HAJI FIDAHUSSEN Vs. LAKHMICHAND
HIGH COURT OF MADHYA PRADESH
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Nevaskar, J. -
(1.) THIS appeal is preferred against an order refusing to grant an absolute discharge to the Appellant insolvent. The facts found by the Court below are that the Petitioner had represented his debt to be about Rs. 6,000. His creditors had proved this debt against him to the extent of Rs. 2,283 -13 -3. The Petitioner owned a grocery shop. This was sold by him for Rs. 3,200 before he submitted his petition in the Insolvency Court. He failed to produce his accounts either before the Receiver or the Court.
He said he did not keep accounts and stated the reason for his indebtedness to be that most of his customers went to Pakistan. This meant he had given goods to them on credit and in that event it is not possible to believe that he kept no accounts. On these facts the Court accepted the suggestions of the Receiver that the conduct of the Petitioner was not bona fide and refused to grant him an absolute discharge.
(2.) THE only point pressed in this appeal is that the Court below was not justified in refusing to grant to the appellant an absolute discharge. He could have suspended the operation of his order of absolute discharge for some stated period or could have granted conditional discharge. An order which neither suspends nor grants an order of discharge, may be with a condition, is not legal. At any rate, it is said, it is not proper. It is clear from the finding of the Receiver and the Court that the insolvent has neither produced before the Court the accounts in respect of his business nor accounted for the loss of his assests immediately before his application in the Insolvency Court. The Petitioner, therefore, was not entitled to an order for his absolute discharge. the next question is ought he be granted a discharge conditionally.
In my opinion there are no materials produced to indicate what his future earnings would be. It has not been shown that he earned enough to maintain himself and his family and that there would be something left for payment to his creditors. There did not appear to be any probability from the material produced that the insolvent would be in a position to comply with any condition if imposed.
The conduct of the insolvent was not bona fide. He sold all his assets just before launching insolvency proceedings. He failed to produce accounts. The Court therefore was fully justified in refusing to grant him absolute discharge. Moreover, there was no point in granting him discharge subject to conditions. Nothing was shown to justify imposing of conditions. There was no prospect that conditions if imposed will be complied with.
(3.) SECTION 41, Provincial Insolvency Act is as follows:
(1) A debtor may, at any time after the order of adjudication and shall, within the period specified by the Court, apply to the Court for an order of discharge, and the Court shall fix a day, notice whereof shall be given in such manner as may be prescribed, for hearing such application, and any objections, which may be made thereto.
(2) Subject to the provisions of this section the Court may, after considering the objections of any creditor and where, a receiver has been appointed, the report of the receiver:
(a) grant or refuse an absolute order of discharge; or
(b) suspend the operation of the order for a specified time, or
(c) grant an order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the insolvent, or with respect to his after acquired property.;
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