JEWRAJ KHARIWAL Vs. DOYAL CHAND JOHURY

JUDGEMENT

(1.) This is an appeal against an order of the District Judge of 24 - Parganas passed under Section 70, Provincial Insolvency Act, 1920, directing the prosecution of the appellant on making a complaint to a Magistrate of some offences mentioned in Section 69 of the Act. It appears that one of the creditors of the insolvent made an application before the District Judge complaining of certain fraudulent acts of the insolvent which were mentioned under seven heads in the petition. There was also a report from the Receiver in which it was complained that the insolvent had not disclosed all his properties. The learned Judge, presumably on the material before him held that he was satisfied that the insolvent had wilfully failed to perform the duties imposed on him by Section 22 of the Act by not producing his accounts and other books and by withholding documents relating to his affairs and that he had failed to disclose certain property to wit, two motor cars.

(2.) The appellant has appealed against the propriety of this order, having obtained special leave from this Court under Section 75, Provincial Insolvency Act. The point which has been pressed before us is that the District Judge ought to have held a preliminary enquiry before making a complaint under Section 70, and in the present case he did not give sufficient opportunity to the insolvent to prove that he had not committed the offences mentioned in the Judge's order. Great stress is laid on the words "after such preliminary enquiry, if any, as he thinks necessary" in Section 70 as it now stands. In order to understand what is meant by those words in the section it may be necessary to go back into the history of Section 70 of the Act. In the Act of 1907 Section 43 which dealt with offence in the course of insolvency proceedings, provided thus: If a debtor, whether before or after the making of an order of adjudication wilfully makes false entries in the inventories, &c., the Court may sentence him, by order in writing, to simple imprisonment for a term which may extend to one year; and in every such case the Court shall record the facts constituting the offence with the statement (if any) made by the debtor.

(3.) In practice the wording of the section was found to be vague and unworkable and it was, therefore, considered necessary to make it more explicit. Section 43 of the Act of 1907 was accordingly replaced by Section 70 of the Act of 1920. That section provided as follows: Where the Court is satisfied that there is ground for enquiring into any offence referred to in Section 69 the Court shall direct that a notice be served on the debtor in the manner prescribed in the Criminal P. C., 1898 for services of summons calling upon him to show cause why a charge or charges should not be framed against him.