MAHOMED HAJI ESSACK Vs. SHAIKH ABDUL RAHMAN

JUDGEMENT

(1.) This case comes before us on appeal from an order of Mr. Justice Davar sitting as Judge in Insolvency, dated the 16th of April, 1915, whereby the insolvent after refusal of his discharge and notwithstanding opposition by a judgment-creditor was given an order protecting him from arrest till April, 1916.

(2.) The order refusing the insolvent s application for discharge was passed on a judgment of the 8th of April in which the reasons for refusing discharge were stated and it was shown that numerous facts falling within the categories (a), (b), (c), (d), (f) and (j) of Section 39(2) of the Presidency Towns Insolvency Act had been proved against the insolvent. It was found inter alia that on the day preceding his petition in insolvency the respondent to make good certain defalcations assigned a debt worth Rs. 29,000 and properties worth over two lacs to creditors whom he had defrauded by breaches of trust. The learned Judge stated that he would have tried the insolvent in respect of these assignments under the penal Section 103, if it had not been for the decision of the House O Lords in Sharp v. Jackson [1899] A. which seemed to render a trial on a charge of fraudulent preference hopeless. Nevertheless the learned Judge, because he believed that in almost all cases where the discharge was suspended under the present law, the insolvent had, as a matter of course, been granted protection for the period of suspension, granted protection for twelve months out of the period of two years which would elapse between the order refusing discharge and a fresh application for discharge by the insolvent.

(3.) It is clear that the Court has a discretion in the matter. If an application for protection was necessary in April under Section 25 the Court could have refused it for good cause. If ever there can be such good cause, it seems to me to exist in the present case. There is nothing to be said for the insolvent in face of the findings of the learned Judge. We are moreover informed by the Official Assignee that the learned Judge is mistaken in thinking the insolvent s assistance is required for the purpose of realizing assets. All known assets of value had been recorded before the application for discharge. It would, in my opinion, be dangerous as well as unnecessary to adopt any such rule of practice as the learned Judge believed to exist. Each application for protection after refusal or suspension of discharge must be judged on its merits. The Court has no longer power to permit the imprisonment of an insolvent for two years at the suit of a judgment-creditor as it had under Section 51 of the Indian Insolvent Act: the period of six months is the maximum term of civil imprisonment under the Civil Procedure Code. But if the insolvent has acted as here recklessly and dishonestly the fact that he cannot pay is no reason for depriving the creditor of the power of punishing him by attachment and imprisonment to the extent the law allows : compare Morris v. Ingram (1879) 13 Ch. D. 338 and In re Gent; Gent-Davis v. Harris (1888) 40 Ch. D. 190, cases under the English Debtors Act of 1869. In my opinion the order of protection now under appeal should be set aside. Batchelor J.