CHIRUNJI LAL Vs. AJODHIA PRASAD

JUDGEMENT

(1.) This case is by no means easy to deal with and raises several questions of some importance. Not for the first time in this Court within my short experience questions are raised which show what, I think, has been recognised for sometime by the legal profession, that there is a real necessity for a rigorous amendment of the existing insolvency law in these Provinces. It is a question of some public importance which calls for the attention of the Government. Now there was one preliminary question, which it is desirable to dispose of which was mentioned by Dr. Sundar Lal on behalf of the appellant at the opening of the appeal, namely, where the debtor has petitioned on bis own behalf for an order of adjudication and his petition has been dismissed and he desires to appeal, whom he ought to make parties as respondents to his appeal. There is no provision in the Act dealing specifically with the matter. If there was a Receiver, then in the rare event of a debtor appealing from an order of an Insolvency Court, the proper person to make respondent would be the Receiver, but ex hypothesi there can be no Receiver, inasmuch as the appointment of a Receiver depends upon the adjudication. In this particular case there was an interim Receiver who had been appointed before the hearing of the petition and whose appointment was continued for the purposes of convenience, when it was known that the order of dismissal would be taken to the Court of Appeal. We are disposed to agree with Dr. Sundar Lal that that order, although a very natural and convenient one to make, was a nullity if anybody had chosen to call it in question and, therefore, the present appellant was well advised under the circumstances in not making the interim Receiver a party to the appeal. The persons really interested in the discussion before us were the general body of creditors and without attempting to lay down a Rule of universal application, we think that the better practice in such cases is to do what has been done in this case or even less than what has been done in this case, to give notice to a substantial number of creditors of the proposed appeal, so as to enable them to represent their interests as respondents. Now the grounds upon which the learned Judge has dismissed the application may be summarised as follows: -

(2.) (1) It is alleged, and the Judge appears to have held, that one, if not more, of the applicants (there are in fact three applicants for insolvency) had supplied his mother with funds. What precise branch of the criminal law that act is supposed to constitute a breach of, we do not for the moment appreciate, but if it be the fact, then the money which could not otherwise be recovered from the mother, might be recovered by the Receiver under the Insolvency Act. That ground appears to us, so far from being a ground for refusing an adjudication in bankruptcy, to be rather a reason in favour of making the order.

(3.) The second ground is that the insolvent has deliberately incurred liabilities and committed various frauds in the course of doing so. The fact that a debtor, who is otherwise within the provisions of the Insolvency Act which renders an adjudication against him possible, is also a dishonest man, does not seem to us to be a reason for refusing an order of adjudication. Conduct of that kind can be dealt with either independently of, or through the machinery of, the Insolvency Act, and if he has committed any offence, he can be dealt with for it, whether he is made an insolvent or not.