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In Re: C. Subramanian Chetty and Sons - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1926Mad1166
AppellantIn Re: C. Subramanian Chetty and Sons
Excerpt:
- .....i have said before and repeat it now that payments made by insolvents behind the back of the official assignee or payments made by persons on behalf of the insolvent in this manner are entirely irregular and i have been caused a great deal 'of trouble in the past in consequence of this irregular procedure. no insolvent or anybody on his behalf has any right whatever to make any payments at all to creditors. the insolvent's estate vests in the official assignee and the only person who can discharge debts of the insolvent is the official assignee. this fact having come to my notice on this application i shall adjourn it and refuse to sanction the composition at this stage. the proper procedure must be adopted in this case and in every other case and the money which is said to have.....
Judgment:
ORDER

Beasley, J.

1. This is an application for the sanction of a compromise approved at the meeting of the creditors held on the 26th April 1926. Without going any further into this application, it appears that the insolvent has made payments himself to the creditors before the meeting of the creditors at which the com-' position was approved. I have said before and repeat it now that payments made by insolvents behind the back of the Official Assignee or payments made by persons on behalf of the insolvent in this manner are entirely irregular and I have been caused a great deal 'of trouble in the past in consequence of this irregular procedure. No insolvent or anybody on his behalf has any right whatever to make any payments at all to creditors. The insolvent's estate vests in the Official Assignee and the only person who can discharge debts of the insolvent is the Official Assignee. This fact having come to my notice on this application I shall adjourn it and refuse to sanction the composition at this stage. The proper procedure must be adopted in this case and in every other case and the money which is said to have been paid to the creditors must be returned to the Official Assignee. Then he will deal with it as provided in the Presidency Towns Insolvency Act. After he has done that and taken proper discharge from the creditors, I shall be prepared to consider whether this composition is to be sanctioned by the Court or not. I think that what I have said ought to be brought to the notice of the public in order that this entirely irregular procedure may be stopped as soon as possible. I do not propose to sanction any composition with creditors in which any irregular procedure has been adopted or which is the result of an irregular practice. This application will stand over.


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