BRIJI KESSOOR LAUL Vs. OFFICIAL ASSIGNEE OF MADRAS

JUDGEMENT

(1.) The insolvent arranged with his creditors by paying them four annas in the rupee, that they should give him a receipt in full discharge of their debts. It has been ruled both in England and India that such a payment is not " payment in full," within the meaning of Section 21 of the Presidency Towns Insolvency Act corresponding to Section 35 of the English Bankruptcy Act. See In re Subrati Jan Mahomed (1912) 15 Bom. L.R. 748, In re Shivalal Rathi (1917) 19 Bom. I.L.R. 365, In re Flatan : Ex-parte Official Receiver (1898) 2 Q.B. 219, In re Hester: Ex- parte Hester 22 Q.B.D. 632 and In re Keet (1905) 2 K.B. 666. This cannot be said to be a case in which the debtor ought not to have been adjudged insolvent, for the adjudication was made on his own application and clearly he was unable to pay his debts, But then it is urged that we must treat it as a composition under Section 28 and pass an order annulling the adjudication under Section 30. Clearly however it is not a case of composition within the meaning of the Act. There was no proposal so far as we can gather from the materials placed before us, for a composition submitted to the Court and we do not find that the Court, proceeding as directed by Sections 28 and 29, approved of any such proposal. It is only when the Court has approved of a proposal for composition properly submitted to it that it may annul the adjudication. Then it is said that we have a sort of general discretion to annul an order of adjudication if we are satisfied that the conduct of the insolvent has not been in any way fraudulent or dishonest. But even supposing there was such a general discretion, on which question we have not been referred to any decision, the Court has no opportunity of examining the insolvent in this connection so as to form a proper conclusion as to his conduct. The petitioner seems to have misconceived his remedy, for he proceeded to present an application for withdrawal of the petition, and he also seems to have been under the impression that it was enough for his purpose if he could get his creditors to give him a discharge for their debts. That is not sufficient in law as has been pointed out in all the cases referred to.

(2.) We must, therefore, dismiss the insolvent s appeal. It will be open to him to make a proper application before the insolvency Court.

(3.) The Official Assignee will be entitled to the costs of the appeal out of the estate.