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Present : Fisher C.J. and Drieberg J.
DEEN v. ALAGAPPA CHETTY.
104—D. C. Jolombo, 3,798.
Insolvency—Opposition to certificate—Failure to give notice—Adjourn-ment of meeting—Ordinance No. 7 of 1853, s. 124. *
In insolvency proceedings a District Court has power to adjourna sitting held for the purpose of granting a certificate, in orderto enable a creditor to be heard, who desired to oppose the certi-ficate but had failed to give the statutory notice.
^^PPEAL from an order of the District Judge of Colombo.
The appellant having been adjudged insolvent, a certificatemeeting was fixed, when the respondent appeared on the appoint-ed day to oppose the granting of the certificate. The appellantobjected to the respondent being heard on the ground that the latterhad failed to conform to the requirement of the Ordinance with regardto the notice of opposition. The learned District Judge adjournedthe certificate meeting to allow the opposing creditor or any othercreditor to give notice of opposition.
i 31 N. L. B. 1.
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Weerasooria, for insolvent, appellant.—Section 124 of theInsolvency Ordinance (No. 7 of 1853) requires that a creditor whodesires to oppose the certificate must give three clear days’ noticeto the Secretary of the Court. Notice handed over to a clerkis not due notice, and even the clerk says he saw the notice amonghis papers for the first time only on the day of the certificate meeting.The District Judge has not held whether the notice was given onthe day it is alleged to have been given or not. He has no power toadjourn the certificate meeting to cure the non-compliance of theprovisions of the section. The adjourned date must be taken,to refer back to the original date fixed for such meeting. Counselcited Silva v. Siddatnbaram Chetty
Rajapakse, for opposingcreditor-respondent.—TheDistrict
Judge has power under section 124, ex mero motu, to ask for assis-tance from a creditor with regard to the consideration of objectionsto the grant of a- certificate, whether such creditor has given noticeor not. Here the Judge stopped the evidence and adjournedthe meeting. In interpreting section 124 grounds of public policymust be remembered, and the insolvent's conformity to the pro-visions of the Ordinance. An opposing creditor to some extentrepresents the public. The notice has to be given to the Secretary,not do the insolvent. The Judge has discretion to adjourn thesitting for the purpose of giving even a creditor, who has not givendue notice, an opportunity of giving the required notice. (Ex parteWoods 2; Archbold (1856 ed.), pp. 402-403.) The passage in 4C. W. R. 217 is obiter dictum.
August 22, 1929. Fisher C.J.—'
This appeal arises under the following circumstances: Theappellant having been adjudged insolvent, the certificate meetingunder section 124 of the Insolvency Ordinance, No. 7 of 1853, wasappointed to be held on March 26, 1929. The respondent, whowished to oppose the granting of the certificate, took certain stepsto comply with the provision of the section which requires anopposing creditor to give ” to the Secretary of the Court threeclear days' notice in writing of his intention to oppose,” and appearedon the appointed day to oppose the granting of the certificate.The appellant objected to his being heard on the ground that therequirement of the section with regard to notice had not beencomplied with. The learned Judge, without specifically decidingthe question whether due notice had been given or not, and afterhaving heard some evidence, made order as follows: *' In viewof the facts I think that the fairest order I can make is to adjournthe certificate meeting for June 11. The opposing creditor who hasgiven notice, or any other creditor, will be allowed to give notice
14C.W. R. 217.
* 20 L. J. Chanc. 919.
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of opposition in the usual way. I do not think it fair to the Courtthat I should not have the assistance of Counsel for the opposingcreditor, and the only grievance that the insolvent can have isthat he has not had due notice. The adjournment which I haveordered will enable fresh notice to be given to the Secretary asrequired by the section/’
For the purpose of deciding this appeal we must proceed on thefooting that the learned Judge was not satisfied that the noticegiven was a good notice within the meaning of the section. Itwas contended for the appellant that once a creditor had failedto give notice in accordance with the section it was not opento the Court to hear any objection by him to the granting of thecertificate, and an opinion expressed by this Court in the case ofSilva v. Siddambaram Chetty 1 seems to support that view. Theheadnote of the report is as follows:—“ Notice of objections notgiven in time—Court has no power to adjourn meeting to enableobjecting creditors to give sufficient notice.”The headnote,
however, does not set out what was actually decided by the Court.The facts in that case were that at the certificate meeting theDistrict Judge upheld a contention that three clear days' noticehad not been given in conformity with section 124 and adjournedthe meeting for another date to give the objecting creditors theopportunity of filing, a fresh notice. Two points were raisedon the appeal, namely, whether three clear days* notice had beengiven or not and whether the Judge was right in adjourning themeeting. Wood Renton C.J. expressed himself as unable to agreewith the learned Judge on either of the points. He says in hisjudgment : ” It is clear, and this was indeed conceded by theinsolvent's Counsel, that the Court has an inherent power to adjournproceedings in insolvency cases. But I do not think that thatpower can be exercised in favour of creditors who have failed togive the prescribed statutory notice of their objections. On theother hand I am of opinion that the notice here in question wasgood.” De Sampayo J. was of opinion that the provision as togiving three clear days' notice clearly contemplated “ the publicsitting first appointed for the consideration of the allowance ofthe certificate and not any adjournment thereof,” but he heldthat the notice of opposition given was quite sufficient. Thequestion of the power to adjourn a meeting was not therefore,under the circumstances, before the Court for decision. I think,however, we may take the opinions expressed by the learned Judgesin that case as authority for the proposition that an objectingcreditor who does not comply with the provision as to givingnotice is not entitled a$ of right to be heard.
> 4 C. W. ff. 21 .
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But in this case there is another feature ,for consideration. It i6clear that the learned Judge desires to have the assistance ofCounsel for the opposing creditor in discharging the difficult andresponsible duty cast upon him by the section, and it seems to meclear on a consideration of the section that he is entitled to havesuch assistance. It would certainly be difficult to say that acreditor, to whose notice something materially affecting the probityand honesty of the insolvent is brought for the first time withinthree days of. the holding of the meeting, cannot bring it to thenotice of the Court and put forward such evidence as he may haveon the point if the Court should desire to hear it". This is not thecase here, but it seems to me material by way of illustration inconsidering the question of the scope and extent of the powerof the Judge under section 124. The section provides that theCourt, “ whether the allowance of such certificate be opposedby any creditor or not, shall judge of any objection against allowing
such certificate” Those words give the Court a wide
discretion as to hearing objections, and an English decision onthe construction of section 198 of 12 & 13 Yict. c. 106, whichcontains those words and is in very similar terms to section 124of our Ordinance, which was cited by Mr. Bajapakse (Ex parteWoods 1), is authority for the proposition that the Judge is notlimited to hearing only such objecting creditors as may have givendue notice should he think fit to allow others to come forward toassist him in his inquiry. That case came before the Lord Chan-cellor—on special case—by way of appeal from a decision of Vice-Chancellor Knight Bruce, and it was held that the Commissioner inBankruptcy had discretion to adjourn generally the sitting held forthe purpose of granting a certificate at the instance of creditors whodesired to oppose the granting of the certificate but who had omittedto give the three days’ notice required by the section. The LordChancellor (Lord Truro) in giving judgment said: “ My duty is togive such a construction to this 198th section as, looking to thewhole act, will best carry into effect the intention of the legislature.It appears to me that the objections urged against the proceedingsof the Commissioner cannot be sustained. There was a- great publicobject contemplated by this part of the statute, as is obvious fromthe form of the certificate given in the schedule; this form differsfrom the old certificate, which was to the effect simply, that thebankrupt had only conformed to law from the date of the bank-ruptcy, and previous conduct was not held a sufficient ground forimpeaching his claim to the certificate; but, under the presentact, a much more extensive duty falls to be performed by theCommissioner, for in granting the certificate he is further requiredto govern his judgment by the conduct of the bankrupt, as a trader,
(1S51) 20 L. J. Chanc. 619.
( m )1929.
both before and after the bankruptcy; having a due regard to thecircumstances under which he has become bankrupt, in order todetermine to which class of certificate he may be entitled. Thisgeneral object of public interest must not be lost sight of in con-struing the statute/* and concluded his judgment by expressingthe opinion that the Commissioner had “ exercised a sound dis-cretion, and that the Vice-Chancellor was right in declining tointerfere."
The form of the certificate under our Ordinance contains similarprovisions to those commented on by the Lord Chancellor, andhis judgment is therefore directly in point in this case.
In*my opinion, therefore, the District Judge had power toadjourn the meeting as he has done. It does not appear from therecord before us whether he gave instructions that a fresh noticeshould be given in the Gazette, but in the case to which I havereferred the Commissioner in Bankruptcy directed that a freshnotice should be given and the judgment of the Lord Chancellorendorses his action. In my opinion it would be well to follow thesame course in this case, and we therefore direct that twenty-onedays* notice of the meeting be given in the Gazette as providedin section 124. The appeal is dismissed with costs.
Drieberg J.—I agree.