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T.P. Kunhiraman Vs. Official Assignee, Madras - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberPetn. No. 69 of 1975 and Appln. No. 27 of 1982
Judge
Reported inAIR1983Mad148; (1983)1MLJ116
ActsPresidency Towns Insolvency Act, 1909 - Sections 38, 39 and 39(2)
AppellantT.P. Kunhiraman
RespondentOfficial Assignee, Madras
Appellant AdvocateG. Nandalal, Adv.
Respondent AdvocateK. Radhakrishnan, ;M. Prakash Goklaney and ;R. Sivakumar, Advs.
Excerpt:
- - no doubt while so doing he had to purchase rotten and abandoned typewriters and the like, make them fit for use on account of his skill and thereafter dispose of such machines and in the process what he obtained for his skilled labour was the margin that was left out. it is also complained that the insolvent has under his employment several others.order1. the insolvent's application for discharge though has the recommendation of the official assignee, is stoutly opposed by the two opposing creditors. the grounds of objection are (1) the insolvent has not provided even the statutory minimum of 0.25 ps. in the rupee by way of dividend. (2) the insolvent is still carrying on business, can continue to carry on business and therefore is in a position to discharge the debt if he were to be continued to be insolvent for some more time. (3) the insolvent has not maintained proper accounts. (4) the insolvent has suppressed his assets deliberately because he has got large stock of typewriters which he had not handed over to the official assignee.2. it is seen from the report filed by the learned official assignee that the stock in trade was.....
Judgment:
ORDER

1. The insolvent's application for discharge though has the recommendation of the Official Assignee, is stoutly opposed by the two opposing creditors. The grounds of objection are (1) The insolvent has not provided even the statutory minimum of 0.25 ps. in the rupee by way of dividend. (2) The insolvent is still carrying on business, can continue to carry on business and therefore is in a position to discharge the debt if he were to be continued to be insolvent for some more time. (3) The insolvent has not maintained proper accounts. (4) The insolvent has suppressed his assets deliberately because he has got large stock of typewriters which he had not handed over to the Official Assignee.

2. It is seen from the Report filed by the learned Official Assignee that the stock in trade was sold in public auction for Rs. 14,541, the unexempted household articles realised Rs. 1,767 and the insolvent's car was sold for Rs. 5, 500. As regards the lease-cum-sale agreement with the Tamil Nadu Housing Board, the insolvent's son was prepared to pay the Official Assignee a sum of Rs. 15,864, which was duly paid. Under orders of this court dated 24th Dec. 1975 the insolvent was permitted to carry on his business in servicing, and repairing typewriters, subject to the condition that he paid on an average Rs. 200 per month to the Official Assignee. He has paid the allocation till Sept. 1981. He has to pay allocation to Rs. 1,200 till March 1982.

3. The order of adjudication was made as early as on 19th Dec 1975. The law of Bankruptcy does not expect that the debtor should always be the slave of the creditors. The object is to release the debtor at the appropriate time, taking into consideration several factors referred to in S. 39 of the Presidency Towns Insolvency Act 1909.

4. Section 39 states that the court has no discretion but to reject discharge if the insolvent has committed any offence under the Act or under Ss. 421 to 424, I. P. C. That does not arise in this case. So far as the second limb of S. 39 is concerned, it is left to the discretion of this court to refuse discharge or suspend discharge for a specified time or grant conditional discharge. No doubt the court has the duty to take into consideration several factors set out in S. 39(2). It has to be noted that it is the totality of all the factors enumerated In s. 39(2) that will have an impact on the order to be passed under S. 38.

5. As regards the complaint that the insolvent has not provided 0.25 ps. in a rupee, by way of dividend. I am to state that it is one among several circumstances, the court has to take into consideration while dealing with an application for discharge. I have already pointed out that the debtor should not remain an undischarged insolvent for ever. In a case where there is a fair probabiliity of the debtor providing in a reasonable period the minimum of 0.25 ps. in the rupee as dividend the court shall hesitate in granting discharge. In the instant case, he will have to remain an undischarged insolvent almost for his lifetime if this condition were to be imposed as a general rule, for it would take 161 months to make up Rs. 32,300 at Rs. 200 per month. The above illustration gives a clue that that was not the intent of the Legislature in making that provision.

6. Though an insolvent, every man is entitled to make his living or to earn his livelihood at least to pay the monthly allocation in the interest of the creditors. In this matter the insolvent had the permission of this court in carrying out his job. He is admittedly a technician and by using his skill he was able to eke out his livelihood. No doubt while so doing he had to purchase rotten and abandoned typewriters and the like, make them fit for use on account of his skill and thereafter dispose of such machines and in the process what he obtained for his skilled labour was the margin that was left out.

7. This naturally necessitated the insolvement to either purchase the machines on credit or on borrowing and then discharge the liabilities after the sale of the machines. It cannot therefore be contended that the insolvent is dealing actually in typewriter machines. It is also complained that the insolvent has under his employment several others. In my opinion that will not stand in the way of the insolvent obtaining a discharge. While carrying out his manual as also skilled work, if it was necessary that he should have the assistance of others, certainly he must have such assistance and that is solely for eking out his livelihood. As a matter of fact, in this case, the insolvent has paid Rs. 200 on an average per month. I therefore find no substance in the above objection.

8. As regards the non-maintenance of proper accounts, the creditors had the opportunity of cross-examining the insolvent in the course of his public examination. I am informed that none of the opposing creditors even availed of the opportunity to cross-examine the insolvent at that time. It is admitted that account books were produced by the insolvent before the Official Assignee. Therefore I am not prepared to accept the objection that the insolvent had not maintained proper accounts.

9. There is no evidence that the insolvent is having a large stock of typewriters and hence this objection also cannot be entertained.

10. One other objection that was pressed into service is that the insolvent had borrowed recklessly and this has brought him to the insolvency court. Unfortunately if any needy debtor were hard pressed for a loan or did not have any creditor to lend him on easy terms, the blame cannot exclusively be laid at the doors of the insolvent alone. Even this objection does not survive.

11. In this case, the applicant was an undischarged insolvent for nearly 8 years. He has completed his 60th year and I feel it is high time that he is relieved of this stigma viewed with utmost contempt by the society at least in the evening of his life.

12. The result is the application is accepted and discharge is granted, however, subject to the condition that the insolvent deposits Rs. 1,400 within two months from this date.

Discharge granted.


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