085-NLR-NLR-V-25-ARUMUGAM-CHETTY-v.-SILVA.pdf
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1924.
Present: De Sampayo J. and Gaxvin A.J.ARUMUGAM CHETTY v. SILVA.
D. C. Grille, 478.
Application by creditor for recall of a certificate of conformity—Appli-cation should be made within six months of the order of Courtallowing the certificate—Insolvency Ordinance, s. 129.
An application under section 129 of the Insolvency Ordinanceby a creditor for the recall of a certificate of conformity should bemade within six months of the order of the Court allowing suchcertificate, and not from the date of the actual issue of the certificate.
rjlHE facts appear from the judgment.
Samarawickreme (with him Tissaverasinghe), for applicant.
Elliot, K.C. (with him M. W. H. de Silva), for the insolvent.
May 22, 1924. De Sampayo J.—
In this matter we have to decide a new point in the law ofinsolvency. On May 29,1923, the Court made an order allowing tothe insolvent a certificate of conformity of the third class, but thecertificate was drawn up and signed only on June 14, 1923. Theapplicant is one of the insolvent’s creditors, ard on December 14,1923, he applied to this Court under section 129 of the InsolvencyOrdinance, No. 7 of 1853, that the certificate be recalled anddelivered up to be cancelled. Mr. Elliott, for the insolvent, tookthe preliminary objection that the application was out of time,as it was not made within six months of the allowance of thecertificate. If the date of the issue of the certificate is to be takenas the date of its allowance, the application is within the requiredtime, but if the order of the Court is taken to be the allowance of thecertificate, the application is out of time.
Section 129 of the Ordinance is in these terms—
“ At any time within six months after any certificate of confor-mity shall have been allowed, and subject to such order asto deposit of costs as may be made by the Supreme Court,any creditor of the insolvent, or any assignee, may applyto the Supreme Court that such certificate may be recalledand delivered up to be cancelled ; and the Supreme Courtmay, on good cause shown, order such certificate to berecalled and cancelled.”
Mr. Samarawickreme, who appeared in support of the application,has argued that the expression “ any certificate ….shall be allowed ” in the above section means “ any certificate shall
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have been issued,” and that as the present application vas made 1924.within six months after the certificate was issued, it was within de^Sampayotime. There is no doubt that the provision as regards the certificate t Jbeing recalled and delivered up to be cancelled appears to favour Arumugamthis argument. But .this provision is not necessarily inconsistentChetty v.
with the view, which I think is the right view, that the allowance of ^vathe certificate has reference to the order of the Court allowing thecertificate. For the Ordinance apparently intends to provide atime limit for the application by reference to the date of the order,though the object of the application may be to have the certificaterecalled and delivered up. The Ordinance probably contemplatesthe possibility, which in practice is actually the case, that thecertificate may be taken out long after the date of the order ofCourt, and it is thought desirable not to give more than six months’time after the order of the Insolvency Court for applying to theSupreme Court to exercise its powers with regard to a certificatealready issued. Limitation of time is of course quite distinct fromthe remedy available, and it is obviously necessary that thereshould not be too long a delay after the consideration of the questionof allowing a certificate by the District Court for asking the SupremeCourt to consider the question anew.
There are other provisions in the Ordinance which appear to me toshow that this is the real intention of section 129. The expression“ allow ” or “ allowance ” occurs in various other sections of theOrdinance, and refers to the order declaring the insolvent entitledto a certificate and not to the certificate itself or its issue. Forinstance, section 124, which relates to the holding of the certificatemeeting itself, directs- that the Court shall appoint a public sittingfor the <e allowance ” of the certificate, and provides that theassignee or any creditor may be heard against the “ allowance ” ofsuch certificate, and that the Court shall find the insolvent entitledthereto and “ allow ” the same. It also provides that notice of theholding of the meeting and the purport thereof shall be advertisedin the Gazette. I think that these provisions clearly refer to thedecision and order of Court with regard to the certificate and notthe doeument which is afterwards drawn up and delivered to theinsolvent. Then, again, sections 126 and 127 have regard to thedischarge of the insolvent from all provable debts upon the certi-_ ficate of conformity being “ allowed.” There must necessarily besome delay, long or short, before the certificate' is drawn up andissued, and it cannot be supposed that in the interval the insolventwill remain liable for those debts and may be arrested in execution.
Nor can it be urged that the insolvent may obtain the protectionof the Court, for by section 36 the Court :s only empowered to givesuch special protection until the insolvent’s last examination anduntil his certificate is allowed. After all, the drawing up andsignature of the certificate is a ministerial act which is done in
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1924.
Be SampayoJ.
ArumugomChetty v.Silva
pursuance of the order allowing the certificate. It is true that thereis no express provision, as in the case of decrees in civil actions,that the certificate shall be dated the same date as the Court’sorder, but in my opinion, even without such an express provision,the certificate operates from the date of the order. Some guidanceon this point may be derived from ex parte BeU re Laforest 38 L. J.Bankruptcy, p. 50. The Bankruptcy Act of 1861 substituted anorder of discharge for the certificate of conformity under the Act of1849 from which our Ordinance is borrowed. The above casedecides that the date of the order of discharge is the date on whichthe order is pronounced and not the date on which it is actuallydrawn up, and that if any property devolves on the bankruptafter the date of the order of discharge and before it is drawn up, thebankrupt and not the assignee will be entitled to it. The practicalobject of the certificate is indicated by section 131, which enactsthat if the insolvent be arrested or have any action brought againsthim for any such debt he shall be discharged, and he may plead thatthe debt accrued before his insolvency, and may give the Ordinanceand the special matter in evidence ; and that the certificate shall besufficient evidence of the insolvency, petition for sequestration, andother proceedings precedent to the obtaining of such certificate.The certificate is evidence of the order of Court and is intended to beused for the purpose of the insolvent himself, and the creditorshave no real conoem with it. The governing factor always is 4heCourt’s order, and I cannot conceive that in the matter of an appli-cation under section 129 it was intended that this Court shall dealwith the certificate and leave the Court’s order untouched. Mr.Samarawickreme appreciated this difficulty, and argued that the“ allowance ” of the certificate meant the Court's order plus theactual issue of the document. There is, in my view, no reasonablefoundation for tins idea. Even if there was, the period of sixmonths should surely be counted from the date of the Court's orderwhich is admitted to be a necessary and integral part of the allow-ance of the certificate.
1 am of opinion that the allowance of the certificate really is theorder of the Court declaring the insolvent entitled to the certificateand directing its issue, and that the period of six months limited forthe application under section 129 must be taken to commence fromthe date of such order. I am the more inclined to take this viewbecause I think this provision must be construed restrictively asagainst a creditor who is given other special opportunities to opposethe granting of the certificate, as, for instance, at the certificatemeeting and by appeal to this Court.
I would uphold the objection taken on behalf of the insolventand refuse this application, with costs.
Garvin A.J.—I agree.
Objection upheld and application refused.