1. This appeal is against an order of the Court below dismissing an application for being declared an insolvent.
2. The application was dismissed on the ground that the grant of the petition would encourage fraud.
3. The learned Judge refers to an agreement (Exhibit 1) executed by the petitioner, which mentioned certain properties as belonging to him (the petitioner).
4. There is a letter on the record written by the petitioner, in which he stated that he executed the agreement under coercion after having been subjected to insults by some persons on behalf of the village Co operative Bank.
5. The opposite party urged that the petitioner defrauded the Secretary of the Bank and that his present petition was made with the object of defrauding all his creditors by concealment of property.
6. The learned Judge was of opinion, as stated before, that the grant of this petition would be to encourage fraud,
7. But, in the first place, there has been no enquiry into the matters stated in the letter of the petitioner in which the circumstances under which the agreement was executed have been set out, and no evidence has been taken on the point. But apart from that, we do not think that the question of the bona fides of the applicant can be gone into at the present stage. The Court below has not dismissed the application of the petitioner on the ground that there was non-compliance with the provisions of sections 5 and 6 of the Act. As pointed out in Udai Chand v. Ram Kumar Khara 7 Ind. Cas. 394 : 15 C.W.N. 213 : 12 C.L.J. 400, where the requirements of the Act have been complied with, an order of adjudication should follow almost as a matter of course. Whether the debtor has or has not committed acts of had faith is to be determined by the Court, not at the stage when the order of adjudication is to he made, but at the final stage when an application is made for an order of discharge.
8. It is unnecessary to refer to other cases on the point. We may, however, refer to the case of Chhatrapat Singh v. Kharag Singh 39 Ind. Cas. 788 : 21 C.W.N. 497 : 21 M.L.T. 36 : 15 A.L.J 87 : (1917) M.W.N. 100 : 32 M.L.J. 1 : 19 Bom. L.R. 174 : 25 C.L.J. 215 : 10 Bur. L.T. 25 : 44 C. 535 : 44 I.A. 11 (P.C.), in which the Judicial Committee held that 'a debtor's right to be adjudicated an insolvent, when he has complied with the terms of the Provincial Insolvency Act, is a statutory right of which he cannot be deprived on so treacherous a ground of decision as 'an abuse of the process of the Court.' The stage at which to visit with its due consequences any misconduct of a debtor is when his application for discharge comes before the Court, and not on the initial proceeding.'
9. The order of the lower Court must, therefore, be set aside and the case sent back to that Court in order that the application may be heard and disposed of according to law.
10. No order as to costs as the respondent has not entered appearance.