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The Official Assignee of Madras Vs. E.V. D'Silva (03.09.1941 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1941Mad906; (1941)2MLJ591
AppellantThe Official Assignee of Madras
RespondentE.V. D'Silva
Excerpt:
- - ) who held that the objection was well founded and set aside the master's order. the section is clearly a bar in such a case. the court might or might not pass such order, but unless the circumstances were exceptional, we consider that it might very well refuse to do so in view-of the principle embodied in section 60 of the insolvency act and section 60 of the code of civil procedure that small salaries should not be attached......of the army or navy or of the royal indian navy or a person in the civil service of the crown, the official assignee shall receive for distribution amongst the creditors so much of the insolvent's pay or salary liable to attachment in execution of a decree as the court may direct. section 60 of the code of civil procedure provides inter alia that the salary of a public officer shall not be attachable to the extent of the first rs. 100 and one half the remainder of his salary. it has for many years been the practice of the official assignee of madras in all the cases where the assets are insufficient to meet the debts due to the creditors to ask the court to order an insolvent who is a public servant to pay over to him part of his salary for the benefit of the creditors. the applications.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. Section 60, Sub-section (1) of the Presidency Towns Insolvency Act, states that, where an insolvent is an officer of the Army or Navy or of the Royal Indian Navy or a person in the Civil Service of the Crown, the Official Assignee shall receive for distribution amongst the creditors so much of the insolvent's pay or salary liable to attachment in execution of a decree as the Court may direct. Section 60 of the Code of Civil Procedure provides inter alia that the salary of a public officer shall not be attachable to the extent of the first Rs. 100 and one half the remainder of his salary. It has for many years been the practice of the Official Assignee of Madras in all the cases where the assets are insufficient to meet the debts due to the creditors to ask the Court to order an insolvent who is a public servant to pay over to him part of his salary for the benefit of the creditors. The applications and the orders passed thereon have not been limited to public servants in enjoyment of salaries in excess of Rs. 100 per mensem and many orders have been passed by consent when the salary has been far below this figure. The Official Assignee applied to the Master for an order against the respondent (who was adjudicated insolvent on the 23rd November, 1939) directing him to pay out of his monthly salary of Rs. 60 the sum of Rs. 6 for distribution to his creditors. The respondent who is a clerk in the Public Works Department objected to the proposed order, but, notwithstanding his objection, the Master directed that he should out of his salary pay to the Official Assignee monthly a sum of Rs. 5. The respondent appealed from the order of the learned Master to the learned Judge sitting in Insolvency (Krishnaswami Aiyangar, J.) who held that the objection was well founded and set aside the Master's order. This appeal is from the order of the learned Judge.

2. By virtue of Section 17 of the Presidency Towns Insolvency Act, on adjudication an insolvent's property vests in the Official Assignee. Section 52 provides that the property owned by an insolvent at the time of his adjudication and property which he has acquired subsequently, but before his discharge, shall be divisible among his creditors. It is common ground that apart from Section 60 there is no statutory provision which enables an Official Assignee to acquire a right in an insolvent's future earnings by way of salary. Of course once his salary has been paid over to him the money comes within the category of after acquired property. There is, however, no obligation on the part of an insolvent to deliver to the Official Assignee property acquired by him after his adjudication, unless called upon by the Official Assignee to do so.

3. Section 60 has been inserted to enable the Official Assignee to obtain what is known as a 'prospective order', but he cannot obtain such an order when the salary of the insolvent falls below Rs. 100 per mensem. The section is clearly a bar in such a case. In answer to a question put by the Court, Mr. K. V. Ramachandra Aiyar on behalf of the Official Assignee stated that the order which was passed by the learned Master against the insolvent must be deemed to have been passed under Section 60, because there is no other section under which such an order could have been passed. Therefore it was passed contrary to the provisions of the Act and rightly set aside by Krishnaswami Aiyangar, J. Of course, where an insolvent consents to an order of this nature being passed against him there is no reason why the Court should not accede to his wishes. He is merely showing that he is an honest debtor. But when he does not consent it is an entirely different matter.

4. While there can be no doubt about the correctness of the order which the learned Judge has passed, it is necessary to refer to a passage in his judgment to which special exception has been taken. The passage is as follows:

If the Official Assignee cannot intercept it at the source, it is difficult to see how he can intercept it afterwards unless it be that he or his emissaries waylay the insolvent when returning home after receiving the salary or seize it immediately thereafter while it still remains unspent in his pocket. Theoretically no doubt he may be able to do this but even then I doubt whether the law will permit him to do so, for it seems to me that it is against the fundamental principle underlying Section 60 of the Insolvency Act and Section 60 of the Code of Civil Procedure to allow him to seize any portion of an insolvent's salary which is below the attachable limit, as such a limit appears to my mind to have been fixed on public grounds to ensure the proper and efficient discharge of duty by a public servant.

5. In view of these remarks it is perhaps necessary to carry the matter a little further. Section 60 is a section which enables the Official Assignee to get a prospective order. It is an enabling section and nothing more, and the aid which it gives the Official Assignee is limited. The section does not, however, interfere with the provisions of Section 52 of the Act. The salary received by a public servant, though it be below Rs. 100 per mensem, becomes, as we have already pointed out, his property when paid to him and therefore falls within Section 52. In these circumstances it would be open in law to the Official Assignee to apply after the salary has been received for an order directing a portion of it to be paid over to him for the benefit of the creditors, but by the time such an application came on for hearing probably all the salary would have been spent. The Court might or might not pass such order, but unless the circumstances were exceptional, we consider that it might very well refuse to do so in view-of the principle embodied in Section 60 of the Insolvency Act and Section 60 of the Code of Civil Procedure that small salaries should not be attached.

6. The appeal fails and will be dismissed, but we make no order as to costs.


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