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G. C. Moses Vs. A. C. Oakeshoit - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in95Ind.Cas.522
AppellantG. C. Moses
RespondentA. C. Oakeshoit
Excerpt:
presidency towns insolvency act (iii of 1909), section 39 (1), (2) - transfer of goods by insolvent before insolvency--fraud--discharge, proper order as to. - .....is alleged to have been made on the 7th of february 1922 in favour of one mr. mac-millan. the learned judge who was then sitting in insolvency set it aside, holding that the insolvent and macmillan put their heads together and hit upon the device of an assignment of the said property, furniture and household effects for the purpose of using the same as a shield against mr. moses who was the landlord of the house in behala and to whom the insolvent owed arrears of rent, and against other creditors.4. in view of that finding, it seems to me that this case comes within section 39, sub-section (2), clause (j) of the presidency towns insolvency act, 1909; and i am of opinion that the respondent concealed his property or part thereof, and was guilty of fraud within the meaning of the.....
Judgment:

Sanderson, C. J.

1. This is an appeal by Mr. G.C. Moses against an order of the learned Judge on the Original Side sitting in insolvency whereby he granted the insolvent, who is the respondent in this appeal, but who has not appeared, his discharge subject to his paying Rs. 140 for six months to the Official Assignee, the first of such payments to be on the 10th of March and the subsequent payments to be made on the 10th of every subsequent month.

2. It appears that the respondent was adjudicated insolvent on his own petition on the 27th of January 1923, his liabilities being about Rs. 40,000 and the assets at about Rs. 3,600.

3. The Official Assignee stated in his report: 'A point to notice in this insolvency is the transfer of insolvent's furniture to one of his creditors. This transfer was subsequently set aside by the Court and sold for the benefit of the general body of creditors.' That transfer is alleged to have been made on the 7th of February 1922 in favour of one Mr. Mac-Millan. The learned Judge who was then sitting in insolvency set it aside, holding that the insolvent and MacMillan put their heads together and hit upon the device of an assignment of the said property, furniture and household effects for the purpose of using the same as a shield against Mr. Moses who was the landlord of the house in Behala and to whom the insolvent owed arrears of rent, and against other creditors.

4. In view of that finding, it seems to me that this case comes within Section 39, Sub-section (2), Clause (j) of the Presidency Towns Insolvency Act, 1909; and I am of opinion that the respondent concealed his property or part thereof, and was guilty of fraud within the meaning of the sub-section.

5. Consequently, the jurisdiction of the learned Judge sitting in insolvency was limited because Section 39 provides as follows:

The Court shall refuse the discharge in all cases where the insolvent has committed any offence under this Act, or under Sections 421 to 424 of the Indian Penal Code, and shall, on proof of any of the facts hereinafter mentioned,'-of which (j) to which I have just referred is one-'refuse the discharge or suspend the discharge for a specified time or suspend the discharge until a dividend of not less than four annas in the rupee has been paid to the creditor or require the insolvent as a condition of his discharge to consent to a decree being passed against him in favour of the Official Assignee for any balance or part of any balance of the debts proveable under the insolvency which is not satisfied at the date of his discharge.'

6. The learned Judge made an order which is not covered by any one of the clauses which I have just read. The word used in this section is 'shall,' Therefore, the learned Judge was bound to make one of the orders specified in (a), (6), (c) or (d) of the first sub-section of Section 39 of the Act.

7. The result in my judgment is that the learned Judge's order must be set aside.

8. The only question is what order should be substituted in place thereof.

9. Having regard to all the facts of this case, in my opinion, the proper order to make is to suspend the discharge for four years.

10. We make no order as to costs.

Rankin, J.

11. I agree.

12. The learned Judge has found that the fact mentioned in Clause (a) of sub-Section (2) of Section 39 of the Presidency Towns Insolvency Act has been established, namely, that the insolvent's assets are not of a value equal to four annas in the rupee so that even in his own view the form of his order was not in conformity with that finding. Owing, I think, to the form of the Official Assignee's report and of the affidavit in opposition, the facts mentioned in Clause (a) are the only ones read into the order, and, in my opinion, it should also be read into the order that the insolvent has been guilty of fraud in connection with the alleged transfer of his goods. The case is not serious enough to justify the Court in refusing the discharge altogether: on the other hand, the liabilities and the position of his assets might make it, unjust in this case to refuse the discharge until a dividend of four annas in the rupee could be paid. I think, therefore, that the best course is to make the order proposed by the Chief Justice. It is entirely wrong, upon a condition as to payment, to give the insolvent his discharge either immediately or after the payment is made. Any order of the kind mentioned in Clause (1) (d) must be made exactly within the terms of the clause.


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