ASIATIC GOVERNMENT SECURITY LIFE ASSURANCE COMPANY LIMITED Vs. DEBT CONCILIATION BOARD BY ITS CHAIRMAN

JUDGEMENT

(1.) This case discloses another example of the maladministration of the Debt Conciliation Act.

(2.) On the 26 December, 1989, the petitioner obtained a mortgage decree against the 2nd respondent for the payment of the sum of Rs. 6,760, inclusive of interest and costs. The judgment-debtor filed an appeal to this Court and asked for a stay of execution. A stay was granted on terms which were not complied with. Consequently the application for stay was dismissed. The trial Court eventually passed a final decree and the petitioner applied for the sale of the hypotheca. The sale was fixed for the 3 December, 1941. Bight days before, the 2nd respondent applied to the Debt Conciliation Board of Erode for settlement of his debts. The Board intimated to the debtor and his creditors that it would hear objections to the application on the 20 December, 1941. The petitioner appeared before the Board and stated that he objected to the Board making any order of settlement. By that time there was due to him Rs. 7,400. There were four other creditors and the total amount due to the creditors was Rs. 12,040. Therefore the amount due to the petitioner was more than fifty per cent, of the total amount owed by the 2nd respondent. The petitioner was a secured creditor and had obtained a mortgage decree. In the circumstances, it is not surprising that he objected to the application which was obviously made for the purpose of delaying payment.

(3.) Under Section 9 of the Act the Board has power at any stage to dismiss an application if it considers that it is not desirable or practicable to effect a settlement. The petitioner had made it clear to the Board that a settlement was not practicable; but instead of applying the provisions of Section 9 and dismissing the application, the Board directed a notice to issue under Section 10 (1). This notice was issued on the 12 February, 1942, and the creditors were required to submit their statements by the 14 May, 1942. Why the Board should give such a long period for the filing of statements does not appear, but it should not have done so as it was merely helping the 2nd respondent in delaying the payment of the monies he owed. The petitioner filed the statement required by Section 10 (1) on the 18 April, 1942. The Board had then before it all the materials required for taking action under Section 9, but it did not do as it should have done; instead it adjourned the case until the 16 June, 1942, and on that date again adjourned the matter until the 29 July, 1942.