MOHAN LAL Vs. MADHAVA PRASAD

JUDGEMENT

(1.) This is an appeal against an order passed by the learned District Judge of Benares on 25 October 1929 annulling an order of adjudication passed in respect of one Mohan Lal under the Provincial Insolvency Act, 1920.

(2.) Mohan Lal presented an insolvency petition on 26 November 1924. He showed the debts due from him as about Rs. 32,000, and showed assets, mainly in the shape of debts due to him, amounting to about Rs. 24,000. On 21st November 1925 the District Judge adjudged the applicant an insolvent and ordered him to apply for his discharge within one year. The applicant did apply within the prescribed period. The period was extended from time to time upon the motion of the official receiver and successive applications for discharge were made. The last application was made on 17 September 1929. On 8 April 1929 the official receiver submitted a report recommending; that "as the actions of the insolvent have-not been very fair and straightforward," the insolvency should be annulled, or the insolvent should be discharged and permission should be granted to the official receiver to sell the assets of the insolvent.

(3.) The learned District Judge found that the insolvent had been dishonest in his dealings. The insolvent stated that he had sold Rs. 9,000 worth of goods to a, certain State without obtaining any receipt and without making any note of it in his account books, or keeping any memorandum of the transaction, and these omissions showed, in the Judge s. opinion, that the insolvent was dishonest. Moreover the Judge found that an item of Rs. 10,000, which was shown in the schedule as being due from a certain Raja, had been paid by the Raja into the Treasury, but had been refunded in the year 1923. The District Judge remarks that it is not clear to whom the money was paid, but apparently he held that it must have been paid to, the insolvent himself. The District Judge states that either the insolvent has no assets, which shows that he was entering recklessly into transactions with various persons and incurring debts which he never hoped to pay, or that he has realized all the. amounts and has destroyed his account books so that no evidence may be available. Upon these grounds the Judge-annulled the adjudication.