L.H. Jenkins, K.C.I.E. C.J.
1. Vallabhdas Jairam and Bhanji Jairam, the appellants in Appeal No 1261, and their brother, Khimji Jairam, having sought the benefit of the Act passed for the relief of Insolvent Debtors in India, their application for discharge was opposed, and on the 4th of February, 1903, an order was passed by the Commissioner in the following terms:
For as much as it appears to this Honourable Court that the said insolvent Vallabhadas Jairam Thackar and Bhanji Jairam Thackar have fraudulently, with the intent to conceal the state of their affairs and to defeat the objects of this Act, willfully prevented and purposely with held the production of letters written to them by their, brother Bhanji Jairam, relating to such of their affairs as are subject to investigation under the Act whereby they have brought themselves within the meaning of Section 50 of Act 11 & 12 Vict., c. 21, this Honourable Court doth order and adjudge that the said insolvents Vallabhdas Jairam Thackar and Bhanji Jairam Thackar be forthwith taken into custody of the Jailor of His Majesty's Common Jail of Bombay on its criminal side to suffer simple imprisonment by virtue of a warrant under the seal of this Honourable Court and that they be there detained accordingly, and this Honourable Court doth further order and adjudge that the suit insolvents Vallabhdas Jairam Thackar and Bhanji Jairam Thackar shall be discharged from the, said custody so soon as the said insolvents Vallabhdas Jairam Thackar and Bhanji Jairam Thackar shall have been in custody on the criminal side of the said jail for a period of three calendar months, to be computed from the date of this order.
2. It was at the same time declared that Khimji Jairam was entitled to the benefit of the Act and to protection from arrest.
3. From this order of Commissioner two appeals have been presented, the first by Vallabhdas Jairam and Bhanji Jairam, who contend that no offence has been committed, that the order for imprisonment was wrong and shat they were entitled to their discharge; and the second by Naranji Pramanand, one of the opposing creditors, who contends that Khimji Jairam should not have had his discharge, and that the insolvents have made away with and concealed portions of their property. We have already reversed so much of the order as directed the imprisonment of Vallabhdas and Bhanji, but we deferred delivering judgment until the arguments on the whole case had been completed. The ground on which the imprisonment was directed was, according to the order as finally drawn up, that the appellants had, fraudulently and with intent to conceal the state of their all are and to defeat the objects of the Act, wilfully prevented and purposely withheld the production of letters written to them by their brother Bhanji Jairam, and that thereby they had brought themselves within the operation of Section 50 of the Indian Insolvent Act.
4. Now, it is clear that the proceedings, so far as they resulted in imprisonment, amounted to a criminal case, and 'in all criminal cases it is necessary that there should be a charge, a finding and a conviction, as a foundation for the sentence. Everything should be strictly and accurately pursued; and if in any one of these three points a substantial defect should appear, it would be a ground for reversing the proceeding' (see Ex parte Van Sandau (1844) 1 Phi 445. Simillarly in the case of In re Pollard, (1868) L.R. 2 P.C. 106 it is said that no person should be punished for contempt of Court, which is a criminal offence, unless the specific offence charged against him be distinctly stated and an opportunity of answering it given to him.
5. In this case there was no charge: no question as to the letters was put to Bhanji or even to Vallabhdas until late in his examination (even then not in a pointed form) and there is no evidence to support the charge. Vallabhdas, when he was questioned on the matter, said, 'I do not know where the other letters from Dhanji are if they are not in the Official Assignee's office.' No search, however, was made there by the opposing creditors, though the Commissioner seems to have suggested it.
6. It is to be regretted that this suggestion was disregarded, for had a search been made, it would have been ascertained that among the insonlents' papers there were letters from their brother Dhanji.
7. It appears to me then, that the conditions indicated tin Section 50 were not established, and that the order for imprisonment was wrongly made. This brings me to the question whether the appellants, Vallabhdas and Bhanji, are entitled to their personal discharge. Their brother Khimji has been discharged, and it does not appear that apart from the charge of suppression the Commissioner would have withheld from Vallabhdas and Bhanji the relief he granted to Khimji.
8. Before us their discharge has been opposed by Naranji parmanand, who is represented by Mr. Jardine, and Naranji Narsey and others who have appeared by Mr. Robertson. Naranji Parmanand has based his opposition substantially on the third and fourth grounds mentioned in his petition of appeal. Naranji Narsey and those who co-operated with him have also stated grounds of opposition, but at the hearing they were not urged before us. I therefore proposeto limit myself to the case sought to be made by Naranji Parmanand.
9. But, before proceeding to deal with the matter I desire to comment on the inconvenient procedure which has been adopted. The grounds of opposition urged by the several opposing creditors are framed in the most general terms, and, as far as one can judge without any serious attempt to ascertain what the real facts were. I recognize there often must be difficulties in the way of opposing creditors placing a clear case before the Court at the outset, but Section 47 of the Act provides a machinery by which these difficulties can be effectually over-come. It may not always be necessary to make a reference as contemplated by that section; but at any rate, it would be a convenient practice to grant such reasonable adjournments in the first instance as would enable the creditors to look into the Insolvents' affairs, to ask for and receive from the insolvents such explanation as may be deemed necessary, and to re-state their grounds of opposition with more precision and definition. Unless some such procedure be adopted, the inevitable result is a roving and aimless examination in Court, occupying much time and leading to title practical result. The present case furnishes an apt illustration of what I have said, for even before us on appeal the opposing creditors were unable to bring forward any but the vaguest suggestions.
10. Now the first head of objection to the discharge of the insolvent has been the imputation that they fraudulently with intent to diminish the assets to be divided among their creditors, made away with and concealed the sum of Rs. 98,001-15-3 appearing in their schedule as debt due by Dhanji Jairam to the insolvent's firm. Dhanji Jairam is a brother of the insolvents and, when the facts are examined, we find that this sum of Rs. 98,001-15-3 is a balance representing the results of trading for a period of thirteen years or so, and is in part made up of interest. It appears to mo to be a misuse of the language to apply to such a position the expression that the sum of Rs 98 001-15-3 had been made away with, or concealed. It is shown as an item in the insolvents' books and is disclosed in the insolvents' schedule.
11. But then it is said that the insolvents have been guilty of concealment because the sum is represented as their separate property, whereas it belonged jointly to them with their brother Dhanji. Even if S hypothesis on which this argument is based were correct, I still fail to see that there has been any making away or concealment; for, in describing it as their separate property and not their joint property, the insolvents represent that their creditors are entitled to the whole and not only to a fraction of the sum; and at the same time it is only by so regarding it that they can claim interest in respect of it. To argue that the securities held by Dhanji for this sum should have been disclosed, assumes, not only that such securities exist, but also that the insolvents were not (as they declared) separate from their brother. This in my opinion has not been made out, and accordingly I am of opinion that the ground of opposition so far as it relates to the sum of Rs. 98,001-15-3 has not been established.
12. The next ground of opposition is that a sum of Rs. 9,724-11-6 appearing as a cash balance at the end of Samvat 1956 according to the books of the insolvents' firm is unaccounted for. At first sight this appears a formidable objection; but the explanations which have been given before us satisfy me that it is only the appearances that are against the insolvents. No doubt one expects to find a correspondence between the cash box and the cash balance shown in the books; but an examination shows that the cash balance appearing in the books did not exactly represent the state of the cash box and I am satisfied on the evidence before us that the discrepancy must be ascribed to mistaken postings, and that this discrepancy has existed for a long time past and from a time when the insolvents were doing a prosperous business. By far the greater part of the discrepancy has been already explained and I think it very likely that a further examination of the books would complete the explanation. But be this as it may, the discrepancy does not justify the conclusion for which the opposing creditors contend and this ground of opposition has not been made out.
13. It only remains now to deal with the objection that the insolvents have fraudulently and with intent to diminish the assets to be divided among their creditors concealed their share as members of a joint and undivided Hindu family in the oil mill described in their schedule as the Ranchordas Dhanji oil mill. Now it will be perceived that this ground of objection is based on the assumption that the insolvents and their brother Dhanji were joint. I have already indicated my opinion as to the failure to establish this point in relation to the item of Rs. 98,001-15-3, and equally, in relation to the oil mill, I consider that the proof falls short of what is requisite to establish the insolvents' joint interest in the oil mill. [His Lordship then considered the evidence.]
14. The result is that in my opinion the opposing creditors have failed to make good their charge as to the mill.
15. This disposes of the first of the two appeals.
16. On the second nothing has been urged beyond that with which I have already dealt.
17. The case will now go back to the Commissioner that he may deal with it in the ordinary course. But the insolvents must have their costs of both appeals.