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In Re: Naoroji Sorabji Talati - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberNos. 200 and 1907 of 1907
Judge
Reported in(1908)10BOMLR965
AppellantIn Re: Naoroji Sorabji Talati
Excerpt:
.....the court for the relief of insolvent debtors at bombay, it can order the movable property of the firm in shanghai to be vested in the official assignee of the insolvent debtor's court in bombay and the court can order the person in possession of the property at shanghai to hand over such property to the official assignee in bombay.;if the person in possession at shanghai is a british subject, he is subject to the insolvent jurisdiction of the consulate court at shanghai and that court can order him if requested so to do by the insolvent court of bombay to produce all the movable property, books, papers and documents of the insolvents' firm that may be in his possession.;a commission can be issued by the court for the relief of insolvent debtors at bombay for the examination of a..........all that i am concerned with in this case. in my opinion therefore the property of the insolvents' firm in shanghai vested in the official assignee of the insolvent debtors court in bombay.13. the question then arises can this court order m.p. talati to hand over such property to the official assignee in bombay, in my opinion it can, for section 118 of the english bankruptcy act is a reproduction of section 74 of the bankruptcy act 1869 and the judicial committee have held that that applies throughout the british dominions. see callender sykes and co. v. colonial secretary of lagos and davies [1891] a.c. 460.14. m.p. talati is a british subject, he is subject to the insolvent jurisdiction of the consulate court at shanghai and therefore in my opinion that court can order him if requested.....
Judgment:

Russell, J.

1. An important question arises on each of these rules which were argued before me on Wednesday last parti' cularly having regard to the fact that it has been suggested that the proposed New Insolvent Act for Presidency Towns in India shall not be an Imperial Statute.

2. For if I am right in the conclusions I have arrived at it is highly desirable that the Insolvent Act for Presidency Towns should continue to be an Imperial Statute.

3. On the 4th March 1908, M. P. Talati was called on to show Cause why he should not deliver to the Official Assignee of Bombay goods of the value of fifteen lacs, belonging to the Insolvent's Firm now in his possession, or the sale proceeds thereof, under Section 26 of the Indian Insolvent Act.

4. On the game day the same person was ordered to attend the Court for examination under Section 36 and on 15th April 1908 he by his constituted attorney took out a rule calling on the ppposing creditor to shew cause why that order should not be set aside.

5. It appears that a firm comprising N.S. Talati, D. S. Talati and Hujarimal Multanchand filed their petition in this Court on the 29th April 1907 and on that day the usual vesting order was made. M. P. Talati was a partner in that firm and left Bombay for Shanghai in October 1906. Since then he has been carrying on the firm's business at Shanghai. M. P. Talati presented a petition to this Court to be declared insolvent but it was held that this Court had no jurisdiction to entertain it: see Re Manekji Pestonji Talati 1).

6. From the power of attorney put in at the argument before me it appears that M. P. Talati is a British subject and it is stated on the opposing creditor's affidavit and not denied that there is at Shanghai ' a British Consulate (sic-evidently intended for 'Consular') Court which has jurisdiction in insolvency and jurisdiction over M. P. Talati. It also appears on the rule and order of the 4th March that they were served on M. P. Talati through ' H. B. M's Supreme Court for China and Korea at Shanghai.'

7. The first question I propose to discuss is whether this Court can order M. P. Talati to deliver over the goods of the firm to the Official Assignee of Bombay. I. deal hereafter with the question whether he has any of such goods in his possession in fact.

8. The Act for Relief of Insolvent Debtors in India is an Imperial Statute, and it must be borne in mind that ' the jurisdiction of such Bombay Court' (and for this purpose an Insolvent Court stands on the same footing) is partly local and partly imperial, the imperial nature of the jurisdiction consists in this, that the powers of the Bombay Courts to discharge debtors from their debts extend to all debts wherever contracted; that is to say, the discharge of a debtor by a Court exercising Bankruptcy jurisdiction in England will discharge a debt contracted by a debtor in one of the colonies or colonial states or in India and the provisions as to the vesting of property in the officer appointed to collect and distribute it extend all over the empire ; so that, when a man is made bankrupt by a Bankruptcy Court in England, property which, he has in the colonies or colonial States or in India will become distributable by the English Trustees in. the bankruptcy, who can enforce his title to it.' Vol. II, Laws of England by Lord Halsbury, title : Bankruptcy and Insolvency, p. 6 and cases there referred to.

9. By Section 7 of the Indian. Insolvent Act all the property of the insolvent whether within the limits of the Charter of the East India Company or without vests in Official Assignee.

10. Section 26 of the Indian Insolvent Act would appear to be supplemental to Section 7 for it would be certainly anamolous for one section to vest all the insolvent's property wherever situate in the Official Assignee and the Act not to contain a section empowering the Official Assignee to get hold of such property.

11. Now in re Ganeshdas : (1908)10BOMLR77 , it was held that the Court for the Relief of Insolvent Debtors sitting in Bombay had jurisdiction to make an order under Section 26 of the Indian Insolvent Act against a person residing outside the Bombay Presidency. The order asked for there was against a person residing at Amritsar. It will be observed that the Court expressly confined itself to the question before it, i. e., whether the property was situate in British India. But it is generally clear that Mr. Inverarity who argued the case for the successful appellants also put the case on the higher ground that the Insolvent Court would make an order as to the property of the insolvent wherever situate within the British Dominions. His argument was :

Coming to Section 26 of the Act it will appear that its wording is very general. It says, 'that in case any person shall, after any such insolvent shall have petitioned for his discharge... be possessed of or have under his power or control any property whatsover of such insolvent... it shall be lawful for the said court further to order such person to deliver over such property... to the assignee etc.' The section thus says ' any person' and not 'a person residing within the limits of the tow and island of Bombay.' Where an act of Parliament is in general terms it applies to all countries in the British Dominion where the Imperial Parliament could legislate. See Callendar Sykes & Co. v. Colonial Secretary of Lagos and Davies, where it is said 1891 A. C 466-' If a consideration of the scope and object of statute leads to the conclusion that the legislature intended to affect a colony, and the words used are calculated to have that effect, they should be so construed.' And further at p. 467 : 'It is a much more reasonable conclusion that the framers of the Act considered that in using general terms they were applying their law wherever the Imperial Parliament had power to apply it : and their Lordships hold that there is no good reason why the literal construction of the words should be cut down so as to make them inapplicable to a colony.' : (1908)10BOMLR77 .

12. The Court of Appeal did not express any disagreement with this argument. Prom this I take it that in this respect the effect of the Indian Insolvent Act is the same as the Bankruptcy Acts in England, Scotland and Ireland under which it is clear that the moveables of the Bankrupt whether in England or elsewhere become vested in the trustee or the representative of the creditors. In Story on the Conflict of Laws, pp. 333 and 443 (1896), I say ''moveables' advisably as they are all that I am concerned with in this case. In my opinion therefore the property of the insolvents' firm in Shanghai vested in the Official Assignee of the Insolvent Debtors Court in Bombay.

13. The question then arises can this Court order M.P. Talati to hand over such property to the Official Assignee in Bombay, In my opinion it can, for Section 118 of the English Bankruptcy Act is a reproduction of Section 74 of the Bankruptcy Act 1869 and the Judicial Committee have held that that applies throughout the British Dominions. See Callender Sykes and Co. v. Colonial Secretary of Lagos and Davies [1891] A.C. 460.

14. M.P. Talati is a British subject, he is subject to the Insolvent Jurisdiction of the Consulate Court at Shanghai and therefore in my opinion that Court can order him if requested so to do by the Insolvent Court of Bombay to produce all the moveable property, books, papers and documents of the insolvents' firm that may be in his possession.

15. In England such an order would be of course-see in re Levy's Trusts (1885) 30 Ch. D. 119 subject to the law applicable in Shanghai; E. P. Bogers (1881) 16 Ch. D. 665.

16. Although on the affidavits before me it is not possible for me to hold that he has got in his possession property of the value of fifteen lacs of rupees still from the fact of his having presented his petition in insolvency in this Court it is impossible to suppose that he has in his possession none of the moveables, account books, etc., of the firm in which he was a partner. I allowed the rule to be amended in this respect.

17. The opposing creditor must therefore make an application for such a request to be sent to H. B. M.'s Supreme Court at Shanghai, the terms of which must be submitted to me.

18. Now as to the order for the examination of the said M. P. Talati I am of opinion that the order can and should be made. ' Every British Court with jurisdiction in bankruptcy or insolvency is bound to act in aid of and be auxiliary to each other in bankruptcy matters and an order of the Court seeking aid with a request to the Court whose aid is sought will be sufficient authority to the latter Court to enable it to exercise in regard to the matter of the request all the jurisdiction which either of the two Courts in question will exercise in regard to similar matters. ' Vol. II, Laws of England, Bankruptcy and Insolvency, p. 319, citing Section 118 of Bankruptcy Act 1883 and Callender Sykes & Co. v. Colonial Secretary of Lagos and Davies [1891] A.C. 460.

19. I see nothing to prevent a commission being issued by this Court for the examination of M. P. Talati and H. B. M.'s Supreme Court at Shanghai making the necessary order for his examination thereunder at the request of this Court. Of course I cannot direct M. P. Talati to come to Bombay to be examined there being no machinery for that purpose. This request to B. B. M.'s Court at Shanghai will also be submitted to me.

20. The costs of and incidental to the order and. rules will be reserved to be dealt with by the judge w,ho hears the case eventually.


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