MTohamed v. Ramasamy Chettiar.
1932Present: Macdonell C. J. and Dalton J.
MOHAMED v. RAMASAMY CHETTIAR et al.
17—D. C. (Inty.) Colombo, 3,795.
Insolvency-rSupreme Court refuses certificate—Appeal to Privy Council—Power of District Court to grant protection—Ordinance No. 7 of 1853,ss. 32, 132, 133 and 152.
A District Court has no power to grant protection to an insolvent towhom the Supreme Court has refused a certificate, while an applicationby him to the Privy Council for leave to appeal is pending.
^^PPEAL from an order of the District Judge of Colombo.
N, E. Weerasooria, for creditor, appellant.—A District Court has nojurisdiction to extend protection after a certificate has been refusedby the Supreme Court. The protection granted is a temporary pro-tection till the question of the grant of a certificate is considered. Onceit is refused no question of further protection can arise. The orderfinally made is an order of the Supreme Court and the Court which haspower then to grant protection is the Supreme Court and not the DistrictCourt (Hamil v. Lilly1). The material on which the application wasgranted is entirely insufficient.
N. Nadarajah, for insolvent, respondent.—Either the District Judge' iscompletely functus officio as soon as he refuses a certificate or he has somefurther power to grant protection pending an appeal to the SupremeCourt. He can according to the Ordinance grant protection till thecertificate is allowed; .An insolvent has a right to appeal to the SupremeCourt. He has also a right to appeal to the Privy Council. The DistrictJudge can grant protection pending the appeal (Ex pUrte Nicholson *). TheDistrict Judge has the right to grant protection even after he refuses acertificate till the Supreme Court grants or refuses a certificate. Evenwhere the Supreme Court refuses a certificate the District Judge cangrant it on the ground that the presence of the insolvent is necessaryfor the assistance of the assignee. If a person has a right to appeal to1 19 Q. B. D. 83.- Dr Gex. Fisher Jones 270.
MACDONELL C.J.—Mohamed v. Ramasamy Chettiar.
the Privy Council and the Judge is satisfied that his freedom from arrestis necessary for him to prosecute his appeal, he has a right to grantprotection. The District Judge is satisfied that the insolvent is makingbona fide endeavours to prosecute his appeal before the Privy Council.
August 4, 1932. Macdonell C.J.—
This appeal involves construing the Insolvency Ordinance, No. 7 of1853. particularly sections .36, 132, and 152. The facts were as follows: —The respondent was made insolvent on November 21, 1927, and waseventually granted a certificate of conformity of the second class by theDistrict Court of Colombo, on December 18,1930. The creditors
appealed to the Supreme Court against this grant of a certificate, andtheir appeal was allowed and a certificate refused, by order of June 10,1933. The insolvent then applied to the Supreme Court for conditionalleave to appeal to the Privy Council against the order of the SupremeCourt of June 10, 1931, refusing him a certificate, but the SupremeCourt refused to give him this leave by an order of August 6, 1931.The insolvent then applied to the Privy Council itself for leave to appealto it and on September 2, 1931, applied to the District Court for protec-tion from arrest under section 36 of the Ordinance till the determinationof this application to the Privy Council. The District Court grantedhim this protection by an order of October 5, 1931, the protection to be.for three months, conditioned on his entering into a bond for Rs. 1,000with one surety. It is from this order of October 5, 1931, grantingthe insolvent protection that the present appeal dated October 10, 1931,is brought. To continue the statement of facts. On November 9, 1931,the insolvent obtained from the Privy Council leave to appeal to itconditional on his depositing £400 as security for the costs of the appealbut he had not up to the date of this appeal deposited that or any sum.On June 18, 1932, he applied to the Privy Council for leave to appealin forma pauperis.
It will be noticed that since the protection granted the insolventon October 5, 1931, was for three months only, it expired on January 5,1932, several months before this appeal could be heard, consequentlywhen the appeal was heard, it was an order no longer operative. Nonethe less the appeal was pressed on the ground that the District Court,when it granted protection to the insolvent, had no longer any jurisdictionto do so.
This argument seems well founded. Section 36 secures the insolventfrom arrest or imprisonment by any creditor when he surrenders “ andfor such further time as shall be allowed him for finishing his examinationand for such time after finishing his examination until his certificatebe allowed as the Court (i.e., the District Court) shall from time to time. . .. think fit to appoint ”. The District Court had jurisdiction
then to grant the insolvent protection up to the date when it allowedhim a certificate of conformity, which was on December 18, 1930. Butthe order allowing insolvent a certificate may be appealed against, asthis one was, and this case is provided for' in section 132. “ No suchcertificate shall be delivered to the insolvent, until after the expirationof the time allowed for entering an appeal ; and if an appeal be duly
MACDONELL C.J.—Mohamed v. Ramasamy Chettiar.
entered against the judgment of such Court for the allowance of thecertificate or for the refusal, the witholding or the class of the certi-ficate the certificate shall be further kept by .the Court
and abide the judgment of the Supreme Court thereupon Accordingthen to sections 36 and 132 the District Court may grant the insolventprotection “ until his certificate be allowed ” and this in the event ofappeal to the Supreme Court will not happen until the Supreme Courthas confirmed the order of the District Court granting him a certificate,the protection granted by the District Court under section 36 will lasttill then. But in this case the Supreme Court has reversed the orderof the District Court and instead of allowing has refused the certificate.This case is provided for by section 152 which, after stating who arejudgment-creditors, goes on:—“The Court (i.e., the District Court)when it shall have refused to grant the insolvent any further protectionor shall have refused or suspended his certificate shall on the applicationof …. any such creditor, grant a certificate in the form R
in the schedule to this Ordinance annexed, ” i.e., a certificate entitlingthe creditor to whom it is granted to issue a writ of execution against .the person of the insolvent. Now the position here is that the Court(i.e., the District Court) has refused the insolvent a certificate, sincethat is the effect of the order of the Supreme Court of June 24,1931, which reversed the order of the District Court allowing him acertificate. Can the District Court now grant him protection sinceit has refused him a certificate ? • It would seem not. Clearly thissection 152 confers no power on the District Court to grant pro-tection or to issue a certificate of conformity ; those powers must besought in other sections of the Ordinance. All this section does'is to enable the District Court to grant a certificate in form R if oneor other of certain conditions has been fulfilled, and in the present caseone of those conditions has been fulfilled, a certificate of conformityhas been refused. The only section to which the attention of the Courtwas directed during this appeal as enabling a District Court to grantprotection to an insolvent is section 36, and that section says clearlythat protection may be granted until the certificate of conformity isallowed, it gives no further powers' to a District Court of grantingprotection to an insolvent. Then it would appear to follow that – inmaking the order of October 5, 1931, granting to the insolvent a certi-ficate of protection, after it had refused him a certificate of conformity—that was the effect of the order of the Supreme Court reversing theprevious allowance of a certificate of. conformity—the District Courtwas doing something which under this Ordinance—the sole law whichenables it, under section 64 of the Courts Ordinance, to adjudicate oninsolvency matters—it had no power to do. If so, the certificate ofprotection granted by it on October 5, 1931, was wrong and must beset aside.
In this connection section 133 of the Ordinance No. 7 of 1853 seemsimportant—” The allowance of the certificate by the District Courtand any order for the refusal or – suspension of the allowance thereof(except in case of appeal), shall be final and conclusive, and shall not berevised by the District Court unless the said Court shall thereafter see
Saibo v. Peiris.
good and sufficient cause to believe that the allowance of such certi-ficate, or the refusal or suspension thereof, has been obtained on falseevidence, or by reason of an improper suppression of evidence, otr hasotherwise been fraudulently obtained, in any of which cases it shall andmay be lawful for the*. District Court, …. to grant a rehearing:of the matter, and to rehear the same accordingly ”. It will be noticed^that this section makes the allowance or refusal of a certificate ofconformity by a District Court final and conclusive. If it allow a certi-ficate, protection becomes unnecessary; if it refuses the certificate,then section 156 becomes operative and it must grant a certificate in.form R allowing the imprisonment of the debtor. If on any of thegrounds set out in this section 133 it grants a rehearing of the applicationfor a certificate of conformity, then clearly it can grant protection to theinsolvent during such rehearing, for by section 36 it has power to grantprotection “ until the certificate be allowed ”, and the allowance ofsuch a certificate is the very point for decision on such rehearing. Butthis is the only discoverable provision in this Ordinance which can givea District Court power to grant protection once a certificate of conformityhas been allowed or refused, and there is no suggestion in this case thatsection 133 was being or could be used.
If the insolvent in this case desired protection pending his applicationto the Privy Council for leave to appeal to it, the Court to apply towould seem to be the Supreme Court. The case of Ex parte ThomasNicholson' was cited to us. This seems to decide that when a Courtof first instance has refused a certificate and such refusal has come beforean appeal Court, the proper tribunal to which to make application forprotection is such appeal Court. This was a decision upon the thenEnglish Law of Bankruptcy of 1849, from which our own probablydoes not very much differ. The decision certainly seems to suggestthat if the insolvent in this case desired protection, it is from this Courtthat he should have asked it. If this is so it would be an additionalreason for holding that in this case the District Court had no power togrant protection.
For the foregoing reasons I am of opinion that the District Courthad no power to grant the protection by the order appealed from andthat this appeal must be allowed with costs here and below.
Dalton J.—I agree.
MOHAMED v. RAMASAMY CHETTIAR et al