003-NLR-NLR-V-31-PERERA-v.-VALIAPPA-CHETTY.pdf
Present : Fisher C.J. and Drieberg J.PERERA v. VALIAPPA CHETTY
43—D.. G. Kalutara, 239.
Insolvency—Protection—Insolvent . incustody—Noticeto creditor
Adjudication—Necessity to surrender and conform.
A debtor who is in custody is not entitled to be discharged onbeing adjudged an insolvent without notice to the detaining creditor.
Protection is not a necessary consequence of adjudication.It can be granted to an insolvent only after he has surrenderedand conformed.
PPEAL from an order of the District Judge of Kalutara.
Rajapakse, for insolvent, appellant.
N. E. Weerasooria, for creditor, respondent.
June 28, 1929. Driebeeg J.—
On November 27, 1928, at 9 a.m., the appellant was arrested atKalutara on a warrant in execution of a money decree obtainedagainst him by the respondent in D. C. Colombo, No. 21,610;after his arrest and while he was in custody these proceedingswere initiated on the petition of a creditor, L. James Perera, forthe adjudication of the appellant as an insolvent.These facts
appear in the affidavit of the respondent and are not challenged.The act of insolvency relied on was a declaration of insolvencymade by the appellant and attested by his Proctor. The declarationwas submitted with the motion by the petitioning creditor foradjudication. – This appears from the Secretary’s note on the motionpaper of the petitioning creditor’s Proctor. On the declaration ofinsolvency is a note by the Secretary that it was filed at 12.10on November 27. The declaration is imperfect in not stating thehour and day on which it was signed by the appellant, and,- further,it was not filed by the appellant but submitted by the petitioningcreditor.
Oh the motion paper of the petitioning creditor’s Proctor thereappears the following note : “ Allowed. Protection till 21/12/28.Notice served 29/1/29. ” The formal, order signed by the Judge,in a printed form, fixed two sittings, on' December 21, 1928, andJanuary 28, 1929, for the insolvent to surrender and conform;a special order of protection as provided for by section 36 of theInsolvency Ordinance and limited to December 21, 1928, was alsomade.
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1929. Later in the day the appellant was produced before the DistrictDriebero J. Court of Colombo by the Fiscal, when the appellant resisted his—— commitment on the warrant on the ground that he had obtainedVdtappa protection in these proceedings. The respondent desired toChetty question the regularity of the grant of protection, and the appellantwas allowed to stand out on bail pending steps for this purposebeing taken by the respondent.
The respondent then moved in these proceedings to have, theappellant’s protection withdrawn on the ground that it was grantedwhile the appellant was in custody on a warrant and that theappellant could obtain protection on his application only afternotice to the respondent. On this application the Judge madeorder' withdrawing protection. He said that if he had known thatthe appellant was in custody at the time he would not have allowedprotection, by which I understand from the argument before himthat he would not have allowed protection without notice to therespondent, on whose warrant he was then under arrest.
Allowing that the order for protection was otherwise regular,the Judge was quite right in* withdrawing it for this reason. ■ Adebtor who is in custody is not entitled as of right to a dischargeupon adjudication, and the detaining creditor, being interested,is entitled to be heard, Ex parte Preston 1 and In the Insolvency ofHadjiar Abdul Caffoor. 2 There is good reason for this, for theInsolvency Court can refuse protection, among other grounds,if the arrest of the insolvent is on a judgment passed against himfor a debt contracted by frpud or breach of trust. The only personwho ordinarily will hate knowledge, and would be interested ininforming the Court, of the nature of the debt on which the insolventis in custody is the execution creditor who caused his arrest.
On this ground alone, I think, the order of the District Judge isright and that the appeal should be dismissed.
But the order for protection was one which the Court had no■ power to make. The insolvent never appeared before the Courtwhen this order was made. Protection is not a privilege which apetitioning creditor obtains for a debtor on obtaining an adjudicationbut one which an insolvent can obtain onlyv by surrendering andconforming; it is not a necessary consequence of adjudication.In the notice of adjudication two public sittings are appointedfor the insolvent to surrender and conform in case , he does notdispute the adjudication and after he is served with notice of it—section 30, Insolvency Ordinance; but he can at any stage beforethis surrender to Court—section 31.“ Surrender is a personal
act; the insolvent must “ sign and subscribe the surrender, ” andif an insolvent fails to surrender after publication of the notice ofadjudication he is guilty of an offence punishable under section 147Hmi) V. L. T. 89.2 {1903) 11 N. L. S. 353.
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of the Ordinance. The provisions, of sections 86 and 37 show clearly 19B& .that protection cannot be granted to an insolvent until he has crieberg J,
surrendered.—
_Pereira v.
To conform is to consent to and assist in the conduct of the Valiappa
proceedings; an insolvent might get protection by surrender, but Ghettythe Court may at any time thereafter withdraw protection if hisconduct indicates that he is. not conforming to the proceedings,by such acts as withholding information from the assignees,concealing books, or otherwise obstructing the administration ofhis estate.
The appeal is dismissed with costs. It i6 open 'to the' appellantformally to surrender and apply for an order of protection withnotice to the respondent.
Fisher C.J.—I agree.
Appeal dismissed.