THE TANJORE PERMANENT BANK LTD. REPRESENTED BY ITS SECRETARY, M. SOOSAI MARIAN Vs. THE INDIAN OVERSEAS BANK LTD. AND ORS.

JUDGEMENT

(1.) LEFT to myself and untrammelled by precedents in case law, I would have held that justice and equity required this alienation, which undoubtedly had the effect not only of preferring the Overseas Bank to the Tanjore Permanent Bank, but also of defrauding the latter, to be set aside as a fraudulent preference under Section 54 of the Provincial Insolvency Act. My learned brother whose judgment I had the advantage of perusing has, however, based his decision on principles indoctrinated by a formidable array of case law, into the words "with a view of" in this section, of dominant intention and pressure and voluntary nature, that I feel I would not be justified in expressing a different opinion and referring this case for resolution by a third Judge. Left to myself, I would have been inclined to give the words "with a view of" a more elastic meaning as being the equivalent to its ordinary dictionary meaning "with the intention of", not necessarily a dominant intention to be determined after a psycho -analytical vivisection of what is in this case the criminal mentality of the insolvent at the time he made this alienation. For instance, the dominant intention of a robber may be to escape with his booty, and if obstructed, he may cause murder or grievous hurt intending of course to do so in furtherance of his dominant objective which was to escape. But nonetheless the law affords him no escape from the full consequences of the acts which he intended. But as my learned brother is not prepared to agree with me, and in the absence of any precedent in case law which affords support to the view I am taking, I have decided to accord my reluctant concurrence with the judgment he is about to deliver. Although the facts in this case are peculiar and not on all fours with any other cases placed before us, I cannot say that it is not in accordance with principles laid down in the wealth of case law which he has cited.

(2.) AS my learned brother has said, insolvency litigation in its inception adopted practically in toto the English Acts without, however, keeping pace with some changes in the English Acts in view of difficulties created by English case law which I do not propose to traverse. I will confine myself to a resulting anomaly in our present Act. Section 6(b) of the Provincial Insolvency Act reproducing the original English Act sets out as one of the acts of insolvency on which a debtor could be adjudicated a transfer of his property or of any part thereof with intent to defeat or delay his creditors. This corresponds to Section 1(1)(b) of the English Bankruptcy Act which after amendment in 1914 now reads as follows:

(3.) I am saying all this in order to indicate that Section 54 of the Insolvency Act, in order to harmonise law with justice, equity and good conscience, appears to be in need of amendment. There is further an inherent anomaly in Section 54 read with Section 6(2) and (3) arising from the judicial interpretation given to the words "with a view of, giving that creditor preference", in that a transfer with this objective though it may not be per se fraudulent, shall be deemed null and void as against the receiver. But there appears to be no way under the Act itself of declaring an alienation fraudulent per se. The alienation, exhibit A -14 in this case, undoubtedly was to the knowledge of the insolvent, void as against the receiver. To avoid these obvious anomalies, in addition to amending Section 6(b) on the lines of the present Section 1(1) of the English Bankruptcy Act, the following addition to Section 54(1) by way of a proviso appears to be necessary: