Assignee with directions to
extend full co-operation including the production of documents required by
Official Assignee. The legal heirs of the Insolvents are his wife and two sons. Wife
of Insolvent viz. Sushila Harshad Choksi expired on 14 th December, 2023 leaving
behind her two sons viz. Himanshu Choksi and Shaunak Choksi as her only legal
heirs.
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6. M/s. Kirtanlal & Sons, Sole Proprietor Mr. Rajen Shah, Claimant filed
Affidavit of Proof of debt dated 16th December, 2021 being the sole proprietor of
M/s. Kirtanlal & Sons for adjudication of his claim submitting therein that, he has a
decree against Choksi Tubes and Co. Ltd, Harshad Harilal Choksi(Insolvent),
Himanshu Harshad Choksi and Shaunak Harshad Choksi passed by this Hon'ble
Court on 15th March, 2005 (Coram : D. G. Karnik, J.) directing the aforesaid
persons to pay to him a sum of Rs.28,91,836/- (Rupees Twenty Eight Lakhs Ninety
One Thousand Eight Hundred Thirty Six Only) for debt and a sum of
Rs.2,42,630.13 (Rupees Two Lakhs Forty Two Thousand Six Hundred Thirty and
Thirteen Paise Only) for interest at the rate of 18% p. a. on the principal amount of
Rs.20 lakhs from the date of the filing of the suit i.e. 13 th July, 2004 till date of
decree and sum of Rs.57,411.50 (Rupees Fifty Seven Thousand Four Hundred
Eleven and Fifty Paise only) for cost including Advocate fees quantified at
Rs.9,354/-(Rupees Nine Thousand Three Hundred Fifty Four Only), which the said
debt, interest and cost total aggregating to Rs.31,97,877.63 (Rupees Thirty One
Lakhs Ninety Seven Thousand Eight Hundred Seventy Seven and Paise Sixty
Three Only), and also for further interest at the rate of 18% p.a. on the said
principal amount of Rs.20 lakhs from the next day of the decree i.e. 16 th March,
2005 till payment and realization. Certified copy of the decree is annexed to the
aforesaid affidavit.
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7. At the time of adjudicating the claim of the aforesaid Claimant M/s.
Kirtanlal & Sons, Legal Heirs of the deceased Insolvent viz. Himanshu Harshad
Choksi has raised the contention that the decretal amount has been paid to the
Accountant/Representative of Claimant Mr. Ulhas Pandya and orally requested to
issue witness summons to him, which was not allowed as no application was there
on record. Accordingly, application for Issuance of Witness Summons under Rule
25 of the Second Schedule of Presidency Towns Insolvency Act, 1909 praying to
take necessary steps to summon Mr. Ulhas Pandya for recording his evidence and
for issuing witness summons to Mr. Ulhas Pandya filed by Himanshu Harshad
Choksi, one of the Legal Heir of the deceased Insolvent.
8. The said application is placed before me today for hearing. Mr. Mehta,
Learned Advocate appearing for the Legal Heirs of the Insolvent submits that, it is
the contention of the Choksi's that, the debt under the Decree had been paid and
settled by making payment of Rs.24,00,000/- (Rupees Twenty Four Lakhs Only) in
cash which was handed over to Mr. Ulhas Pandya Accountant/Representative of
the Claimant. And the said amount were paid during the period from November
2007 to May 2008. Learned Advocate for the Claimant Mr. Anjal Amin opposes to
the aforesaid application and submits that, Claimant's deny that he has authorised
Mr. Ulhas Pandya for receiving any amount from the Insolvent's and also deny the
receipt of any such amount from the Legal heirs of the Insolvent during the
aforesaid period.
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9. In context thereof, for deciding the present application of the legal
heirs of the Insolvent for issuance of witness summons under Rule 25 of the
Second Schedule of the PTI Act, following issue arise for decision and
consideration
Issue No. 1 Whether witness summons under Rule 25 of the Second
Schedule of the Presidency Towns Insolvency Act, 1909
on the application of Legal Heirs of the Insolvent who do
not have any documentary proof be issued to
Mr. Ulhas Vitthaldas Pandya, an authorised person of the
Claimant having the decree, who deny the receipt of the
payment?
Issue No. 2 What order?
10. Mr. Mehta, learned Advocate for the legal heirs of the deceased
Insolvent submits that, Insolvent has Debt claimed under the Decree had been
settled and the sum of Rs.24,00,000/- had already been paid to the Claimant and
monies in cash had been handed over to Claimant's Account viz. Ulhas Pandya,
which reflects in the paragraph no. 6 of the Affidavit in reply dated 12 th September,
2022 filed by Himanshu Harshad Choksi legal heir no. 1 of the deceased Insolvent
in response to the proof of debt dated 16 th December, 2022 filed by M/s. Kirtanlal
& Sons, Proprietor Mr. Rajen Shah. And further he refers to payment made to the
Claimant Mr. Rajen Shah between the period from November, 2007 to May 2008
in full and final settlement of all claims of the Claimant against CTCL and it's
Directors including the deceased Insolvent, wherein he has given details of
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instalment made to the Claimant payment of sum aggregating to Rs.24 lakhs. The
said detail is as under :
1. 1 Lakh in early November, 2007
2. 4 Lakhs in November, 2007
3. 5 Lakhs in January, 2008
4. 5 Lakhs in February, 2008
5. 5 Lakhs in April, 2008
6. 4 Lakhs in May 2008
11. In the said affidavit, there is a reference of execution proceedings
initiated before the Commissioner for Taking Accounts for settling the
proclamation of sale of attached Choksi Villa property. The said proceeding was
closed by an order dated 21 st July, 2022 as not maintainable on account of an order
of adjudication passed against the Insolvent.
12. Mr. Mehta further submits that, in the aforesaid affidavit in reply, the
legal heir of deceased Insolvent has referred to the letters of Claimants Advocate
dated 23rd July, 2022 and 5th August, 2022 regarding settlement of dues and debts
paid and settled in May 2008 and requested that as first complaint and second
complaint withdrawn and no reply filed by the Claimant and therefore, it's double
recovery which is unjust and therefore the affidavit of claim to be rejected by
Official Assignee.
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13. It is further stated in affidavit in reply that upon payment of
instalments mentioned above at serial no 1 to 5, totalling to Rs.20,00,000/-(Rs.
Twenty Lakhs Only) by April 2008, the Claimant made an application to the SMM
and Judge of Small Causes Court to withdraw the First Complaint and accordingly
on 29th April, 2008 order came to be passed dismissing the First Complaint as
withdrawn. Thereafter, payment of instalment as referred above of Rs.4,00,000/-
(Rupees Four Lakhs Only) in May 2008, the Claimant made an application to the
Court of Metropolitan Magistrate, Esplanade, Mumbai to withdraw the Second
Complaint by an order dated 21st May, 2008. The said Second Complaint was
allowed to be withdrawn and accordingly upon withdrawal of First complaint and
second complaint before SMM and Metropolitan Magistrate, Esplanade, Mumbai,
in view of the orders disposing off the Criminal Complaints as withdrawn, CTCL
and its Directors were acquitted and discharged of the offences under Section 138
of Negotiable Instruments Act. In view of the payments made as aforesaid, the debt
under the 2005 decree also fully settled and decree satisfied.
14. The aforesaid factual position was controverted by the Claimant by
way of his Affidavit in Rejoinder dated 14 th November, 2022 filed by Claimant
Rajen Shah as a partner of M/s. Kirtanlal & Sons in reply denying the claim of
Himanshu Choksi to reject claim by Official Assignee and also in paragraph 2 of
the said affidavit in rejoinder he has denied repayment of the debt.
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15. Mr. Amin, Advocate for the Claimant submits that, categorically the
Claimants deny having received the amount of Rs.24,00,000/- and requested
monies be handed over to Mr. Ulhas Pandya and in paragraph 3 of the aforesaid
affidavit in rejoinder, the Claimant has referred that both the complaints filed for
dishonour of 2 (two) different cheques, first of Rs.20,00,000/- (Rupees Twenty
Lakhs only) (Principal Amount) and Rs.1,34,137/- (Rupees One Lakh Thirty Four
Thousand One Hundred and Thirty Seven Only) (Interest). Second Complaint for
dishonour cheque of Rs.19,32,000/-(Rupees Nineteen Lakhs Thirty Two thousand
only) for Commission charged by the Claimant and therefore it is factually
incorrect to claim that both the Complaints were filed for dishonor of cheques of
Rs.20,00,000/- (Rupees Twenty Lakhs Only) and Rs.1,34,137/- (One Lakh Thirty
Four Thousand One Hundred Thirty Seven Only). Claimant has further submitted
that both the Complaints have different facts and cause of action and have nothing
to do with each other and are different. Summary Suit No. 2268 of 2004 filed for
recovery of Rs.20,00,000/-(Rupees Twenty Lakhs Only) with interest and nothing
to do with each other and are different. On 15 th March, 2005 ex-parte decree was
passed in Summary Suit No. 2268 of 2004 for recovery of Rs.20,00,000/- (Rupees
Twenty Lakhs only) with interest.
16. In paragraph 5 of the said affidavit in rejoinder claimant has denied
the payment of Rs.24,00,000/-(Rupees Twenty Four Lakhs Only) paid between the
period of November 2007 to May 2008 in full and final settlement of all claims
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against CTCL and its Directors including deceased Insolvent and had denied the
receipt of payment of said amount as set out in paragraph 6 of the Affidavit in reply
of legal heirs of the deceased Insolvent dated 12 th September, 2022. The Claimant
has further submitted that as regards Criminal Complaint No. 1687/SS/2005 (First
Complaint) was withdrawn on 29th April, 2008 vide Application and Consent
Terms filed for withdrawal of the said Complaint. The Consent Terms were signed
between the parties, which are on record. The said Consent Terms agreed upon
between the parties was entered into with an understanding that Execution
Application No. 92 of 2006 will be expedited and based on said assurance, the
application for withdrawal of the Complaint no. 1687/SS/2005 was filed and for
the said reason Complainant has denied receipt of Rs.2,00,000/- (Rupees Two
Lakhs Only). Complainant has annexed the copy of the order alongwith consent
terms at Exhibit 'A' to the said affidavit.
17. Complainant has even denied receipt of Rs.2,00,000/- (Rupees Two
Lakhs Only) in May 2008 and submits that Complaint No. 2005/SS/2005 was
settled for Rs.2,00,000/- (Rupees Two Lakhs Only) by Pay Order forwarded vide
letter dated 3rd April, 2008 issued by deceased Insolvent, Himanshu Choksi and
Shaunak Choksi. The said amount of Rs.2,00,000/- (Rupees Two Lakhs Only)
credited to the account of Claimant and therefore Claimant has withdrawn the said
Second Complaint. Claimant has even annexed the copy of letter dated 3 rd April,
2008 issued by the legal heirs of deceased Insolvent Himanshu Choksi and
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Shaunak Choksi to the Claimant which is annexed at Exhibit 'B' to the Affidavit in
Rejoinder. Claimant has further submitted that therefore statement of legal heirs of
Insolvent made in paragraph 6 of the said affidavit in reply "In view of the
payments made as aforesaid, debt under the 2005 Decree also stood fully settled
and Decree satisfied." is factually false statement made by the Himanshu Choksi
in his said affidavit in reply.
18. Claimant has denied that his debt was fully settled in May 2008.
Claimant has further denied that he has already recovered debt due to him and
there is double recovery for unjust and enrichment as alleged by the legal heirs of
the Insolvent. Further denied that he has dishonoured cheques and wrongfully
making Claims.
19. Claimant further submits in the said Affidavit in Rejoinder that,
cheques for repayment of principal amount and interest were dishonoured,
Criminal Complaint No. 1687/SS/2005 regarding dishonour of cheque was
accordingly filed, Summary Suit No. 2264 of 2004 was also filed and accordingly
Decree was passed in 2005 and the said amount with interest remains outstanding
till date. Therefore, the Claim of the legal heirs of the Insolvent in their Affidavit in
reply that Proof of Debt should not be permitted requires to be expunged or
rejected.
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20. Mr. Mehta, learned Advocate for the Legal Heirs of the deceased
Insolvent further drawn my attention to the Supplemental Affidavit dated 9 th
September, 2025 of Himanshu Harshad Choksi, Legal Heir No 1 of the deceased
Insolvent in proceedings in respect of proof of debt filed by M/s. Kirtanlal & Sons.
In the said affidavit, he has referred to his Reply Affidavit filed whereby he has
brought on record regarding 2(two) Criminal Complaints under Section 138 to 142
of Negotiable Instruments Act, 1881 filed against Choksi Tubes Ltd and its
Directors being the deceased Insolvent, Himanshu H. Choksi and Shaunak Choksi
and regarding payment of Rs.24,00,000/- (Rupees Twenty Four Lakhs Only) to the
Claimant in instalment on various dates from the period from November, 2007 to
May 2008.
21. In reply to that Claimant has denied by their Affidavit in Rejoinder
dated 14th November, 2022, wherein interalia, Claimant had denied that the Debts
were repaid as mentioned in the said Affidavit and submitted that the said
statement of Claimants were false statement and the said denial by the Claimant of
the receipt of Rs.24,00,000/-(Rupees Twenty Four Lakhs Only) in satisfaction of
the debt is not honest and it is wrongful.
22. Mr Mehta learned Advocate for legal heirs of the deceased insolvent
further argued that, in the said affidavit Mr. Himanshu Choksi has further
submitted that Claimant has requested to handover Rs.24,00,000/-(Rupees Twenty
Four Lakhs Only) to his Accountant, authorised representative Mr.Ulhas Pandya
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and accordingly Choksi's have sent cash representing the instalment amounts
referred to in the paragraph under reference to Mr. Pandya through their Office
Clerk Mr. Shivaji Admore on the date referred to in paragraph 6 of the Affidavit in
reply. The said Mr. Shivaji, Clerk always met Mr. Pandya in the precincts of the
Small Causes Court and the cash amounts were handed over to Mr. Pandya in the
presence of Mr. A. S. Khan, Advocate and again prayed for rejecting the claim of
the Claimant.
23. Mr Amin Learned Advocate for the claimant counter reply by saying
that in reply to the aforesaid supplemental affidavit of Himanshu H. Choksi,
Claimant Mr. Rajen K. Shah has filed Additional Affidavit in Rejoinder wherein in
the said Affidavit he reiterated that the consent terms dated 29 th April, 2008 in
Criminal Complaint No.1687/SS/2005 signed by parties to the said complaint is the
only understanding arrived at between the parties as well as he deny that the
Claimant had requested the money be handed over to the Claimant's Accountant,
authorised representative Mr. Pandya and therefore, the Claim of Choksi's sending
cash representing instalment amounts to Mr. Pandya through their Clerk Shivaji
Admore on dates referred in paragraph 6 in the precincts of Small Causes Court
where cash was handed over Mr. Pandya in presence of Mr. A. S. Khan is false to
the knowledge of Himanshu H. Choksi.
24. It is further submitted that the Claimant has read Paragraph no. 6 of
the Affidavit in Reply dated 12th September, 2022 and there are no dates mentioned
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in paragraph no. 6 and hence supplemental affidavit of Himanshu H Choksi is
another deposition of him which is precious in nature and therefore, claimant
denies that proof of debt be rejected.
25. Mr. Amin learned Advocate for the claimants also relied upon provisions
of Order XXI Rule 1 and 2 of CPC that no application maintainable or
investigation required in support of alleged settlement claimed by Judgment
debtors with the claimants in contravention of order and relied upon para 10 of
(1999) 6 SCC 30 : Badamo Devi vs Sagar Sharma. Which is replied by Mr
Mehta learned Advocate for the legal heirs of the deceased Insolvents that the bar
from recognizing an uncertified payment is only restricted to an Executing Court
and no other court. All other courts including the Insolvency Court can take
cognizance of a payment towards the decree which is not recorded or certified in
accordance with order XXI Rule 2 of CPC. It is settled law that an Insolvency
court can even go behind the decree which executing court cannot, and relied upon
page nos. 2367 and 2368 of Mulla's commentary.
26. The present application is mainly based on Rule 25 of the Second
Schedule of PTI Act, 1909, which reads as under :
"25. Admission or rejection of proof- The Official Assignee shall examine
every proof and the grounds of the debt, and in writing admit or reject it in
whole or in part, or require further evidence in support of it. If he rejects a
proof he shall state in writing to the Creditor the grounds of the rejection."
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27. While adjudicating the claim of the Claimant, evidence in the form of
statements of both the partners of the Claimant viz. Mr. Rajen K. Shah and Mrs.
Darshana R. Shah and also of Mr. Himanshu Harshad Choksi, One of the legal heir
of the deceased Insolvent recorded by the Official Assignee wherein legal heir of
the deceased Insolvent in question no.23 and 26 confessed that, he does not have
any documentary proof for the alleged amount of Rs.24,00,000/- paid in cash to the
Accountant/Representative of the Claimant. The claim of the Claimant is under the
Decree dated 15th March, 2005 passed by this Hon'ble Court. The Claimant has
vide his Affidavit in Reply and Rejoinder and Additional Affidavit denied having
received the said amount of Rs.24,00,000/- amount in cash and also of having
given any authority to his Accountant to accept the said amount. Therefore, said
Accountant/Representative Mr. Ulhas Pandya cannot be summoned under Rule 25
of the Second Schedule of PTI Act, 1909.
28. On 6th April, 2026, Himanshu H Choksi, Legal Heir of deceased
Insolvent filed application before the Official Assignee for issuance of Witness
Summons under Rule 25 of the Second Schedule of the PTI Act in the said
Affidavit he has referred to the Affidavit of Proof of Debt dated 16 th December,
2001 filed by the Claimant for alleged claim of Rs.31,91,877/- (Rupees Thirty One
Lakhs Ninety One Thousand Eight Hundred Seventy Seven Only) alongwith
further interest under the decree dated 15th March, 2005 in Summary Suit No.
2268/2004. In the said Affidavit, he has filed Reply Affidavit dated 12 th September,
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2022 read with Supplemental Affidavit dated 9 th September, 2025 by the Legal
Heirs of deceased Insolvent whereby he has brought on record that the debt claim
under the decree has been settled and sum of Rs.24,00,000/-(Rupees Twenty Four
Lakhs Only) paid to the claim in instalment on various dates between November,
2007 to May 2008 and the said money in cash had been handed over to Claimants
Accountant authorised representative Mr. Ulhas Pandya who had attended to the
hearing of Criminal Complaint filed by Claimants. It is the case of the legal heirs
of the deceased Insolvent that Rs.24,00,000/-(Rupees Twenty Four Lakhs Only) in
cash had been handed over to said Mr. Ulhas Pandya who was Accountant and
responsible officer of Claimants proprietary firm. Claimant by his affidavit in
rejoinder dated 2nd December, 2025 denied that the cash amount were handed over
to Mr. Ulhas Pandya.
29. Mr. Mehta, Learned Advocate for legal heirs of the deceased Insolvent
relies upon Section 5, 59 and 60 of The Indian Evidence Act, 1872 which provides
that all facts must be proved by oral evidence. In this case, oral evidence cannot be
considered as claim under the decree of the year 2005 and until the Affidavits and
Additional Affidavit filed by Legal heirs of the deceased Insolvent, the said issue is
not raised for so many years before any forum. Hence cannot be considered.
The oral testimony being uncorroborated by any contemporaneous
documentary record or independent evidence does not inspire confidence. The
burden of proving payment has not been discharged. Consequently the request to
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summon the alleged Mr. Ulhas Pandya to establish such payment by oral evidence
is rejected as it would not assist in proving a transaction that ought ordinary to
have been evidenced by documentary record.
30. Mr. Mehta, learned Advocate for the Legal Heirs of the deceased
Insolvent has relied upon following Judgments:
1.The rules of natural justice require, inter-alia, that a party should
have full opportunity of adducing all relevant evidence on which he
relies [Paragraph 10 of the Judgment of the Supreme Court reported at
[AIR 1957 SC 882 (Union of India Vs. T. R. Varma)]
2. The question whether the Official Assignee had jurisdiction to
investigate the claim by recording evidence of witnesses was a
question directly in issue in the Judgment of a Division Bench of the
Bombay High Court reported at 1966 Mh. L. J. 179
[Re.:Khushalchand B. Daga]
3. A similar legal position had been set out in an earlier Judgment of a
Division Bench of the Calcutta High Court reported at AIR 1926
Cal.898 [In Re: Mogi & Co.: The Yokohama Specie bank Ltd. Vs.
S. Curlender & Co.]
4. AIR 1956 ALL 403 [Abdul Shakur & Ors. Vs Kotwaleshwar
Prasad & Ors.] regarding authority of the official assignee in
repect of adjudication of claim.
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31. Mr. Amin, Advocate for the Claimant refers to the following citations:
1. (2000) 7 SCC 240 : Lakshmi Narayan vs SS Pandian (Para 7, 8,
11 and 14)
2. (1999) 6 SCC 30 : Badamo Devi vs Sagar Sharma (Para 10)
3. (1997) 1 SCC 373 : Sultan Begum vs Prem Chand Jain (Para
16, 17, 19, 20, 22, 23, 24, 30, 31 and 32)
CONCLUSION :
32. I have heard learned Advocate for the Legal heirs of the deceased
Insolvent as well as for the Claimants, I have perused the records and proceedings
as regards issue no. 1, legal heirs of the deceased Insolvent have raised a specific
contention that the decretal amount has already been paid to an
Accountant/Representative of the Claimant namely Ulhas Vithaldas Pandya, who
was allegedly authorised to receive such payment on behalf of the Claimant. On
the basis of the said plea, the Insolvent has sought issuance of summons to the said
Ulhas Pandya, Accountant of Claimant for examination.
33. It is well settled that a decree constitutes prima facie Proof of the debt.
However, in Insolvency the Claimant M/s Kirtanlal and Sons has filed the present
claim on the basis of a decree dated 15 th March, 2015 passed by the Hon'ble Court
(Coram: D. G. Karnik, J.) which remains unsatisfied on record. A decree is a
conclusive adjudication of liability between the parties and ordinarily constitutes
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sufficient proof of the debt in Insolvency Proceedings, unless there is a cogent
material to show that the same has been satisfied.
34. The legal heirs of the Insolvent have opposed the claim of the
Claimant-M/s. Kirtanlal and Sons by contending that payment was allegedly made
to Mr. Ulhas Pandya an Accountant/Representative of the Claimant and have
sought issuance of summons to the said Mr. Ulhas Vitthaldas Pandya.
35. In the present case, Claimant had specifically denied of receipt of
payment of the said amount of decree of Rs.24,00,000/- (Rupees Twenty Four
Lakhs Only) in cash from the legal heirs of the Insolvent and that also denies the
Claimant had directed the said Mr. Ulhas Pandya, their Accountant/Authorised
representative to receive said amount of Rs.24,00,000/-(Rupees Twenty Four
Lakhs Only) of decree in cash from legal heirs of deceased Insolvent between the
period from November, 2007 to May, 2008. The Claimant in their Affidavit in
Rejoinder denied that the cash amount were handed over to Mr. Ulhas Pandya.
36. In the present, the plea of payment raised by the legal heirs of the
deceased Insolvent is found to be vague and unsupported by any documentary
evidence. No particulars such as date of payment, proof of authority of the alleged
receipt or any receipt of acknowledgment have well furnished.
37. The request for issuance of summons to Ulhas Pandya
Accountant/authorised representative of Claimant appears to be a fishing and
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roving inquiry which cannot be permitted in the absence of a prima facie
foundation any documentary proof of payment made to the Claimant in cash.
ORDER:
38. The applicant Mr Himanshu Harshad Choksi, One of the Legal heir of
the deceased Insolvent has moved the present application seeking issuance of
SPONSORED
summons to Mr Ulhas Vitthaldas Pandya the accountant and Authorised
representative of M/s. Kirtanlal and Sons the decree-holder on the allegation that
the decretal amount had been paid in cash to the said accountant on behalf of the
decree-holder and that the testimony of the proposed witness is necessary for
adjudication of the claim.
39. The application, the record and the submissions of both the sides have
been carefully considered. The Official Assignee, while adjudicating claims under
the Presidency-Towns Insolvency Act, 1909, possesses the authority to summon
witnesses where their evidence is necessary for the just determination of the matter.
However, such power is discretionary and is required to be exercised judicially and
only where the applicant establishes a prima facie case demonstrating that the
proposed evidence is relevant, material and necessary. The power cannot be
invoked to permit a fishing or roving enquiry or to enable a party to collect
evidence which it ought to have possessed before raising a plea.
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40. In the present case, the applicant asserts that the decretal amount was
paid in cash to the accountant of the decree-holder. The burden of proving such
payment squarely rests upon the applicant. However, no prima facie material has
been produced to substantiate the allegation,
1. There is no written authority or power of attorney issued by the decree-
holder authorising the accountant to receive payment on its behalf.
2. No receipt or acknowledgment executed by the accountant or the decree-
holder has been produced evidencing receipt of the alleged payment.
3. No contemporaneous accounting records such as the cash book, ledger,
journal, payment voucher, receipt register, income-tax records, audit records
or bank records have been produced showing withdrawal, payment or receipt
of the decretal amount.
4. The alleged payment is stated to have been made wholly in cash towards
satisfaction of a court decree. Such a transaction is unusual in commercial
practice and, in the absence of documentary proof, requires strong and
independent corroboration.
5. Lastly, there is contemporaneous correspondence acknowledging or referring
to the alleged payment. The application is founded solely upon the
applicant’s bare assertion.
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41. The Official Assignee is not required to reopen on re-examine matters
already adjudicated by the Hon’ble Court which is a competent court – a credible
plea of discharged is established. In the absence of any material substantiating the
plea of payment, no sufficient ground is made out for summoning the said Ulhas
Pandya Accountant of Claimant.
42. Under Sections 101 to 103 of the Indian Evidence Act, 1872, the burden
of proving payment lies upon the party asserting it. Unless a factual foundation is
first established by reliable prima facie material, the Official Assignee is not
required to issue coercive process for summoning a witness merely to ascertain
whether evidence supporting the plea may subsequently emerge.
43. The principles governing summoning of witnesses under the Code of
Civil Procedure also contemplate that the proposed evidence must be shown to be
relevant and necessary for adjudication. The Court or Authority like Official
Assignee is not obliged to summon every witness named by a party where the
application lacks bona-fide foundation or is intended only to conduct a fishing
enquiry.
44. In the present case, issuance of summons would amount to permitting
the applicant to create evidence in support of an otherwise unsupported plea. Such
exercise would be contrary to settled principles governing judicial and quasi-
judicial proceedings. Accordingly I am satisfied that no sufficient grounds exist for
issuance of summons to the proposed witness Mr Ulhas Vitthaldas Pandya under
22
Rule 25 of the Second Schedule of PTI Act, 1909, therefore, the application is
rejected.
45. It is clarified that the present order is confined only to the application
for issuance of Witness Summons be decided independently on the basis of
admissible evidence available on record. Thus, I answered the Issue No. 1 in
Negative.
46. Issue No. 2 Ordered accordingly.
47. The claim shall proceed for adjudication on the basis of the material
on record.
(Chandan J. Bhatt)
Official Assignee
MAS/CJB
