OFFICIAL ASSIGNEE OF BOMBAY Vs. MOTILAL CHAMPALAL

JUDGEMENT

(1.) THIS is an appeal from a decision of Mr. Justice Chagla, sitting as the Insolvency Judge, and it raises a question as to the rate at which the Official Assignee can charge commission under Rule 180(b) of the Bombay Insolvency Rules.

(2.) THE facts are that the insolvents were adjudicated on July 1, 1938, and on March 6, 1940, a scheme of composition was suggested by the debtors, and in due course, on April 15, 1941, that scheme was sanctioned by the Court, and the adjudication was annulled. THE scheme provided, in substance, that the Official Assignee should be the trustee of the scheme, and under Clause 2 he was, in the first instance, to pay all fees and percentage, costs, charges, expenses and commission payable to the Court and to the Official Assignee out of the moneys to be received by him under the scheme. THEn under clause 4 he was to pay out of the balance of the moneys a composition of Re. 0-5-6 in the rupee. THEn it was provided that certain outside parties were to pay him certain specified sums, and the scheme showed that there would be an estimated surplus in his hands after paying the agreed dividend on the claims of creditors who were not to release their claims. At the date when the scheme was sanctioned, Rule 180(6) provided that the Official Assignee was entitled to charge a commission of three per cent, on the amount paid in pursuance of a composition or scheme of arrangement. On April 24, 1941, that is nine days after the scheme was approved, the rate of three per cent, was increased to five per cent., and the question is whether the commission chargeable by the Official Assignee in the present case is at the higher or lower rate. THEre may be a question, on which we have heard some argument, as to whether the words "on the amount paid in pursuance of a composition or scheme of arrangement" refer to the amount paid by the trustee under a composition or scheme of arrangement to the creditors, or the amount paid to the trustee by outside parties under that composition or scheme of arrangement. But it is unnecessary to express any opinion on that point, because in this case the moneys were paid by the outsiders to the Official Assignee as trustee of the scheme of arrangement after the date when the rate of commission was increased, that is to say, after April 24, 1941, and the payments made under the scheme to the creditors were, therefore, necessarily made after that date.

(3.) COSTS of both sides to be paid out of the estate. Kania, J.