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Briji Kessoor Laul and anr. Vs. the Official Assignee of Madras - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Judge
Reported in52Ind.Cas.979; (1919)37MLJ244
AppellantBriji Kessoor Laul and anr.
RespondentThe Official Assignee of Madras
Excerpt:
presidency towns insolvency act (iii of 1909), section 21 - 'payment in full,' meaning of-discharge of debts, whether payment--annulment of adjudication. - - 616 this cannot be said to be a case in which the debtor ought not to have been adjudged insolvent, for the adjudica-tion was made on his own application and clearly he was unable to pay his debts. but then it is urged that we must treat it as a composition under section 28 and pass an order annulling the adjudication under section 30. clearly, however, it is not a case of composition within the meaning of the act. then it is said that we have a sort of general discretion to annul an order of adjudication if we are satisfied that the conduct of insolvent has not been in any way fraudulent or dishonest......l.b. 748 : 38 b.k 200 in re: shivlal rathi 40 ind. cas. 207 : 19 bom. l.r. 365, flatau, in re, official receiver, ex parte (1893) 2 q.b. 219; 62 l.j.q.b. 569 : 41 w.r. 629 : 10 morrell 161 izod, in re, official receiver, ex parte (1898) 1 q.b 241 : 67 l.j.q.b. 111 : 77 l.t. 640 46 w.r. 304 : 4 manson 343 : 14 t.l.r. 115 hester, in re,. hester, ex parte (1889) 22 q.b.d. 632 : 60 l.t. 943 : 6 morrell 85 and keet, in re, official receiver, ex parte (1906) 2 k.b. 666 : 74 l.j.k.b. 694 : 93 l.t. 259 54 w.r. 20 : 12 manson 235 : 21 t.l.r. 616 this cannot be said to be a case in which the debtor ought not to have been adjudged insolvent, for the adjudica-tion was made on his own application and clearly he was unable to pay his debts. but then it is urged that we must treat it as a.....
Judgment:

1. The insolvent arranged with his creditors by paying them four annas in the rupee that they should give him a receipt in full discharge of their debts. It has been ruled both in England and India that such a payment is not 'payment in full' within the meaning of Section 21 of the Presidency Towns Insolvency Act corresponding to Section 35 of the English Bankruptcy Act see Subrati Jan Mahomed In Re: 20 Ind. Cas. 859 : 16 Bom. L.B. 748 : 38 B.K 200 In Re: Shivlal Rathi 40 Ind. Cas. 207 : 19 Bom. L.R. 365, Flatau, In re, Official Receiver, Ex parte (1893) 2 Q.B. 219; 62 L.J.Q.B. 569 : 41 W.R. 629 : 10 Morrell 161 Izod, In re, Official Receiver, Ex parte (1898) 1 Q.B 241 : 67 L.J.Q.B. 111 : 77 L.T. 640 46 W.R. 304 : 4 Manson 343 : 14 T.L.R. 115 Hester, In re,. Hester, Ex parte (1889) 22 Q.B.D. 632 : 60 L.T. 943 : 6 Morrell 85 and Keet, In re, Official Receiver, Ex parte (1906) 2 K.B. 666 : 74 L.J.K.B. 694 : 93 L.T. 259 54 W.R. 20 : 12 Manson 235 : 21 T.L.R. 616 This cannot be said to be a case in which the debtor ought not to have been adjudged insolvent, for the adjudica-tion was made on his own application and clearly he was unable to pay his debts. But then it is urged that we must treat it as a composition under Section 28 and pass an order annulling the adjudication under Section 30. Clearly, however, it is not a case of composition within the meaning of the Act. There was no proposal, so far as we can gather, from the materials placed before us, for a composition to be submitted to the Court and we do not find that the Court, proceeding as directed by Sections 28 and 29, approved of any such proposal. It is only when the Court has approved of a proposal for composition properly Submitted to it that it nifty annul the adjudication. Then it is said that we have a sort of general discretion to annul an order of adjudication if we are satisfied that the conduct of insolvent has not been in any way fraudulent or dishonest. But even supposing there was such a general discretion, on which question we have not been referred to any decision, the Court had no opportunity of examining the insolvent in this connection so as to form a proper conclusion as to his conduct. The petitioner seems to have misconceived his remedy, for he proceeded to present an application for withdrawal of the petition, and he also seems to have been under the impression that it was enough for his purpose if he could get his creditors to give him a discharge for their debts. That is not sufficient in law, as has been pointed out in all the oases referred to.

2. We must, therefore, dismiss the insolvent's appeal. It will be open to him to make a proper application before the Insolvency Court.

3. The Official Assignee will be entitled to the costs of the appeal oat of the estate.


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