VALLIAMMAL Vs. OFFICIAL ASSIGNEE OF MADRAS

JUDGEMENT

(1.) This is an appeal from an order of Stone, J., made in the Insolvency Court on the application of the Official Assignee that the appellants should be ordered to produce certain account books or be committed for contempt of Court. On the 29 February, 1932, Stone, J., passed the following order : "Books to be delivered within two weeks." Against that order this appeal has been presented. It raises some interesting and important questions.

(2.) The proceeding in which the order under appeal was made was the administration by the Insolvency Court of the estate of one Gurunatha Mudaliar who died on the 5 June, 1930. His estate was insolvent but he had not before his death been adjudicated an insolvent. One of his creditors presented a petition to the Insolvency Court for the administration of the deceased debtor's estate under Section 103 of the Presidency Towns Insolvency Act and an order for the administration of that estate in insolvency was made after notice of the petition had been served upon the deceased's widow, the 1 appellant, who appeared by Mr. Varadaraja Mudaliar on the hearing of the petition but did not oppose it. The deceased debtor during his life-time carried on a timber business but he did not live at his place of business but lived at No. 52, Vellala Street, Purasa-walkam, Madras, with his wife. He had a brother Ranganatha Mudaliar, who is the 2nd appellant. Immediately after the order for the administration of the estate in insolvency the Official Assignee took possession of a superstructure belonging to the deceased and some timber and some old pieces of furniture, and although the house and the business premises of the deceased were searched and an inventory was taken of all articles and documents, no account books and other documents or papers relating to the timber business were discovered, except some bill books for timber sold, and certain title deeds which the Official Assignee alleges to have been in the possession either of the 1 appellant or the 2nd appellant were not found. At this time there was in Madras Murugesa Mudaliar, the 3rd appellant, alleged to be a relation of the deceased debtor or the 1 appellant, who was assisting the 1 appellant in the administration of the estate and took some action with regard to the leasing of some properties. The Official Assignee's case is that the appellants have taken possession of the account books and other documents relating to the timber business carried on by the deceased and also the title deeds to some of the properties. The Official Assignee made a number of efforts to get the appellants before him for the purpose of examining them under Section 36 of the Presidency Towns Insolvency Act in order to ascertain whether they had the property in the shape of account books, documents and title deeds, etc., of the deceased debtor in their possession and eventually all the appellants were examined and all of them denied having in their possession those documents. Faced with these denials and being unable to get the documents the Official Assignee presented the application to the Court upon which the order appealed from was made. Affidavits in answer to the Official Assignee's application were filed by all the three appellants contradicting the Official Assignee's case. No evidence was taken by the learned Trial Judge although we are informed by Mr. V.C. Gopalaratnam appearing on behalf of the Official Assignee that he had his witnesses in Court. The learned Trial Judge upon the report of the Official Assignee on the one side and the affidavits of the respondents on the other side passed the order that the books were to be delivered within two weeks. As learned Counsel before us were unable to agree as to what happened in the Trial Court we have consulted Stone, J., who states that he made his order very quickly without considering any evidence other than the documentary evidence before him intending on the next occasion, namely at the end of the period prescribed in his order, to inquire into the question of the possession of the account books. We also ascertained from him that Mr. Narasimha Aiyar who was then appearing for the 1 appellant did not state that he wished to argue any question as to the jurisdiction of the Court to entertain the application although we accept Mr. Narasimha Aiyar's statement that he intended to take the point and had the necessary authorities to support his argument ready in Court and it was only the rapidity with which the order was made by our learned brother that prevented him taking this legal objection. It is conceded however that he informed our learned brother that the order made by him amounted really to a finding that either his client or the other appellants, or all of them acting together, were in possession of this property. Notwithstanding that, the order was passed.

(3.) The points taken here in appeal are : (1) that the Court had no jurisdiction to entertain a claim under Section 7 of the Act; (2) that even if it had, as the appellants had been examined under Section 36 and had denied possession of the books etc., the Official Assignee's remedy was by suit and not under Section 7; (3) that if the application was not one under Section 7 there is no other section in the Insolvency Act which entitles the Official Assignee to present it; and (4) that there was no evidence before Stone, J., upon which he could make the order that he did as the report of the Official Assignee cannot be evidence upon such an application and that therefore the denials of possession of the books by the appellants stood uncontradicted whereas the allegations made by the Official Assignee in his report remained unproved.