Present; Bertram C.J. and De Sampayo J.
In re the Insolvency of Nadabajah.
1J3—D. C. Colombo, 2,979,
May opposing-creditor call insolvent Os witness to prove hie charge# atthe certificate meeting!—Power of Supreme Court to set asidea certificate—Insolvency Ordinance, 88. 89 and 199.
At the certificate meeting the creditor opposing the allowanceof a certificate cannot call the insolvent into the box to examinehim to prove his charges against the insolvent.
T HE second sitting was closed on June 28, 1921, and certificatemeeting was fixed for July 26, 1921. The appellant gavedue notice on July 21, 1921, that he would oppose the granting ofthe certificate on certain grounds which he specified. On the dayappointed for the certificate meeting, the appellant's Counselmoved to examine the insolvent who was present in Court inregard to the various grounds on which the appellant based hisopposition. . The District Judge (A. Beven, Esq.) held that as thesecond sitting was closed, the insolvent could not he examined tillthe opposing-creditor had led evidence to prove the charges framedagainst him; and that, then, the insolvent can be called to rebutthe charges brought against him.
The opposing-creditor appealed.
Samarawickreme, for the appellant.
Jayawardene, K.C. (with him Alivis and Siriwardene), tor therespondent.
( 436 )
1988. February 7, 1922. Bertram C.J.—
itoofrency* This is an appeal against an order of the District Court of ColomboofNadarajah refusing an application made on behalf o£ the opposing-creditorin an insolvency case for permission to examine the insolvent onthe occasion of his application for a certificate. The learnedJudge refused that application. He said: “ I hold that as the lastsitting was closed, the insolvent cannot be examined now, till theopposing-creditor has led. evidence to prove the charges framedagainst him. He can, in my opinion, only be called to rebut thesecharges.*’ The only thing before us is an appeal against thatorder, and we can only say that that order is absolutely correct.The Insolvency Ordinance makes various provisions for. the exami-nation of the insolvent debtor in the course of the proceedings.But it is specifically declared in section 89 that the last examinationof the insolvent shall be the second public .sitting of the Court;and this second public sitting was over long before this applicationwas made. Moreover, the learned Judge was acting in entireaccordance with a previous unreported decision of this Court.The opposing-creditor appears to have been very unfortunate in thelegal advise which he received in the course of the proceedings.He had, it seems to me, repeated* opportunities of putting his possiblylegitimate grievances forward, and of submitting the bankrupt toa searching examination. Those who appeared for him did notthink it necessary to take advantage of those opportunities, andeven when the insolvent was examined, he was not cross-examinedon behalf ‘of the opposing-creditor. There is no doubt that on thatground he changed his legal advisers. But the subsequent historyappears to have been no more fortunate, because his case wasstaked upon a legal point, namely, his claim to examine the insol-vent at that stage of the proceedings. Having so staked his case,those who represented him, although they appear to have beenin Court at the time when the Judge proceeded to inquire intothe question of the issue of a certificate, or, at any rate, on thesame day, did not bring any evidence forward, and, when theorder for the issue of the certificate was finally made, did notappeal against it. It seems to me that we cannot- do anythingmore in this case, than give our judgment in the appeal.
Mr. Ssmarawickreme, however, has invited us to go further,and to act under section 129, which gives a special power to- theSupreme Court, within six months after a certificate has beenissued, to set it aside. No doubt these proceedings are not fortunateproceedings. They are in accordance with the standard of pro-ceedings in insolvency cases which the Courts of this Colony haveunfortunately adopted. They have been frequently made thesubject of comment in this Court. In my opinion, the presentstandard of insolvency proceedings is not creditable to the Courts
( 437 )
of this Colony. In this very case there has been no assignee’s 19B8*report. The Court knows nothing about the bankrupt’s affairs, Bebtbavbeyond what it can gather from the balance sheet. It hasnot c<
thought it necessary (and, indeed, in a busy Court such a course /» re theis hardly practicable) to act on its own intentions and to assumeresponsibility for the examination of the bankrupt’s affairs, and /consequently a certificate has been issued, which does not repre-sent any considered determination of the Court, and does notreally imply that the bankrupt really deserves it. But what weare asked to do now is, on an appeal against one order of thelearned Judge, to take special action under a very, special section,intended for special circumstances, without any notice having beengiven to the insolvent, and without this Court having been ap-proached in a formal way. The application is simply made inthe
course of the speech of learned counsel for the appellant whohas
addressed us. Whatever may be. the defects in the proceedings,
I do sot think that this is the way in which this section should beset in operation. If those who advise the opposing-creditor wishto. approach the Court under that section, they must do so formally,though, in view of the history of the case, I am not to be taken assuggesting, even if this action is taken, they are likely to take itwith success.
In my opinion, the appeal against the order of the learned Judge,declining to allow the opposing-creditor to examine the bankruptin the proceedings for the issue of a certificate, must he dismissed,with costs.
Be Sampayo J.—I agree.
In re the Insolvency of NADARAJAH