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1MT.Present: Wood Renton C.J. and Shaw J.
In re the Insolvency of Arnolis Appu.
27'—D. C. Oalle, 422.
Insolvency—Power of assignee to delegate his duties to an. attorney—'Assignee’s report based on the ' results of inquiries made fromoutsiders—Groundsof opposition should be specifically stated—
Amendment oflawrelatingto bankruptcy andimprisonment for
An assignee appointed under – the Insolvent Estates Ordinance,1853,1 cannot delegate his duties to an attorney or other agent.
An assignee’sreport Bhouldnot be based oninformation which
has been gathered from *' outsiders. “
rj-lHE facts are set out in the judgment.
M. de Saram, for insolvent, appellant.—In this case a provedcreditor, Palaniappa Chetty, was appointed assignee by the Court,but the report of the assignee is made By his attorney, Petha-perumal Pillai. The assignee himself is out of the Island, and itis submitted that the law does not permit of the delegation of theassignee’s dutiestoa thirdparty. (Archibald,on Bankruptcy
513.) The assigneehas noright -to importinto his report
information he has gathered from “ inquiries made from outsiders.’,’The learned Judge has also considered an objection raised byhimself, which was not embodied in the notice of opposition givenby the opposing creditors, viz., putting one of the creditors ofthe insolvent to unnecessary expense by making him a respondentto an application for discharge. This is an offence under section151 of the Ordinance, and should have been specifically chargedagainst the insolvent and an opportunity given to him to meet it.
E. W. Jayewardene, for assignee, Respondent.—The assignee hasmade the report his own. There has been an exhaustive inquiry.These objections should have been taken in the District Court, andthey must be taken to be waived. No prejudice has resulted.
Cur. adv. vult.
May 25, 1917. Wood Renton C.J.—,
This is an appeal by an insolvent against the refusal of the District«Judge of Galle to grant him a certificate of conformity. Thefappellant was adjudicated insolvent under section 20 of the InsolventEstates Aot, 1853,1 on the footing that his estate would be able to
1 No. 7 of 1853.
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pay Us. 5 in the pound. The learned District Judge held on the1917.
■evidence that this representation was untrue, but proceeded, never-Wood
theless, with the examination 'of the .insolvent. The first point Reotcoh CJ.taken in support of the appeal is that under the section above jn re thementioned he should have annulled the adjudication. I am not Insolvency ofsatisfied that the District Judge considered the representation inthe appellant's petition otherwise than under section 124 of the Act,
.and there are allegations in regard both to his conduct as a traderand as to the' commission by him of statutory offences which, ifsubstantiated, would justify the refusal of a certificate -of conformity.
But there have been irregularities in the proceedings which mayhave prejudiced the appellant's position in the District Court. Inthe first place, while Palaniappa Che tty was appointed assignee, theexamination of the insolvent was conducted, and the assignee’sreport was presented, by his attorney Pethaperumal Pillai, a pro-ceeding for which neither statutory nor judicial authority is to befound. On the contrary, the Insolvent Estates Act, 1853,1 requiresan assignee to be appointed., and he clearly has no power to delegatehis authority to any one else. In the next place, the assignee'sreport is based, not merely on evidence, but also on the results of" inquiries made from outsiders, ” which are clearly inadmissible.
Finally, the learned District Judge has taken account against theappellant of an allegation that he had put one of his creditors tounnecessary expense by malting him respondent to a dishonestapplication for discharge. This allegation was not embodied in•either of the notices of objections to the grant of a certificate whichwere filed in the District Court, nor was he clearly confronted withit in the proceedings.
I would set aside the order appealed against, and send the caseback to the District Court for the appointment of an assignee, bywhom personally the appellant shall be examined and the reportpresented, and for further proceedings in due course. None of thepoints urged upon us here was taken at the hearing, or in thepetition of appeal, and there should be no costs of this appeal in anyevent. If any other questions of costs should arise, the DistrictJudge will exercise his discretion in regard to them.
The number of insolvency appeals and the frequency with whichthe findings of courts of first instance in such, cases have to beinterfered with involve a serious waste of their time and ours, but,as matters stand, can scarcely be avoided. I called attention to thecause of these evils as far back as 1908 in the case of PHchetambyv. Abdulla * and my Brother Shaw has recently emphasized the samelinp of argument. The Insolvent Estates Act, 1853,3 is archaic,and completely out of touch with the requirements of modemcommercial life. No rules of practice can now with advantage be^
» No. 7 of 1868, s. 66.
a (1908) 11 N. L. B. 205.
* No. 7 of 1858.
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framed under it, and the' courts of first instance have had to workWoop °ut a CUT8U8 ounce for themselves, the lines of which have not alwaysRknton C.JT. been uniform or satisfactory. Is it too much to hope that theIn re the legislature will ere long bring the bankruptcy law of the Colony
Insolvency of into line with that of practically every other part of the Empire ?AmeliaAppu
I entirely agree. The duties of an assignee are somewhat vaguelystated in the Insolvent Estates Ordinance, 1858,1 and are often verymuch neglected in practice.
The assignee has, however, important duties to perform in getting*in the insolvent’s estate, and in assisting the Court in the insolvencyproceedings, and his report is always taken into consideration bythe Court on the question whether or not a certificate shall begranted.
It is clear that the assignee cannot delegate his duties to anattorney or other agent. In the present case Palaniappa Chetty,the assignee, has taken no part in the proceedings, and is said noteven to have been in Ceylon since the date of his appointment.It may be a convenient method for Chetties'to carry on their ownbusiness here by means of agents, but if appointed assignee- underthe Ordinance they must act personally.
I am in complete accord with the observations of my Lord as tothe necessity for an amendment of our law. The present law in forcein this Colony, relating both to insolvency and to imprisonmentfor debt, is not only a source of great trouble and perplexity to thosewho have to administer it, but is entirely out of harmony with therequirements and ideasVOf modem times.
' No. 7 of 18S8.
In re the Insolvency of ARNOLIS APPU