1. Usha Charan Banerjee petitioned the learned District Judge, 24-Parganas for adjudication as insolvent. Items Nos. 1 and 3 to 9 of the list of pecuniary claims in schedule A attached to the petition are claims against him as surety for several accused persons in several criminal proceedings. The list is given in compliance with Section 13(1)(d), Provincial Insolvency Act.
2. In course of the preliminary enquiry before the order of adjudication, the State of West Bengal contended that these claims are demands in the nature of un-liquidated damages and as such are not provable in insolvency. The learned District Judge accepted this contention and directed deletion of items 1 and 3 to 9 from Schedule (a) to the petition. Usha Charan Banerjee appeals from this order with the leave of this Court.
3. Before the impugned order was made the petition for adjudication had not been disposed of and Usha Charan had not been adjudicated as insolvent.
4. The scope of the inquiry preliminary to the order of adjudication is indicated in Sections 10 and 24 of the Provincial Insolvency Act.
5. I am of the opinion that during such preliminary enquiry the insolvency Court has no power to enquire into the correctness of the particulars of the claims furnished under Section 13(1)(d) and has no power to direct deletion of any of the items included in such particulars.
6. I am also of the opinion that before making the order of adjudication the Court has no power to enquire what debts are provable in insolvency. Such inquiry is made in the course of framing of the schedule of creditors under Sections 33 and 34 after the order of adjudication is made.
7. The impugned order, therefore, is without jurisdiction and must be set aside.
8. If and when the question arises whether items 1 and 3 to 9 of Schedule (a) to the petition are debts provable in insolvency, the point must be determined with reference to Section 34, Provincial Insolvency Act read in conjunction with the provisions of Sections 514 and 514 (A), Criminal P. C., and in the light of the decision in 'Re: Pascoe', 1944-1 Ch. 310 (A), where it was held by a Divisional Court in England that a fine which a bankrupt convicted of bribery had been directed to pay, was a debt of record due to the Crown and was a debt provable in the Bankruptcy under Section 30(3) of the English Bankruptcy Act, 1914. I express no opinion on the point. I should note that the decision in 1944-1 Ch 310 (A), was not referred to by the learned Advocates on either side.
9. I should also advert to one further point not noticed in the argument on either side. Immediately after the impugned order was made the petition for adjudication was taken up for hearing. The order-sheet states that the lawyer appearing for the State of West Bengal did not contest the hearing of the petition after the impugned order had been made. The insolvent thereupon led evidence and the Court came to the conclusion that the debtor resided within the jurisdiction of the Court and was unable to pay his debts, which had exceeded the sum of Rs. 500/-. There has been no cross appeal by the State of West Bengal, It has not been contended on behalf of the State of West Bengal that the order of adjudication dated 21-1-1954 should be set aside or that the State of West Bengal should be given a further opportunity to contest the hearing of the petition. The State of West Bengal obtained an erroneous order and thereafter voluntarily chose not to contest the hearing of the adjudication. I say no more on this point because Mr. Chakravorty did not advert to this point and he must have been well advised not to do so.
10. I pass the following order: The appeal is allowed and order No. 18, dated 21-1-1954 is set aside. There will be no order as to costs.