Decided on January 19,1954

Hazarimal Bhanwarlal And Another Appellant
Dr. Dattraya Chintaman And Others Respondents

Referred Judgements :-



Chaturvedi, J. - (1.)IN this case the insolvents Hazarimal and his son presented their petition for absolute discharge; but the Additional District Judge, Indore, refused to grant it, and the insolvents have filed this appeal against the order of the Additional District Judge.
It appears that Hazarimal had a Kirana Shop and he sustained a loss of Rs. 15,000/ - in it. He then incurred heavy debts amounting to Rs. 29,634/ - out of which debts amounting to Rs. 13,600,' - only were secured. The appellants were adjudged insolvents on 15 -6 -1948 and when they applied for absolute discharge this was not granted.

(2.)SECTION 42, Provincial Insolvency Act (Act 5 of 1920) which is now in force in this State lays down that the Court shall refuse to grant an absolute order of discharge on proof of any of the acts mentioned in nine clauses of sub -s, (1) of this Section.
From the order of the Additional District Judge, it appears that he thought that cl. (b) applied as the insolvent

omitted to keep such books of account as are usual and proper in the business carried on by him and as sufficiently disclose his business transactions and financial position within the three years preceding his insolvency.

From Hazarimal's statement and from the reports of the Official Receiver in this case, it is clear that the insolvents had a good business. They were selling commodities worth 150 rupees per day and there were goods worth at least Rs. 5000/ - in the shop. The insolvents produced no accounts of receipts and expenditure and Hazarimal stated that as he is not literate he maintained no accounts of the shop.

In our opinion, it is highly improbable that he did not maintain any accounts in a shop which was doing considerable business in Indore. In - - 'Ex -parte Campbell, In re, Wallace',, (1886) 15 QBD 213 (A) Brett, M. R. observed:

In my opinion, the not keeping of books is one of the greatest of offences which can be committed by a trader. It is said that it is a very common thing for traders not to keep books; it may be so in the case of traders who become bankrupt. It shows the utter recklessness of a man who does so; it shows that he is carrying on business with an utter disregard of the interests of any one but himself.

So either the insolvents were reckless in carrying on business or, they had kept accounts hut did not produce them, and, if this is the case then, as observed in - - 'Sevugan v. Kasi', : AIR 1931 Mad 344 (B) by Anantakrishna Ayyar at p. 351 the Court should not be too ready to help such insolvents in the matter of getting their adjudications annulled. We therefore do not see any ground of interference in this appeal.

(3.)MR . Newaskar, however, urged for a conditional discharge. If the insolvents had placed the whole of the property at the disposal of the creditors for distribution in the insolvency proceedings and would have assisted Official Receiver, we would have certainly considered the question as to how to give them a chance of starting again in life. But the insolvents' consistent behaviour in this case does not encourage jus for considering whether an order of conditional discharge be passed in this case.
The insolvents were allowed in this case by the Court to continue their trade but were directed, to keep regular accounts and produce them every month. They did not obey this order. Hazarimal was asked by the Official Receiver on 29 -7 -1948 and on 15 -1 -1948, and, by the Court on 4 -12 -1948, to keep accounts but the orders were never complied with.

Even the goods in the shop were sold by the insolvents without the permission of the Court. The records also show that after their adjudication Hazrimal failed to appear before the Official Receiver on 6 -1 -1949 when summoned to do so and did not assist him in any way. In our opinion, those insolvents who behave in this way do not deserve any lenient treatment and so no case has been made out for a conditional discharge in this case. We therefore dismiss this appeal with costs.

Shinde C.J.:


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.