1. The petitioner was declared insolvent. Alter his secured creditors had been satisfied, nothing remained to pay anything at all to any of the unsecured creditors, with the result that none of the creditors shown in the Schedule took the trouble to prove their debts, with the exception of his own deserted wife and her son. When the petitioner applied for discharge, the learned District Judge expressed an opinion on the very scanty materials before him (the official Receiver's report was necessarily very bare, for he had no funds for conducting a minute inquiry into the causes which led the petitioner to have no assets remaining for distribution to his creditors) that the petitioner had been secreting some of his property and so did not accept his evidence with regard to his present status and to the sum received by him. He therefore passed this order:
The petitioner will be granted an order of final discharge, at the end of 18 months from now, if he is shown to have paid a sum of Rs. 10 per mensem by the 10th of each month, to the Official Receiver, for the benefit of his creditors. If he defaults, with regard to any one instalment, this conditional order of discharge will stand cancelled, and his adjudication will be annulled.
2. One or two technical objections have been taken to this order as well as an objection on the ground of its unreasonableness,. In the first place, there is no provision in the Act for annulling an adjudication in case the conditions imposed on the conditional order of discharge are not complied with; and Mr. Viyyanna for the respondent has no objection to this part of the order being deleted. Then again, it is pointed out that Section 41(2) provides three alternatives types of order that the Insolvency Court can pass; and the use of the word ' or ' between (a), and (b)and(b) and (c) indicate that these are strict alternatives and that a mixed order combining the kinds of order contemplated in the several sub-sections is not permissible. The order passed by the learned Judge purports to suspend the order for 18 months under Section 41(2)(b) and at the same time to impose conditions under Section 41(2)(c). Much the same effect, however, can be obtained by drafting an order under Section 41(2)(c).
3. Although there was necessarily very little material before the Court, because nobody was interested in placing the material before the Court; yet the insolvent must have continued trading after he was in insolvent circumstances; otherwise he would not have been reduced to such a sorry state as to have no assets at all for distribution amongst his unsecured creditors. Moreover, he certainly did not place before the Court any material by which the Court could be satisfied, as it has to be satisfied under Section 42(1)(a) before it can grant an absolute discharge, that the fact that the asssets were not equal to eight annas in the rupee on the amount of his unsecured liabilities had arisen from circumstances for which he could not justly be held responsible. That being so, the Court was bound to refuse to grant an absolute order of discharge.
4. If the Court elected to pass an order under Section 41(2)(c), the only question that remains is whether the conditions imposed by the learned Judge were reasonable. The fixing of the terms was a matter for discretion of the lower Court; and this Court will not interfere unless it considers that those terms were grossly unreasonable. If I were satisfied that the petitioner would not be able to earn more than Rs. 15 a month, then it certainly would be most unreasonable to expect him to pay Rs. 10 a month towards his debts leaving only Rs. 5 a month for himself to meet the expenses of himself and of his second wife and children; but we have only the word of the insolvent that that is what he is likely to earn. I do not therefore find sufficient material for setting aside that part of the order of the District Judge which requires the petitioner to pay Rs. 10 a month for 18 months.
5. For the reasons given above, the final order will have to be modified and will be passed in these terms:
The petitioner is granted an order of discharge subject to his paying Rs. 10 a month by the 10th of each month to the Official Receiver for the benefit of his creditors for a period of 18 months.
6. The observations contained in the former paragraphs do not mean that the Court is helpless if the petitioner fails to observe the conditions of his discharge. The petitioner will pay the costs of the respondent.