Hussein Mahomedbhai Khoja vs The Official Assignee of Bombay

John Beaumont Kt., C.J.—This is an appeal against an order made by Mr. Justice Kania in Insolvency. It appears from the Official Assignee''s report, the correctness of which is not disputed, that the facts in sub-ss. (a), (d) and (f) of Section 39 of the Presidency-towns Insolvency Act exist in this case. Therefore, the learned Judge had discretion to suspend the discharge of the insolvent, and to grant, or not to grant, protection. The learned Judge suspended the discharge for two years and refused to grant a protection order in respect of the first year. The debts of the insolvent had all been incurred for gambling purposes, it is said, from professional money-lenders. It is quite clear, in my opinion, that the learned Judge had discretion to make the order which he did make, and I can see no principle on which we should interfere with the discretion which the learned Judge exercised in the matter. It is said that it is very hard to refuse a protection order for the first year; and that the result may be that the insolvent will be sent to prison. But it does not follow that, because a protection order is refused, the Court will commit the insolvent to prison, if an application is made to it in that behalf. I quite agree with the observation of Sir George Rankin in the case of Nagoremull Modi v. Lachmi Narain Gupta (1928) 48 C.L.J. 531, that it is illogical for a debtor to be sent to jail on the application of a single creditor, when the debtor''s assets have been impounded for the benefit of the creditors generally. That is a matter, however, which the Court will consider, if and when an application is made to send the insolvent to jail. As I have said, the mere fact that a protection order has been refused, is not a sufficient reason for the Court to accede to the request of the: creditor that the insolvent should be sent to jail.

The appeal must be dismissed with costs. Costs of the proving creditor, who has. appeared, ought to be paid out of any balance of Rs. 500 deposited in Court remaining after the Official Assignee''s costs have been paid.

Rangnekar, J.

I agree.