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Nirode Mohan Chatterjee Vs. Indu Bhushan Ghosh and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 4 of 1956
Judge
Reported inAIR1959Cal74,1959CriLJ41
ActsProvincial Insolvency Act, 1920 - Sections 69 and 70
AppellantNirode Mohan Chatterjee
Respondentindu Bhushan Ghosh and anr.
Appellant AdvocateArun Kishore Das Gupta, Adv.
Respondent AdvocateNagendra Mohan Saha, Adv. for Bejoy Bhose, Adv. for Respondent No. 1, ;Kshetra Mohan Chatterjee and ;Rabindra Kumar Goswami, Advs.
DispositionAppeal allowed
Cases ReferredGangabishnu Singha v. Kahn and Kahn and Co.
Excerpt:
- .....following facts : 3. appellant nirode mohan chatterjee filed an application in the court of the district judge, alipore, 24 parganas, under the provisions of the provincial insolvency act for being adjudicated an insolvent. by an order passed by the learned district judge on 8-6-1955, the official receiver who was mr. indu bhusan ghosh at the relevant time, was appointed interim receiver under section 20 of the provincial insolvency act and he was! directed to take possession of all the assets of the prospective insolvent. the order-sheet of the court below would show that the debtor did not comply with the order of the official receiver regarding production of some title deeds, account books and other documents. order no. 12, dated 17-6-1955, would show that the district judge.....
Judgment:

Renupada Mukherjee, J.

1. This appeal arises out of an order passed by the District Judge of 24 Parganas in connection with an insolvency case.

2. In order to understand the points in controversy involved in this appeal it is necessary to state the following facts :

3. Appellant Nirode Mohan Chatterjee filed an application in the Court of the District Judge, Alipore, 24 Parganas, under the provisions of the Provincial Insolvency Act for being adjudicated an insolvent. By an order passed by the learned District Judge on 8-6-1955, the Official Receiver who was Mr. Indu Bhusan Ghosh at the relevant time, was appointed interim Receiver under Section 20 of the Provincial Insolvency Act and he was! directed to take possession of all the assets of the prospective insolvent. The order-sheet of the Court below would show that the debtor did not comply with the order of the Official Receiver regarding production of some title deeds, account books and other documents. Order No. 12, dated 17-6-1955, would show that the District Judge directed a complaint to be made against the debtor under Section 70 of the Provincial Insolvency Act to the Sub-divisional Magistrate, Alipore, to put the debtor on trial under Section 69(a) of the Provincial Insolvency Act. A registered notice was, however, directed to be issued on the debtor before the complaint was lodged in fact. On receipt of the notice the debtor appeared and showed cause. Some proceedings thereafter took place before the Official Receiver. Order No. 27, dated 14-9-1955, would, however, show that the Receiver recommended that steps should be taken against the prospective insolvent under Sections 69 and 70 of the Provincial Insolvency Act for non-compliance of some directions given under Section 22 of the Act regarding production of documents. Thereafter a complaint was actually drawn up and forwarded to the Sub-divisional Magistrate of Alipore. This appeal is directed against the order of the District Judge by which the complaint in question was made to the Sub-divisional Magistrate of Alipore.

4. Mr. Das Gupta appearing on behalf of the debtor appellant submitted in the first place that the complaint was a misconceived one and that there was no ground for making a complaint under Section 69(a) of the Provincial Insolvency Act. The relevant portion of that section runs in the following terms ;

'69. If a debtor, whether before or after the making of an order of adjudication,--

(a) wilfully fails to perform the duties imposed on him by Section 22 or to deliver up possession of any part of his property which is divisible among hiscreditors under this Act, and which is for the time being in his possession or under his control to the Court or to any person authorised by the Court to take possession of it, or

he shall be punishable on conviction with imprisonment which may extend to one year.'

Mr. Das Gupta contended that in the present case the debtor did not wilfully fail to perform the duties imposed on him by Section 22 of the Provincial Insolvency Act nor did he fail to deliver up possession of any part of his property to the Official Receiver and that the District Judge did not apply his judicial mind to the facts of the case when he drew up the complaint on the basis of the report of the Official Receiver. On a perusal of the record we are not satisfied that there is any substance in this argument of Mr. Das Gupta, because one thing at least is clear from the report of the Official Receiver, namely, the wilful non-production of the account books of a business which was owned by the debtor. In our opinion there are justifiable reasons for holding that there is prima facie ground for making a complaint against the debtor under Section 69(a) of the Provincial Insolvency Act for non-production of account books before the Official Receiver, if not for anything else. The first contention urged by Mr. Das Gupta, therefore, fails.

5. Mr. Das Gupta contended in the next place that the complaint is premature inasmuch as even assuming that any offence has been committed by his client which falls within the scope of Section 69(a) of the Provincial Insolvency Act, the District Judge can forward the complaint to the Magistrate only after the appellant is adjudicated to be an insolvent and not before. In this connection Mr. Das Gupta drew our attention to Section 70 of the Provincial Insolvency Act which runs in the following terms :

'70. Where the Court is satisfied, after such preliminary inquiry, if any, as it thinks necessary, that there is ground for inquiring into any offence referred to in Section 69 and appearing to have been committed by the insolvent, the Court may record a finding to that effect & make a complaint of the offence in writing to a Magistrate of the first class having jurisdiction, and such Magistrate shall deal with such complaint in the manner laid down in the Code of Criminal Procedure, 1898.'

Mr. Das Gupta submitted that the expression 'committed by the insolvent' is important. He argued that no action can be taken in the criminal Court against the appellant unless and until he is adjudicated an insolvent and the mere fact that he has filed an application for being adjudicated an insolvent does not make him such. In our opinion this contention of Mr. Das Gupta seems to be well-founded and it gains support from a case of this High Court reported in Gangabishnu Singha v. Kahn and Kahn and Co. : AIR1931Cal508 . The facts of that case are no doubt somewhat different from the facts of the present case. There a creditor had filed an application for adjudicating a debtor an insolvent. The application of the petitioning creditor was dismissed. Thereafter another creditor of the clebtor moved the Court for prosecuting the debtor under Sections 69 and 70 of the Provincial Insolvency Act for the alleged commission by the debtor of some offences under Section 69 of the Act. This application was allowed by the District Judge, but on appeal the learned Judges of this High Court set aside the order of the District Judge. In delivering the judgment Rankin, C. J. made the following, among other, observations :

'I entirely fail to satisfy myself that, in any of the other cases, it was ever laid down or meant to be laid down that, in the absence of an, order of adjudication, a prosecution could be started under Section 69 In these circumstances, I think that the order made to prosecute the debtor under Section 69 of the Provincial Insolvency Act is entirely ultra vires and misconceived.'

From the above quoted observations of the learned Judge it will be clear that on a proper interpretation of Sections 69 and 70 of the Provincial Insolvency Act it should be held that although a debtor may commit offences mentioned in Section 69 of the Act prior to the order of adjudication, it is not permissible for the insolvency Court to make a complaint against him regarding such offences until the debtor becomes an insolvent by the order of adjudication. In these circumstances we must hold that the complaint made by the learned District Judge is premature and must be kept in abeyance until the order of adjudication, if any, is made in this case.

6. On grounds set forth above, we allow this appeal and set aside the order challenged in this appeal. The complaint in question which has been forwarded by the learned District Judge to the Sub-divisional Magistrate of Alipore should be withdrawn as soon as practicable. It will, however, be open to the learned District Judge to take such action against the appellant as he deems fit and proper under Sections 69 and 70 of the Provincial Insolvency Act if and when the appellant is adjudicated an insolvent.

7. Let the records be sent down to the Court concerned at a very early date.

8. We do not make any order as to costs in this appeal.

B.N. Banerjee, J.

I agree.


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