1. The matters now before me consist in an application for stay and an appeal. By consent they were heard together. Both proceed from an enquiry held by the Registrar of Provident Insurance Societies under the provisions of the Provident insurance Societies Act, 1912. The Registrar conducted this inquiry into the affairs and position of the appellants, the Pioneer Insurance Company. He found that the Company was in an insolvent state and ordered it to be wound up.
2. In my opinion the Registrar had ample material before him to make such an order. The alleged irregularities with regard to notice of the inquiry and also with regard to notice of its result (on which the application for stay is based) are, in my view, unfounded. Adequate notices were given to the appellants.
3. There are no judicial decisions in relation to the Act in question, but it is quite clear from the text of Sections 17 and 18 that the giving of the notices mentioned in Section 17, Sub-section 7 is mandatory; whereas the issuing of the subsequent notices laid down in a. la is merely permissive.
4. It is difficult to speak with moderation of the manner in which this Company was carried on. It seems to me to have been organised with the prime object of swindling members of the poorer classes. Its puffing prospectus would prepare one for this. Unfortunately, the Provident Insurance Societies Act gives no power to the Registrar to refuse registration, even if the proposed constitution and rules of the Society are of a suspicious character or actuarily unsound. The Company seems to have had very little capital and no reserves. The main position of their capital if such it may be called) on which the directors relied, was the premium fund from policy-holders. Needless to say the iniquitous 'death-call' system was a prominent feature. It was originally proposed that ten per cent. of the Company's net income should be put to reserve; that twenty per cent. of the income should go to the Managing Agents; and the remaining seventy per cent. would be for the benefit of the Assured. The Managing Agents, Mayor & Co. embezzled part of the Company's funds. For this defalcation they gave a worthless promissory note for Rs. 20,000. Mayor & Co. have been prosecuted for their conduct in relation to the Company's affairs.
5. The only arguments put forward against the winding up, are, that two enterprising; gentlemen have come forward and stated their readiness to manage the Company and. that a new Board of Directors is prepared to get in the outstandings including the cash for the Rs. 20.000 promissory note. I am not impressed by these suggestions and. reject them.
6. Taken as a whole the Indian Provident-Insurance Societies Act, 1912, seems to me to be a thoroughly weak and unsatisfactory enactment. It is, presumably, based upon the English Industrial and Provident Societies Act of 1893 and the later Amending Act of 1912. No rules have yet been made under Section 24 which is the enabling section of the Indian Statute. Indeed, during the hearing, I was invited by the Acting. Advocate-General to recommend to Government the form of certain rules which are contemplated. I must decline to do so. I should nave thought that it was constitutionally axiomatic in circumstances such as these that Judges should not be asked to undertake such a task, for it is more than likely that when the rules are brought forward I may at some future date have to interpret them. In this regard, however, I recommend to the notice of the authorities the provisions of Schedule II to the English Act of 1893.
7. Finally, I may say that I was somewhat astonished at the passionate nature of the speech made to me by Mr. Gupta, on behalf of the Company against the direction as to the winding up. But a further perusal of the correspondence showed me that a gentleman with the same name and initials as Mr. Gupta, has put himself forward as a potential director of the. Company on its suggested reconstruction. This may possibly account for the disingenuous fervour of Mr. Gupta's eloquence; yet I cannot help observing that it is undesirable that a member of the Bar should plead in a case concerning which he has a personal interest.
8. In all the circumstances I consider that the Registrar was entirely justified in the course he took. For the foregoing reasons I dismiss both the appeal and the application with costs.