1. This in an appeal by Sitaram Khemka against an order made by my learned brother Mr. Justice Buckland, sitting on the Original Side in Insolvency on the 8th of June of this year, whereby he decided that Sitaram Khemka, son of the insolvent Khemkarandas Khemka, had been guilty of contempt of Court for having wilfully failed to comply with an order, dated the 19th March last and where by it was ordered that Sitaram Khemka should stand committed to the civil side of the Presidency Jail. It was further ordered that a writ should issue to the Sheriff to attach the person of Sitaram Khemka and to deliver him to the Superintendent of the Presidency Jail.
2. It appears that the respondent Haribux Fatehpuria obtained a decree against Khemkarandas Khemka in August 1924. On the 17th of March 1925 Khemkarandas was adjudicated insolvent. On the 29th July 1925 an order was made for the examination of Sitaram, the appellant. This order no doubt was made in pursuance of Section 36, Sub-section (1) of the Presidency Towns Insolvency Act of 1909. Sitaram was examined before the Registrar in Insolvency and on the 19th March 1926 an order was made by the Registrar in Insolvency, which is the order referred to in my learned brother's order of the 8th June 1926.
3. It appears from that order that Haribux Fatehpuria was represented by his attorneys and that, upon their application and upon hearing the evidence of Sitaram Khemka taken viva voce, it was ordered that the further examination of the witness should be adjourned until the 22nd March instant. The order proceeds as follows:
It is further ordered that the said Sitaram Khemka do by Saturday, the 20th day of March instant, make over to the Official Assignee of this Court and Assignee of the estate and effects of the said insolvent the books of account, an inventory whereof was prepared by the attorneys for the said creditors Haribux Fatehpuria and of the said insolvent at the time when the said books were in the custody of the said witness Sitaram Khemka.4. This order was not complied with. The result was that the attorneys for the creditor Haribux Fatehpuria, on the 20th May 1926, issued a notice directed to Sitaram Khamka and the Official Assignee that an application would be made on the 8th June 1926 before the Court in Insolvency on behalf of Haribux Fatehpuria for an order that contempt proceedings might be taken against Sitaram Khemka and that he might be arrested and committed to jail for contempt of Court; and the grounds were stated to be (1) petition of Haribux Fatehpuria affirmed on the 20th May 1926 and (2) proceedings in the insolvency matter. There was a petition setting out on the grounds upon which the creditor relied in respect of the application for an order for commitment and that petition was affirmed by Haribux Fatehpuria who said that the statements contained in all the paragraphs in the foregoing petition were true to his knowledge. The matter came before the learned Judge on the 8th of June last when Sitaram Khemka appeared in parson and the minutes of what took place were read to this Court yesterday. Sitaram said that he did not know that the application was to be heard that day. He denied having received notice of the application, but he stated that, about two hours before the application was heard, he had been told by Mr. N.K. Bose that the application was to be heard that day. Then he was asked: 'Do you want to say anything about this matter?' And he said: 'No, I want ten days' time.' Then he was asked: 'Why don't you produce the books?' and he said he had none with him; whereupon the learned Judge made the order which I have already stated.
5. We have not the advantage of any judgment of the learned Judge setting forth the reasons which induced him to make the order of committal. The learned advocate, who appeared on behalf of the appellant, pointed out that these proceedings were what has been called 'quasi-criminal' proceedings and that the procedure to be adopted should be in accordance not only with the Rules of this Court, but also in accordance with the provisions of the Act, and he argued that in such proceedings as these he was entitled to rely upon any and every technical objection.
6. The first point on which he relied was that the order of the 19th March 1926 which directed the appellant to make over the books to the Official Assignee must have been made under Section 36, Sub-section (5) of the Presidency Towns Insolvency Act. I agree with the argument of the learned advocate in that respect. The terms of the order make that clear. The order refers to the fact that the evidence of Sitaram Khemka was heard viva voce. It states: 'Upon the evidence of Sitaram Khemka taken viva vice it is ordered.' In my judgment, the order of the 19th of March could not have been made under any section other than Section 36, Sub-section (5). The learned advocate, who appeared for the respondent, suggested that it might have been made under Section 36, Sub-section (1). In my opinion, it is clear that that Sub-section did not authorize the order which was made on the 19th March 1926. Section 36, Sub-section (5) runs as follows:
If, on the examination of any such person, the Court is satisfied that he has in his possession any property belonging to the insolvent, the Court may, on the application of the Official Assignee, order him to deliver to the Official Assignee that property or any part thereof, at such time, in such manner and on such terms as to the Court may seem just.7. The learned advocate for the appellant pointed out that the application, in respect of which the order of the 19th March 1926 was made, was not made by the Official Assignee, but was made by and on behalf of the creditor and consequently he argued that the Registrar in Insolvency had no jurisdiction to make the order of the 19th March 1926. On the other hand, the learned advocate for the respondent argued that it was a mere irregularity, that the appellant had not been prejudiced thereby, and that consequently by reason of the provisions of Section 118 of the Presidency Towns Insolvency Act, the Court should not regard the order of the 19th March 1926 as ineffective or invalidated.
8. I am by no means satisfied that this is a matter of irregularity. It is to be noticed that under Sub-section (1) of Section 36 the application may be made either by the Official Assignee or by any creditor who has proved his debt. By Sub-section (4) it is provided that, if on the examination of any such person, the Court is satisfied that he is indebted to the insolvent, the Court may, on the application of the Official Assignee, order him to pay to the Official Assignee the amount in which he is indebted. Sub-section (5), as I have already said, deals with the case, when it is found on the examination of any such person that he has in his possession any property belonging to the insolvent, then, on the application of the Official Assignee, the Court may order him to deliver to the Official Assignee such property so that the Legislature has drawn a distinction between the application to be made under Sub-section (1), which may be made either by a creditor or by the Official Assignee, and the applications to be made under Sub-section (4) and Sub-section (5) which must be made by the Official Assignee.
9. It is not necessary to speculate as to the reason of such a provision, but it may be that the Legislature thought that such a summary procedure as is indicated by the provisions of Sub-section (4) and Sub-section (5) of Section 36 ought not to be instituted except upon the application of the Official Assignee himself. There is the plain provision of Sub-section (5). It has not been followed in this case, and, as I said before, I am by no means satisfied that it is a mere irregularity.
10. The proceedings in this case seem to have been as irregular as they could be from beginning to end. Rule 36 of the Insolvency Rules of this Court provides that:
an application to the Court to commit any person for contempt of Court shall be supported by affidavit and be filed in the Court in which the proceedings are.11. That Rule was not complied with. 1 am not prepared to hold that, if this matter stood by itself, it would not be open to the Court to say that no injustice has been done by reason of the procedure which is laid down in Rule 36 not having been followed. Then, again, the procedure laid down by Rule 37 of the Insolvency Rules of this Court has not been followed. The provision is that, when an application is made to commit a person, it is the Registrar who is to fix a time and place for the Court to hear the application, and notice is to be personally served on the person sought to be committed. No application was made to the Registrar in this case. The proceeding was initiated by an ordinary notice of motion. I do not understand, when the
12. Rules are so plain, why those who are responsible for instituting and supervising insolvency proceedings cannot follow the Rules which are laid down by this Court.
13. The matter stands thus: The application, upon which the order of the 19th of March 1926 was made, was not instituted by the Official Assignee or on his behalf. The proceedings subsequent to that were irregular; and, in my judgment, the Court ought not in a case of this kind to disregard such irregularities as occurred in this case and I think chat that reason is sufficient to justify the success of this appeal. It is only right to say that none of these matters were brought to the notice of the learned Judge sitting on the Original Side; for, as I have already mentioned, the appellant appeared by himself and was not in a position to draw the attention of the learned Judge to the irregularities, to which I have referred.
14. As regards the merits of the case, I am inclined to agree with the learned Advocate for the appellant that the evidence before the Court is inconclusive and hardly sufficient to justify an order of commitment for contempt of Court. It is not necessary, however, for me to go into this matter at any length; for I am satisfied that, having regard to the failure to comply with the provisions of Section 36, Sub-section (5) of the Act and of the Rules of this Court, the order complained of should not be allowed to stand.
15. The appeal is allowed with costs and the order of the 8th June 1926 of the learned Judge is set aside.
16. I am of the same opinion. There is nothing that I can usefully add to the judgment that has been delivered by my Lord the Chief Justice.