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29. On February 8, 1929, *the creditors petitioned the District CourtIrttfkuolemaPPe^an^ be directed to file a balance sheet and account
Ghetoy v. The District Court .thereupon ordered the second appellant to file anWUoon account of the moneys realized by him and not to pay the money tothe assignee'in India without an order from the Court.
H. V. Ptirera, for appellant.
Keuneman, for respondent.
November 27, 1929. Dalton J.—
The appellants here are the assignees of the insolvent estate ofthree persons carrying on business in partnership under the vilasamof *' A. R. A. R. S. M. The respondents are some of the Ceyloncreditors.
The partners, we are informed, are or were domiciled in Indiawhere the principal business was carried on, but there were branchesin Ceylon. The order of adjudication in India is dated June 22,
The first appellant was appointed assignee by the High Courtof Madras in September, 1925. The adjudication in Ceylon isdated August 25, 1925, the second appellant being appointedassignee the same day. On November 13, 1925, the District Judge,Colombo, made an order, on whose application Counsel cannottell us, declaring that the District Court, Colombo, do act in aidof and as auxiliary, to the High Court, Madras, and stating thatit would be convenient if the provisional assignee in Ceylon beappointed attorney of the official assignee in Madras “ to take thenecessary action in this Court.” The second appellant was thereuponappointed attorney of the first appellant in Ceylon, in addition tohis appointment from .the Court. The power of attorney recognizesthat certain property in Ceylon vests in the provisional assignee byvirtue of his appointment as such, and also sets out, perhapsunnecessarily, that any powers delegated to the attorney that bythe law of Ceylon require the sanction and approval of the Courtshould only be exercised after the District Court in Colombo hadgiven such sanction and approval. It is admitted that a consider-able part of the assets in Ceylon consists of immovable property.
Thereafter the winding up proceeded, but slowly. The officialassignee in India appears to have rae.t with difficulties,' but onJanuary 4, 1927, reported to some of the Ceylon creditors, in replyto inquiries as to what progress was being made, that the realizationof .the assets was proceeding favourably and that he hoped to declarea dividend of 4 annas to the rupee within two months. Furtherdelay occurred and as no dividend materialized, and informationwas difficult to obtain, the respondents to this appeal on February8, 1929, petitioned the District Court, Colombo, that .the presentappellants be directed to file an account and balance sheet of all
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moneys in Ceylon belonging to the insolvent with a report as to theposition regarding the disposal of the proceeds, and generally as tothe progress made in the realization of the Ceylon assets. It shouldbe stated here that on January 17, 1928, the second appellantreported to the petitioners that he had the sum of Es. 9,232.09 inhis possession representing proceeds of sale of property and receiptson account of debts. On this petition Counsel appeared for therespondents (present appellants), but there is nothing before us toshow what- position they took up, or even whether they resisted theorder sought by petitioners. The learned District'Judge thereuponordered the second appellant, '* the assignee appointed by thisCourt, ” to file an account of the moneys in his hands realized inCeylon by him, and not to pay that money to the assignee in India orto spend any money on the directions of that assignee without anorder from " this M Court.
The appellants object to this order, and on appeal ask that it beset aside. They urge that the first appellant is directly responsibleto the High Court, Madras, and the second appellant is his attorney,that the District Court, Colombo, by its order of November 13, 1925,declared itself as acting in aid of and as auxiliary to the High Court,Madras, and that it was not open to the petitioners to make anyapplication to the Ceylon Court concerning the action of theappellants. The appellants seem however to have lost sight of thefact, for they make no mention of it, that the second appellant isthe assignee appointed by the District Court, Colombo. Theorder appealed from refers to him alone and. to assets in Ceylonalone, and is in no way an order ■ pon .the Indian assignee or con-cerning the Indian assets. It seems to me to be an order he hadpower to make, and an order which the material before him justified.His intimation at the end of his order to the Ceylon assignee thatfuture applications by him to pay out moneys in his hands- mightdepend upon what was done in India may have been, strictly speak-ing, unnecessary, but I can, under the circumstances here, see noobjection to it. It is in no way an order on a person or in respectof property not subject to the jurisdiction of the Court. It isunfortunate that the estate is taking some years to wind up.Whether the delay has been unavoidable or not it is not possiblefor this Court to say, but it is admitted that some of the Indiancreditors have received a dividend, whilst .the Ceylon creditorshave not. There is nothing before us to support the allegationthat the Ceylon creditors are seeking to have all the Ceylon assetsdistributed for their benefit as. well as part of the Indian assets.
For the reasons given I am of opinion .that the appeal must bedismissed with costs.
Daxtok J.
CheUy v,Wilson
Lvaul Gbant J.—
The insolvents in this case traded both in India and Ceylon.
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LyaxxGrant .T.
ArunasalcmGhetty v.Wilson
On June 22, 1925, they were adjudicated bankrupt in Madras,and on August 3 the High Court of Madras in its decree requestedthe District Court of Colombo to act in aid.
The first respondent is the assignee appointed by the High Courtof Madras.
On August 25, 1925, the District Court of Colombo adjudicatedthe firm insolvent and the second respondent was appointedprovisional assignee under the Insolvency Ordinance.
On November 10, 1925, the District Court of Colombo declaredthat it was acting in aid of the Madras High Court and that for thepurposes of administering the estate in Ceylon the second respondentshould be appointed attorney of the first respondent. In compliancewith this order a power of attorney was filed on December 10, 1925.The present petitioners are proved creditors in Ceylon. Theyaverred that through their solicitors in Madras they had variouscommunications with the first respondent. They complained thatthey were unable to obtain any proper report from the respondentsof the administration of the estate either in India or Ceylon or anyinformation as to what had happened to the income of the estateand the capital amount of the realized assets in India.
They petitioned the District Court of Colombo that ..the respond-ents be directed to file an account and balance sheet of all moneysand property in Ceylon, &c., with a report as to the progress madein the realization of the Ceylon assets.
They further asked for an order directing that no moneys realizedin Ceylon be paid to the first respondent outside Ceylon withoutnotice to them and that the Court should call on .the first respondentthrough the High Court of Madras to submit an account of assetsand that the High Court of Madras be requested to order the firstrespondent to comply with the above requirements and .to declarea dividend.
The learned District Judge directed the second respondent to filean account of the moneys in his hands realized in Ceylon by him,not to pay that money to the assignee in India or to spend moneyson the directions of the first respondent without order of Court.
The District Judge also intimated to- the second respondent thatany application to pay or speiad the money must be considered aftera statement had been filed showing what had been done with themoney realized in India.
From this order an appeal is taken by the assignees. Theappellants maintain—
That the first appellant is responsible only to the High Courtof Madras and the second appellant as his attorney isbound to carry out his directions, and that as the District
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Court of Colombo is only acting in aid of the MadrasHigh Court, it is not open to the creditors to make anyapplication to this Court concerning the action of theappellants.
That the order places the second appellant in an embarrassing
position as he is unable to decide whether he is .to carryout the directions of the first appellant*.
That the Court should have referred the matter to the High
Court of Madras.
These are the principal grounds of objections to'the order.
Section 122 of the Bankruptcy Act of 1914 provides that Courtsin different parts of the Empire shall act ns auxiliary to or in aid ofeach other.
The principles of International Law as laid down by Dicey arethat an adjudication in one country affects movables wheresoeversituated, but not immovable property in another country.
It seems clear that when the second respondent was appointedprovisional assignee the movable property in Ceylon (assuming thatthe insolvents are domiciled in Madras, which is not clearlyestablished) was already vested in the assignee appointed by theMadras High Court.
The adjudication of insolvency in Ceylon' was not apparentlymade independently but was' only made as auxiliary to the Courtin Madras. Neither of these circumstances however affects theexclusive jurisdiction of the Ceylon Courts in Ceylon. Questionsmay arise as to the principles of law by which the Court is to beguided in the exercise of its powt :s as they affect movables andimmovables respectively, but these questions do not arise at present.
Even in his capacity as attorney to the ffirst respondent, thesecond respondent is subject to the jurisdiction of the Ceylon Courts■and by appointing him the second respohdent has submitted himselfto that jurisdiction.
.. It seems to me that, the powers of the second respondent to dealwith the Ceylon assets and equally .the powers of the first respondentare subject to any order that may be made by the Ceylon Court.I do not think i.t can be said that the Colombo Court has divesteditself of jurisdiction in favour of the Madras Court, nor do I thinkit is competent for it to do so.
So far as the Ceylon assets are concerned, they remain subjectto tiie orders of the Ceylon Courts.
.No doubt that Court will exercise its jurisdiction in aid of theMadras Court, but it seems to me that if the situation so demands,jtr can as a condition of such exercise, require the Madras assigneethrough his attorney to file a statement of accounts.
0 R ANT J.
ArunaaalemCheUy v.Wilson
Grant «T.
ArunasalemGheUy v.Wilson
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The District Judge has not actually made such an order, but hehas intimated that until some statement is filed he will retain controlof the Ceylon assets.
I think that he is quite entitled to take up this attitude in orderto protect the assets under his jurisdiction.
I would dismiss the appeal with costs.
Appeal dismissed.