MALINI AYYAPA NAICKER (NOW DEAD) THROUGH L.R. ETC. ETC. versus SETH MANGHRAJ UDHAVDAS FIRM BY MANAGING PARTNER CHATHURBHUJ CHHABILDAS (DEAD) THEREAFTER BY L.RS. & ORS.

Citation: [1969] 3 S.C.R. 698 · Decided: 13-02-1969 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Case Partly allowed
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Judgment (excerpt)

MALINI AYYAPPA NAICKER (NOW DEAD) THROUGH 
A 
L.R. ETC. ETC. 
v. 
SETH MANGHRAJ UDHA VDAS FIRM BY MANAGING 
PARTNER 
CHATHURBHUJ 
CHBABILDAS 
(DEAD) 
THEREAFl'ER BY LRS. &: ORS. 
a 
February 13, 1969 
[S. M. SIKRI, R. S. BACHAWAT AND K. S. HBGDB, JJ.] 
· ·Provincial Insolvency Act, 1920, •· 7S(l), first proviso-Power of High 
Couri to sr4isfy itself that an appeal wa.r decided by tht Distrkt CollTt 
"'according to iaw"-Scope of. 
Tho petitioning creditor in an insolvency proceeding sought annullment 
of two mortgages, one for Rs. 15,000/. in favour of the appellant in 
C.A. 84S and another for Rs: 10,000/. in favour the appellant in C.A. 846. 
The mortgages weno date(! November 4, 1950 and were registered on 
November 6, 1950. Tho InsOlvency Court held that the mortgages were 
not supported by consideration and were ~led with a view to screen· 
ing some of the properties of the insolvents from their creditor.i. It there-
fore, annulled the mortgages under section S3 of tho Provincial InsOlvency 
Act. The District Judge, in appeal, reversed the findings of the trial court 
but the High Court, acting under the fir.it proviso of section 75(1) of the 
Act, set aside the judgment of the District Judge and restored that of the 
Insolvency Court. 
In an appeal to this Court by special leave, it was contended on behalf 
of the appellants (i) that the High Court while acting under the first proviso 
of section 75(1) to satisfy itself "that an order made in any 
appeal 
decided by the District Court was according to law" had no power to dis-
turb the findings of fact reached by the appellate court; the jurisdiction of 
tho High Court is a very limited one and not more than that conferred on 
it by su""ection 100(1) C.P.C.; and (ii) that the conclusions of the High 
Court were unsustainable on the evidence on record. 
HELD: (i) The legislature did not confer on the High Court. under 
the first proviso to s. 75 (I) of the Act an appellate power nor did it con-
fer on· it a jurisdiction to reappreciate the evidence on record. While 
exercising that power the High Court is by and lar~ bound by the findings 
of fact reached by the District Court If the legtslature intended to con-
fer power on it to ~xamine both questions of law and fact it would have 
conveyed its intention by appropriate words as has been done under 
various other statutes. A wrong decision on facts by a competent court 
is also a decision according to law. [701 DJ 
A decision being "contrary to law" as provided in s. 100(1) (a) of the 
Code of Civil Procedure is not the same thing as a decision being not 
"according to law" as prescribed in the first proviso of s. 7S(D of the Act 
The latter expression is wider in ambit than the former. It is neither de-
sirable not possible to give an exhaustive definition of the expression 
"according to law". The power given to the Hi$b Court . under the first 
proviso to s. 75(1) of the Act is similar to that given to it under •· 2S of 
the Provincial Small Cau•e• Court• Act. [701 Fl 
BtU .l Co. Ltd. v. Waman H<mra;, (1938) 40, Bom. L.R. 125; Hari 
Shankar v. Rao Girdhari Lal Chowdhury, [1962] 1, supp. S.C.R. 
399; 
c 
D 
E 
F. 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
MALIN! AYYAPPA v. MANGHltAJ (Hegde, J.) 
699 
Official Receiver, Kanpur and Anr. v. Abdul Shakur [1965] I S.C.R. 254; 
referred to and explained. 
(ii) On the evidence, the findings of the District Court on. the pay-
ment of consideration were correct findings o'f fact and the High Court 
could not have interferred with the same. However, one payment in res-
pect of the mortgage in C.A. 845 was not proved and the mortgage was 
therefore only valid to the extent of Rs. 10,500/-. 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 845 and 
846 of 1963. 
Appeals by special leave from the judgment and order dated 
January 17, 1958 of the Madras High Court in Civil Revision 
Petitions Nos. 981 and 982 of 1956. 
S. V. Gupte and R. Thiagarajan, for the appellants (in both 
the appeals). 
Naunit Lal, for the respondents Nos. 1 (c) and 17 (in C.A. 
No. 845 of 1963) ajlld respondents Nos. l (c) and 16 (in C.A. 
No. 846 of 1963). 
The Judgment of the Court was delivered by 
Hegde, J. These appeals arise from an insolvency proceeding 
wherein one Ponnayya Konar and his sons were adjudicated as 
insolvents. In the said proceeding the petitioning creditor sought 
to get annulled two mortgages one for Rs. 15,000 (Exh. A-1) 
executed by the insolvents in favour of Ayyappa Naicker, the 
a
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