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Shadanchandra Bhandari Vs. Shewnarayan Golabrai - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1933Cal699,147Ind.Cas.191
AppellantShadanchandra Bhandari
RespondentShewnarayan Golabrai
Excerpt:
- .....has taken effect, the properties belonging to the insolvent's estate should be administered by the official assignee. the law makes it absolutely clear, because not only is there section 33, which puts a duty upon the insolvent to attend upon the official assignee and to do everything necessary to enable the estate to be collected and distributed among the creditors, but, by section 43, it is expressly provided that:a discharged insolvent shall give such assistance as the official assignee may require in the realization and distribution of such of his property as is vested in the official assignee.3. one also has to remember that, in certain circumstances, the official assignee takes for the benefit of the creditors the after-acquired property of the insolvent, that is to say, the.....
Judgment:

Rankin, C.J.

1. In this case, we have before us Appeal No. 79, which is an appeal from an order of 20th July 1932, whereby the learned Judge, exercising jurisdiction under the Presidency Towns Insolvency Act, made an order for the examination of the appellant as a witness under 8. 36 of the Act. The other appeal (No. 92) is from an order made by the learned Judge on 2nd August 1932, whereby one of the insolvents was directed to be examined under Section 36. The question, which arises in the present case, is the question whether the learned Judge had jurisdiction to make that order, having regard to the fact that the insolvent obtained an order for discharge on 29th March 1931. By that order, his discharge was suspended for six months, but the order of discharge was drawn up and completed in January 1932. The question is whether, after discharge has taken effect, it is within the power of the Court, under Section 36, to direct either that a witness be examined or that the insolvent himself be examined as a witness.

2. In this Court, there is authority against the appellant in the case of Re Haripada Bakshit,Ex parte Binodini Dassee (1916) 44 Cal 374. In that case, Greaves, J., for reasons, which I respectfully consider very sound, held that the Court has power, after discharge, to make an order under Section 36 in the case of a third party, but he had some little doubt whether, having regard to the provisions of Section 43 of the Act, an order could be made for the examination of the insolvent. In my judgment, under Section 36 of the Act, the Court has power to direct the examination either of a third party or of the insolvent. It has to be remembered that, while an insolvent may be well entitled to his discharge within reasonable time after the commencement of the insolvency, it may, nevertheless, be necessary that, after his discharge has taken effect, the properties belonging to the insolvent's estate should be administered by the Official Assignee. The law makes it absolutely clear, because not only is there Section 33, which puts a duty upon the insolvent to attend upon the Official Assignee and to do everything necessary to enable the estate to be collected and distributed among the creditors, but, by Section 43, it is expressly provided that:

A discharged insolvent shall give such assistance as the Official Assignee may require in the realization and distribution of such of his property as is vested in the Official Assignee.

3. One also has to remember that, in certain circumstances, the Official Assignee takes for the benefit of the creditors the after-acquired property of the insolvent, that is to say, the property acquired after adjudication at any time before the discharge takes effect. So that the mare passing of the order of discharge may, in many cases, leave a considerable amount of winding up administration to be carried out. The principle of the matter is that, both before and after discharge, the insolvent is put under the duty to assist in every way the liquidation of the assets for the benefit of his creditors. That is very extensive and that is his primary duty. Section 36 is a section, which applies not specially to the insolvent himself but to any member of the public, who is in a position to give information respecting the insolvent's property. This has often been called an inquisitorial section. It being necessary that the man's property should be handed over to a stranger-a public official for administration, that public official has to rely upon other people for his information. Very often an insolvent may be hostile or an individual creditor may be unwilling to give information. He has therefore compulsory power under the order of the Court or rather, to put the matter more correctly, the Court is given compulsory power, which it may exercise in a proper case for the benefit of the creditors and also for other purposes, that is to say, for investigating in the public interest into the conduct of the insolvent. If, after the insolvent has received his discharge, he is substantially speaking in the same position as before as regards his liability to give all proper assistance in the administration of his estate

4. It would indeed be anomalous, if there were no power in the Court to have him examined formally when such examination is necessary in the interest of the administration. It is suggested that the whole part of the Act from Section 9 down to Section 45 is headed: 'Proceedings from Act of Insolvency to Discharge;' but it will be seen that, in that part of the Act, a large number of matters are dealt with; as, for example, it is in the part of the Act that we come across S.44 with reference to 'fraudulent settlements' and there are various other matters, which are not logically dealing with 'proceedings from act of insolvency to discharge.' After all, the heading must not bo taken at the foot of the letter. We have to look at the subject-matter of the sections and Section 43, for example, is dealing with proceedings and position after discharge. I do not myself doubt that the power of the Court, under Section 36, applies after discharge and applies both to the insolvent and other persons. In these circumstances, as it is not suggested that the learned Judge was wrong as a matter of discretion in making the order, it appears to me that both the appeals must be dismissed with costs in both the Courts.

Pearson, J.

5. I agree.


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