The Official Assignee of Madras vs Narayana Goundan and Others

Victor Murray Coutts Trotter, C.J.—This is a perfectly plain case. It is to my mind an audacious attempt to evade the-plain provisions of the

Insolvency Law in this Court. The insolvent was adjudicated and, of course, his estate vested in the Official Assignee who brought proceedings

calling upon certain persons whom he alleged to be debtors to the bankrupt''s estate to discharge their obligations. While those proceedings were

pending, an arrangement was come to, to which the Official Assignee was a, party whereby, ''on payment of certain sums of money into the hands

of the Official Assignee for distribution among the creditors, a composition was arrived at and the bankrupt got his, discharge. It is now sought by

the Official Assignee to go on with those pending applications against the debtors to the bankrupt''s estate for the benefit of the creditors who have

accepted what they have already had as a full discharge in satisfaction of their claims. It is obvious that such a thing cannot be done. A Bankruptcy

Court both in England and in India does very often pass conditional orders of discharge which keep alive remedies on one side or the other. Such

have been some-of the cases which have been mentioned to us where funds already in the hands of the debtors are earmarked for certain

purposes on the one hand and where orders are passed keeping open the remedy to the bankrupt''s estate conditional until certain other debtors of

the bankrupt whose money has not been collected are made to pay their debts. Here no provision was made in the order of discharge for keeping

alive the seisin of the bankrupt''s estate in the hands of the Official Assignee, still less in the form of safeguarding his rights of suit against these

persons against whom the applications were made. It seems to me the only conclusion that can be drawn is that, when the Official Assignee carried

through that Compromise, he deliberately intended to, release his hold on those assets, which are after all only potential assets of the estate in his

hands. What remedies the bankrupt himself may have against these alleged debtors it is not our province to inquire. It may be that they are all

barred by limitation. This much is clear, that in the light of what has taken place it does not lie in the mouth: of the Official Assignee to say that the

bankrupt''s estate is hr any way vested in him so as to enable him to prosecute proceedings to recover additional sums of money over and above

those provided for distribution in the compromise for the benefit of the bankrupt''s estate. That being so, the learned Judge''s decision is quite

correct and these appeals must be dismissed.

Ramesam, J.

I think this case illustrates the inconvenience of Garnishee proceedings. If the Official Assignee had filed suits, the insolvent has merely to bring

himself on the record to continue again and there is no question Of any fear of those suits being barred.