Skip to content


Yoosuf Maulvi Vs. Official Assignee and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Contempt of Court
CourtChennai High Court
Decided On
Case NumberPetn. No. 29 of 1955 and Appln. No. 295 of 1956
Judge
Reported inAIR1959Mad484
ActsMadras High Court Original Side Rules - Order 21, Rules 1 and 2; Presidency Towns Insolvency Act, 1909 - Sections 33 and 33(4)
AppellantYoosuf Maulvi
RespondentOfficial Assignee and anr.
Appellant AdvocateA. Satyanarayana, Adv.
Respondent AdvocateOfficial Assignee, ;M.P. Subramaniam and ;V. Devanathan, Advs.
Cases ReferredDwijendra Krishna v. Surendranath.
Excerpt:
.....of was to be carried out. so that in this case when the insolvent failed to attend at the official assignee's office in accordance with the order of the official assignee, he failed to perform a duty imposed upon him by the section and he was guilty of a contempt of court. ) have been framed has been satisfied in the present case. devanathan contended were right sub-section (4) would fail of the purpose for which it is enacted. 397. that was an appeal against, the refusal of the county court judge to commit the debtor to prison upon the ground that the proper process was by attachment against the defaulting debtor and that it was necessary to the process of attachment under the county court rules, 1903, that the person so proceeded against should have been personally served with..........m. mohideen, was adjudged insolvent on 24-3-1955. during his examination before the learned deputy official assignee, the insolvent stated that he had purchased a piece of vacant land, no. 29-b, fakir sahib street, royapuram, for rs. 600, that he had put up a superstructure thereon costing rs. 4,000, and that on 27-2-1954 he had sold the property to one mrs. agnes sebastian for rs. 4,000.2. on 5-5-1955 one yoosuf moulvi who had obtained a decree against the insolvent in s.c.s. no. 2989 of 1954 for a sum of about rs. 1,500 took out an application for a direction to the insolvent to render an account of the moneys in his hands on the date of his insolvency. the case of the applicant was that even on the admission of the insolvent he should have had in his hands a sum of rs. 2,100 out of.....
Judgment:

Balakrishna Ayyar, J.

1. On a petition which he himself filed, M. Mohideen, was adjudged insolvent on 24-3-1955. During his examination before the learned Deputy Official Assignee, the insolvent stated that he had purchased a piece of vacant land, No. 29-B, Fakir Sahib Street, Royapuram, for Rs. 600, that he had put up a superstructure thereon costing Rs. 4,000, and that on 27-2-1954 he had sold the property to one Mrs. Agnes Sebastian for Rs. 4,000.

2. On 5-5-1955 one Yoosuf Moulvi who had obtained a decree against the insolvent in S.C.S. No. 2989 of 1954 for a sum of about Rs. 1,500 took out an application for a direction to the insolvent to render an account of the moneys in his hands on the date of his insolvency. The case of the applicant was that even on the admission of the insolvent he should have had in his hands a sum of Rs. 2,100 out of the sale consideration Rs. 4,000. The learned Official Assignee filed a report in which he stated that as there was no money to the credit of the estate it was not possible for him to take out an application against the insolvent's wife and also against the insolvent for rendition of accounts.

3. The insolvent filed a counter in which he stated inter alia that as his creditors put pressure upon him he sold the house and used the money he thus obtained to discharge various debts of his. The allegation that he had on hand Rs. 2,100 is not at all true.

4. I enquired into this matter and on 3-9-1956 recorded the finding that the insolvent had failed to account for a sum of Rs. 2,490.

5. I also made a direction requiring the insolvent to bring back the money into Court. He was given four weeks to comply with the order. This order was not complied with, but, further time was granted and on 5-11-1956 more time was asked for to bring in the money. The matter was adjourned to 3-12-1956 and even on that date the money was not brought in. So, on that date I issued the following notice to the insolvent ;

'Notice to the insolvent M. Mohideen. On 5-4-1956 the learned Official Assignee took out Application No. 295 of 195G for an order directing you to render an account of the moneys in your hands at the time of the insolvency.

After hearing you an order was made in this Court on 3-9-1956 directing you to bring back the sums specified in that order and deposit them into Court. You were given four weeks time to do so. Further time was granted and, on 5-11-1956 more time was asked for to bring in the money. The matter was adjourned to this dale. Still you have not brought in the money.

You are hereby required to show cause why you should not be committed for contempt of this Court's order under Section 33(4).

Adjourned to 5-12-1956,'

6. On 5-12-1956 time to submit an explanation was asked for on behalf of the insolvent and the matter was adjourned to 17-12-1956. On 17-12-1956 the insolvent submitted an explanation in which the following points were taken :

1. The mandatory provisions of Order 21, Rule 2 of the Original Side Rules have not been compliedwith in the present case and in consequence the notice and all further proceedings based thereon are irregular and void. .

2. An order for payment of money does not come within the provisions of Section 33, Clause (4) of the Provincial Insolvency Act,

3. Under that section it must be found that the property referred to therein is in the possession and control of the insolvent at the time the order is made.

4. An order for the payment of money can be enforced only by proceedings in execution and no proceedings can be taken for contempt.

5. It must also be shown that the disobedience is willful before contempt proceedings can be taken.

The respondent is a pauper and has no means to pay the amount in question.

7-8. The first argument which Mr. Devanathan, the learned advocate for the insolvent, urged, was this. Sub-section (1) of Section 90 of the Presidency Towns Insolvency Act enacts,

'In proceedings under this Act the Court shall have the like powers and follow the like procedure as it has and follows in the exercise of its ordinary original civil jurisdiction.'

By reason of this provision Order XIX (XXI?) of the Original Side rules relating to contempt of Court is made applicable to the present case. Rule 1 of that order requires that every application for the punishment of any person for contempt shall be made to the Court, and every notice of such application shall contain the specific ground upon which the application is founded. Rule 2 requires that the application together with a copy of the order which is sought to be enforced, and a list of the affidavits intended to be used shall be personally served upon the person in contempt. In the present case, said Mr. DevaNathan, the provisions of these two rules have not been complied with and in consequence there can be no valid order made against the insolvent.

9. In respect of this argument the learned Official Assignee pointed out -- and I think quite correctly -- that it ignores the proviso to the first subsection of Section 90 of the Presidency Towns Insolvency Act. That proviso runs :

'nothing in this sub-section shall in any way limit the jurisdiction conferred on the Court under this Act.'

Order XIX (XXI?) of the Original Side Rules cannot, therefore, be read as in any way reducing or curtailing the jurisdiction conferred on the Court by the Insolvency Act. In this connection the learned Official Assignee referred to the decision in Bhuramull Banka v. Official Assignee, Bengal. ILR 47 Cal 56: AIR 1920 Cal 395. In that case the insolvent appeared before the Official Assignee on 9-4-1919 and was examined by him with regard to his property, estate books and papers. At the conclusion of the examination the Official Assignee verbally ordered the insolvent to attend personally the former's office daily, and to make a list of the bonks belonging to his estate which had been removed to the Official Assignee's office.

Certain other directions were also given to him. This order was disobeyed. Thereupon the Official Assignee on 6-5-1919 served on the insolvent a notice of an application for contempt. On 9-5-1919 copies of the affidavit intended to be used were sent by the Official Assignee to the insolvent. On 10-5-1919 the Official Assignee filed the notice of application and the affidavits in support thereof. On 13-5-1919 the matter came on for hearing and was adjourned on the application of the insolvent. On 15-5-1919 the insolvent affirmed his affidavit in reply and on 16-5-1919 Rankin J. heard the matter and directed thatthe insolvent be committed to jail for contempt.The insolvent appealed. The learned counsel for the insolvent raised a number of points :

'The insolvent should not have been committed to prison on those grounds for the following reasons : first, there was no order of Court in connection with any of these matters. Secondly, the order was not served personally on the insolvent. Lastly, no time was mentioned within which the order complained of was to be carried out. Where it was intended to make an order for contempt the order of which there was a breach should have been made in writing and served on the insolvent personally.'

10. In reply, counsel for the respondent pointed out that the appropriate section of the Presidency Towns Insolvency Act did not require the order to be in writing, nor did it requite that at the first instance the Official Assignee should come to Court for an order and then notice should be given. As to personal service of the order, the order was given verbally to the insolvent and no question of personal service would arise.

11. The appeal was dismissed. Sanderson C. J. observed:

'The first reason alleged was that the orders of the Official Assignee were verbal and as such were not sufficient basis for committal. It was argued that if the insolvent did not attend, in pursuance of the order made by the Official Assignee on the 9th April referred to in ground 2 of the notice, the Official Assignee should have applied to the Court for an order for the insolvent's attendance, that the Court's order should have been in writing, that it should have been served personally on the insolvent, that it should have contained a notice that unless he complied with it he would be committed for contempt, and that the insolvent could not be committed unless the above procedure had been carried out.' And then, on page 63 (of ILR Cal): (on p. 396 of AIR), he observed : 'There is nothing in the section to show that an order of the Official Assignee to attend his office in pursuance of Section 33(2)(c) must be in writing. Consequently, the order given verbally on the 9th April was a valid order and there was then a duty upon the insolvent to comply with the order. This section further provides in Sub-section (4) that if the insolvent willfully fails to perform the duties imposed upon him by the section, he shall, in addition to any other punishment to which he may be subject, be guilty of a contempt of Court and may be punished accordingly. So that in this case when the insolvent failed to attend at the Official Assignee's office in accordance with the order of the Official Assignee, he failed to perform a duty imposed upon him by the section and he was guilty of a contempt of Court.'

12. See also the passage on page 64 (of ILR Cal): (on p. 396 of AIR) quoted below. This seems sufficient to dispose of the argument that in respect of proceedings for contempt under the Presidency Towns Insolvency Act the procedure prescribed by Order XIX (XXI?) of the Original Side Rules should be followed.

'Consequently, in my judgment, having regard to the terms of the section, there was no need for the Official Assignee to pursue the procedure indicated above, which the learned counsel for the appellant urged, was necessary, before proceedings for contempt could be properly taken.'

Woodroffe, J. was also of the same view :

'The contention that a written order of the Court was necessary which order had to be served On the appellant in practice, amounts to this that if the orders of the Official Assignee are repeatedly disobeyed and then an order is made by the Court whichis obeyed, no punishment by way of contempt can follow under the Act upon the repeated disobedience, though according to the Act the offence is complete immediately the Official Assignee's directions are disobeyed. It would be possible in this way to delay, and to some extent to defeat, the insolvency proceedings. In my opinion, no order in writing was requisite either from the Official Assignee or from the Court, though as regards the former it may be, as the learned Chief Justice has pointed out, desirable for the Official Assignee to put his directions into writing.'

I would next remark that the procedure laid down in Order XIX (XXI?) would apply only where an application is taken out by a party and would not in terms apply where the Court itself directs the issue of a notice. It will also be appreciated that the purpose of the requirement of these rules is to enable the person sought to be proceeded against to know what the accusation against him is, what the facts are on the basis of which the accusation is founded and what the material is on the basis of which, the accusation is preferred. In the present case the insolvent is in possession of all the relevant facts.

In Application No. 295 of 1956 in which the order was made requiring him to bring the money into Court he filed not only a counter hut also examined himself as a witness. After this order was made he was given four weeks time to bring in the money. Some more time was asked for and that was granted. On 5-11-1956 more time was asked for and that too was granted. The notice requiring him to show cause was explained to him in Court and also served on him in person. Therefore, the purpose for which the rules in Order XIX (XXI?) have been framed has been satisfied in the present case.

13. Mr. Devanathan next argued that in the present case the insolvent has been ordered to bring in a certain amount of money and that an order for payment of money is outside the scope of Section 33(4) of the Presidency Towns Insolvency Act. That subsection runs as follows:

'If the insolvent willfully fails to perform the duties imposed upon him by this section, or to deliver up possession, to the Official Assignee of any part of his property, which is divisible amongst his creditors under this Act and which is for the time being in his possession or under his control, he shall, in addition to any other punishment to which he may be subject, be guilty of a contempt of Court, and may he punished accordingly.'

Mr. Devanathan argued that the words used in the section are 'deliver up possession' and that the expression 'deliver up' is inappropriate in relation to money. Now, what the section requires is that the insolvent should 'deliver up possession of any part of his property.' The word 'property' is certainly large enough to include money. In fact there are many people who consider money to be the most desirable form of properly. I am unable to accept the contention that the expression 'deliver up possession' of property excludes money. If the view for which Mr. Devanathan contended were right Sub-section (4) would fail of the purpose for which it is enacted.

14. Mr. Devanathan next contended that an order for payment of money cannot be enforced by contempt proceedings and that where a person fails to pay money all that can be done is to levy execution against him. In support of this argument he cited Dwijendra Krishna v. Surendranath. : AIR1927Cal548 . It is no doubt true that on page 552 this observation appears,

'Willful disobedience to a judgment or order requiring a person to do any act other than the payment of money or abstain from doing Anything, isa contempt of court punishable by attachment on committal.'

But, when the facts of the case are examined it will be found that this statement is obiter. In that case the order alleged to have been contravened was not even in existence on the date of the alleged contempt. On page 552 it is stated :

'The rule, we are dealing with, was issued on 18-11-1926, when there was no order upon the opposite parties relating to the collection papers On this simple ground they cannot be dealt with for there could he no contempt in respect of an order which was not in existence on that date.'

Normally where there is an order for payment of money a court leaves it to the person interested to take out execution and it will not ordinarily permit him to invoke the jurisdiction of the court relating to contempt. But, the procedure relating to execution would not ordinarily be available where the person proceeded against has been adjudicated insolvent and his estate has vested in the Official Assignee. To say that an order for the payment of money made against an insolvent by court can be enforced -- whatever the circumstance may be --only by proceedings in execution would be tantamount to saying that no such order can in practice be executed.

15. That even orders For payment of money can be enforced by contempt proceedings will appear from the decision in In re Pickard, ex parte, Official Receiver, 1912 1 K. B. 397. That was an appeal against, the refusal of the county court Judge to commit the debtor to prison upon the ground that the proper process was by attachment against the defaulting debtor and that it was necessary to the process of attachment under the county court rules, 1903, that the person so proceeded against should have been personally served with a sealed copy of the order which he is alleged to have disobeyed with a notice endorsed upon it warning him of the consequences of disobedience. Before the appellate court it was contended on behalf of the debtor that a motion to commit was not the appropriate process in that case. On behalf of the Official Receiver it was contended that the county court Judge had jurisdiction to enforce an order made under Section 53, Sub-section 4 by committal. The court observed :

'In my opinion the contention of the Official Receiver is correct. In the first place, the order under Section 53. Sub-section 2 seems to me to be an order made 'in relation to the debtor's property and the distribution of the proceeds amongst his creditors within the meaning of Section 24, Sub-section 2, and was therefore enforceable by committal under sub-s. 4. J am aware that the salary in question is not property which passes absolutely and directly to the trustee in Bankruptcy; it is property which, as pointed out in In re Huggins ex parte Muggins, (1882) 21 Ch. D. 85, can be dealt with by the court, upon the application of the trustee, under Section 53, Sub-section 2, for the benefit of the creditors. It is, nevertheless, property of the bankrupt in the general sense and may well be covered by Section 24.

If, however, Section 24 is not wide enough to cover it, there remains the general jurisdiction of the county court sitting in bankruptcy, which, by Section 100 of the Act, has all the powers and jurisdiction of the High Court, to enforce obedience tc its orders by committal. The case of In re Hooley. (1898) 5 Manson 331, affords a useful illustration as to the power of the High Court sitting in bankruptcy to punish contempt of court by committal, Disobedience of an order of the High Court in bankruptcy can only, so far as I can see, be punishable by committal. I see no provision either for the Bankruptcy Acts or in the Bankruptcy rules for the exercise of the power of attachment. But even if the order may be enforced by attachment, it can none the less be enforced by committal.'

16. Mr. Devanathan next argued that before the insolvent can be punished by committal under Section 33, it must be shown that at the time the order is made the insolvent is in possession of money and that his refusal to bring in the money is willful. This is no doubt true enough but it does not help the insolvent in the present case because it was found as a result of the enquiry made in Appln. No 295 of 1955 that the insolvent had failed to account for a sum of Rs. 2490. This is equivalent to finding that he was retaining the money. There was also a direction requiring him to bring in the money into court. In effect and substance, therefore, there is a finding that he had the money. When it is shown that a person was in possession of money on a certain date and he does not give an explanation which can be believed about the disposal of that money, the reasonable inference is that he continues to be in possession of the money.

It is not the case of the insolvent that this money was stolen or lost or expended since the order was made. Mr. Devanathan stated on behalf of his client that he is not in possession of any money. Such a statement is easily made, but, I do not believe it. I certainly agree with Mr Devanathan that if a person is unable to pay his failure to pay cannot be said to be willful. In the present case I have no doubt that the insolvent did have the money and is now sitting tight on it. When a person does that, his refusal to bring in the money can only be said to be willful.

17. As the insolvent has disobeyed the order of the court he will be committed to jail for six months.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //