OFFICIAL ASSIGNEE OF MADRAS Vs. ORMORSFIRM

JUDGEMENT

(1.) The Official Assignee of Madras who is the appellant in this case took out a garnishee application in the matter of the insolvency of M.R.V. S.M. Doraiswami Chetty and Co., against the respondent firm for an order declaring that a sum of Rs., 10,000 which belonged to the insolvents came into the hands of the respondent firm was a payment made by the insolvents when they were in insolvent circumstances and that the same was a fraudulent preference and asking for consequent reliefs.

(2.) Mr. Justice Beasley by whom the application was heard dismissed it with costs holding that what was proved by the Official Assignee at the hearing of the application could not possibly be held to constitute any payment by the insolvents by way of undue or fraudulent preference. The learned Judge also Incidentally refused the application of the Official Assignee for amendment of the application or even the withdrawal of the application with liberty to make a fresh application. In brief the conclusion arrived at by the learned Judge was that the facts proved, established if anything, only a conversion by the respondents of moneys belonging to the insolvents and that as there was no voluntary payment by the insolvents, no question could possibly arise of any fraudulent preference. It may, to begin with, be observed that however summary such proceedings in insolvency may be and we might indeed say, because the proceedings are summary, it is incumbent on the Official Assignee making such applications to set out the exact grounds or cause of action properly and definitely so as to give sufficient notice thereof to the other side. However much the vagueness of pleading by or on behalf of the lay public may be regarded as excusable, no similar reasons are available in the case of a law officer of the Crown like the Official Assignee.

(3.) Mr. S. Doraiswami Aiyar, the earned Counsel for the appellant, attempted to argue that the case really set up by the Official Assignee in the report on which the application was based was one 01? conversion, if not in the main, at least in the alternative. It is impossible to accede to such an argument. Apart altogether from the terms of the notice of motion, the report of the Official Assignee leaves no doubt whatever that the case set up and sought to be made out by him was one exclusive of fraudulent preference. The report speaks of a member of the insolvent firm endorsing the hundies to the respondent firm ostensibly for collection and concludes by saying that the insolvents were great friends of the respondents, that the payment of the amount by the insolvents to the respondents was made at a time while the insolvents were heavily involved in debts and were unable to pay their debts in full, and that the payment was therefore a fraudulent preference and void against him. It has not been argued before us that, if the case set up by the Official Assignee should be regarded as one of fraudulent preference, the decision by the learned Judge was anything but right. The earned Counsel for the appellant did not argue that in the circumstances the learned Judge's order refusing any amendment or withdrawal of the petition especially at the stage when the case of both sides had been closed and also argued could be regarded as wrong.