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Emperor Vs. Mulshankar Harinand Bhat - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number Criminal Application for Revision No. 177 of 1910
Judge
Reported in(1910)12BOMLR750
AppellantEmperor
RespondentMulshankar Harinand Bhat
Excerpt:
.....1909), sections 17, 103-adjudged insolvent-' suit or other legal proceedings against the insolvent-penal code (act xlv of 1860), section 421-fraudulent transfer of property-magistrate's jurisdiction to try the offence.;m. applied to the insolvent debtors court at bombay for relief under the provisions of the presidency towns insolvency act, 1909; and was adjudicated an insolvent the same day. ten days later, a creditor of his filed a complaint in the magistrate's court, against him for an offence under section 421 of the indian penal code, and against two others for abetment of the offence. m. contended that the magistrate's jurisdiction to entertain the complaint under section 421 was excluded by the provisions of the presidency towns insolvency act, 1909, and that only the insolvency..........bombay, the charge against the first petitioner being an offence under section 421 of the indian penal code and the charge against the other two being abetment thereof. the first petitioner was adjudged insolvent under the presidency towns insolvency act (iii of 1909) ten days prior to the institution of the complaint. it was urged for them before the learned magistrate by way of preliminary objection to the complaint that his jurisdiction to try them for an offence under section 421 of the indian penal code was excluded by the provisions of the presidency towns insolvency act and that the only court which was competent to entertain a complaint of the offence was this court exercising insolvency jurisdiction under the act. the preliminary objection having been overruled by the.....
Judgment:

N.G. Chandavarkar, Kt., J.

1. The three petitioners are being prosecuted on the complaint of a creditor of the first petitioner in the Court of the Third Presidency Magistrate, Bombay, the charge against the first petitioner being an offence under Section 421 of the Indian Penal Code and the charge against the other two being abetment thereof. The first petitioner was adjudged insolvent under the Presidency Towns Insolvency Act (III of 1909) ten days prior to the institution of the complaint. It was urged for them before the learned Magistrate by way of preliminary objection to the complaint that his jurisdiction to try them for an offence under Section 421 of the Indian Penal Code was excluded by the provisions of the Presidency Towns Insolvency Act and that the only Court which was competent to entertain a complaint of the offence was this Court exercising insolvency jurisdiction under the Act. The preliminary objection having been overruled by the Magistrate, the petitioners ask this Court to quash his order and proceedings in the exercise of its revisional jurisdiction.

2. First, it is contended that the Magistrate's jurisdiction is excluded, because no leave of the Insolvency Court under Section 17 of the Presidency Towns Insolvency Act has been obtained for the institution of the criminal proceedings in the Magistrate's Court. That section provides that 'on the making of an order of adjudication...no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt, or shall commence any suit or other legal proceeding except with the leave of the Court and on such terms as the Court may impose.' By the complaint filed in the Magistrate's Court the creditor here concerned is not asking for 'any remedy against the property' of the first petitioner. Nor is the criminal proceeding initiated in that Court a suit. But it is urged that it falls within the mote general expression ' or other legal proceeding.' That general expression, coming after 'suit', a word of more limited application, must, in my opinion, be construed on the principle of ejusdem generis. It was said that such construction was opposed to the general scheme of the Act, which is to give complete control to the Insolvency Court over matters, both civil and criminal, affecting the property and the person of an adjudged insolvent. Where the Act creates an offence, it is the Insolvency Court which has jurisdiction as to it; as to offences under the Indian Penal Code, the ordinary jurisdiction of the criminal Courts cannot be held to be excluded, unless expressly or by necessary implication the Act repeals the Code for the purposes of those offences.

3. The question, therefore, is whether there is anything in the Act which repeals Section 421 of the Indian Penal Code. We have at the outset Section 39 of the Act which directs that 'the Court shall refuse the discharge in all cases where the insolvent has committed any offence under this Act, or under Sections 421 to 424 of the Indian Penal Code.' Then Section 79 of the Act makes it the duty of the Official Assignee ' to investigate the conduct of the insolvent and to report to the Court upon any application for discharge, stating whether there is reason to believe that the insolvent has committed any act which constitutes an offence under this Act or under Sections 42 r to 424 of the Indian Penal Code in connection with his insolvency ' and ' to take such part and give such assistance in relation to the prosecution of any fraudulent insolvent as the Court may direct or as may be prescribed'. This language is consistent only with the preservation of the jurisdiction of the ordinary criminal Courts as to the offences under Sections 421 to 424 of the Indian Penal Code. These sections, so far from being repealed, are recognized by the Act as being operative and the prosecution of the insolvent for the offences created by them is distinctly contemplated.

4. The only section of the Act which is relied on as in effect repealing Section 421 of the Indian Penal Code and substituting therefor a new offence, created by the Act and made triable only by the Insolvency Court, is Section 103. But that section does not substantially interfere with Section 421 of the Code. As its essential ingredients show, it is more or less a new offence, created by the Act in addition to the offence under the Code.

5. What are the ingredients of the offence under Section 421 of the Indian Penal Code as contrasted with those of the offence under Section 103, Clause (b) Sub-clause (ii) of the Presidency Towns Insolvency Act, with which we are here concerned First, the act complained of must, under Section 421, have been done ' dishonestly or fraudulently', whereas the offence, to fall within Section 103 of the Act, requires only the element of fraud and dispenses with that of dishonesty. It is true that at least one element, that of dishonesty, is common to both; and it may be conceded that there are also some common elements in both as to the act itself constituting the offence. For instance, the act contemplated in Section 421 of the Code consists in (i) the removal of the property, or (2) to concealment, or (3) its delivery to any person, or (4) its transfer or the causing of its transfer to any person, without adequate consideration. The offence under Section 103 of the Act brings in a few of these elements-namely, removal, concealment, and transfer. But it must be a transfer of a limited kind, it has to be by way of charge or mortgage only. Then again under -s. 421 of the Code the transfer must be 'without adequate consideration'; but that element is absent in Section 103, according to which it is immaterial whether the transfer by way of charge or mortgage is supported or not by adequate consideration.

6. These differences between the two sections are intensified when we come to the question of intention as an essential element of the offence constituted by each of the sections. The intention required by Section 421 of the Code is that the act must be done to prevent, or with knowledge that it is likely to prevent, the distribution of property according to law among the creditors of the offender or the creditors of any other person, whereas the intention in Section 103 of the Act is not the distribution but either the diminution of the sum to be divided among the insolvent's creditors or the giving of an undue preference to any of the said creditors. Distribution need not necessarily have the effect of diminution in all cases; and there may be undue preference, which does not necessarily interfere with the distribution.

7. So also as to the penalty provided by either section. The punishment for an offence under Section 421 of the Code is two years' imprisonment of either description, or fine, or both; that under Section 103 is only two years' imprisonment.

8. It may be that in some cases the facts proved may bring about elements common to both the sections; but that is not enough to create a repugnancy between them. The repugnancy or contrariety must be substantial and must clearly arise out of the general features of the two sections. ' Every affirmative statute is a repeal of a precedent affirmative statute, where its matter necessarily implies a negative; but only so far as it is clearly and indisputably contradictory and contrary to the former Act in the very matter and the repugnancy such that the two Acts cannot be reconciled.' (Dwarris on Statutes, 2nd Edition, pp. 530 and 531). As was said by Grove J, in Hill v. Hall (1876) L.R. 1 Ex. D. 411, ' it is common learning that one statute may be impliedly repealed by a subsequent statute necessarily inconsistent with it; but then the inconsistency must be so great that they cannot both be to their full extent obeyed....! do not think that in considering a question of this kind we ought to hold that a mere accidental inconsistency between two statutes amounts to a total repeal of the earlier; such a doctrine might be pushed to a mischievous extent.'

9. On the ground, therefore, that the offence under Section 421 of the Indian Penal Code is substantially different from the offence under Section 103 of the Presidency Towns Insolvency Act, I am of opinion that the Magistrate's jurisdiction to try an adjudged insolvent for the former offence is not taken away by the latter Act.

10. The rule must, therefore, be discharged.

Heaton, J.

11. A creditor instituted against a debtor a prosecution under Section 421, Indian Penal Code, after an order of adjudication had been made under Act III of 1909 in respect of the debtor. The leave of the Insolvency Court was not obtained to institute those criminal proceedings. The question is whether the Magistrate has jurisdiction to proceed until the leave of the Insolvency Court is obtained. The argument that he has not is founded on the terms of Section 17 of the Act. That section runs as follows:-

On the making of an order of adjudication, the property of the insolvent wherever situate shall vest in the Official Assignee and shall become divisible among his creditors, and thereafter, except as directed by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt or shall commence any suit or other legal proceeding except with the leave of the Court and on such terms as the Court may imposo :Provided that this section shall not affect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with it is this section had not been passed.

12. It seems to me that by ' other legal proceeding ' is meant broadly other proceeding of a civil nature connected with the insolvent's estate. This is to be inferred from the words of the section as a whole; from what is quite plainly its main intention, which is the vesting of the insolvent's property in the Official Assignee and its protection against Court process; and from the position of the section in the general scheme of the Act. I think the expression does not include criminal proceedings.

13. It was argued that the Act intended the Insolvency Court to have control not only over the insolvent's estate but in respect of all matters arising out of his conduct in so far as it could be brought in question in relation to the insolvency. There is much force in this argument; but had the intention of the legislature been to prohibit a Magistrate from taking cognizance of a complaint of an offence under the Indian Penal Code against an insolvent, it would have given clear expression to that intention; and this it has not done.

14. It was also argued that Section 103 of the Insolvency Act by defining and making punishable offences akin to those defined by Section 421 of the Indian Penal Code has repealed the latter section in the case of matters coming within the scope of the Insolvency Act. Sections 39 and 79, however, make it quite clear that it is not so : for both those sections expressly contemplate as separate matters, an offence under Section 421 of the Indian Penal Code in the case of an insolvent, and an offence under the Insolvency Act.

15. Lastly, it was urged that if a prosecution was allowed without leave of the Insolvency Court an insolvent could be prosecuted twice over for the same offence; once before a Magistrate under the Indian Penal Code and again under Section 104 of the Insolvency Act. This imaginary terror makes as little impression on me as I conceive it did on the mind of the legislature which enacted the Insolvency Act.

16. For these reasons I am of opinion that the Magistrate was right in deciding that he could proceed with the complaint.


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