( 205 )
Present: Lyall Grant J. and Maartensz A.J.
EBBAHIM v. RAMAN CHETTY.
163—D, C., Colombo, 3,755.
Insolvency—Appeal by insolvent—Cross objections—Civil ProcedureCode, s. 775.
Where an insolvent appealed from an order suspending hiscertificate, the Court may consider objections filed by a creditor-respondent to the appeal, following the procedure laid down in
section 772 of the Civil Procedure Code.
^^PPEAL from an order of the District Judge of Colombo.
Croos Da Brera, for appellants.
Weerasooria, for respondents.
November 11, 1929. Lyall Grant J.—
This is an appeal by two insolvent traders against an ordersuspending their certificates of conformity for a period of one year.
The principal reason for the suspension appears from the judgmentappealed against to be the fact that the insolvents failed to producethe business books which were required to make their financial positionclear, and that owing to this failure the whole situation is obscure.
The learned District Judge also refers to certain transactionsin India which he considers suspicious though he cannot definitelybrand them as fraudulent.
He also says that there is a suspicion that one creditor wasunduly favoured.
I agree with the learned District Judge that owing to the absenceof the insolvents' business books it is not possible fully tounderstand their position and that they have given no satisfactoryexplanation of their failure to produce the books.
I think the suspension of the certificates for a year is fully justified.
The creditor-respondent to the appeal filed a notice of objectionster the grant of the certificate in the form laid down by section 772of the Civil Procedure Code.
The objections taken were—.
(1} That on the findings of the District Judge the insolventshave failed to conform to the provisions of the Insolvency(. Ordinance.
That on the said finding the conduct of the insolvent tradersin relation to the estate before as well as after theirinsolvency does not entitle the insolvents to a certificateof conformity.
( 206 )
That on the evidence in the case—(a) The insolvents havewith intent to diminish the sum to be divided amongthe creditors parted with property; (6) the insolventshave withheld the production of their' books of accountrelating to their rubber transactions; (c) the insolventshave continued trading, though they were fully awareof their insolvent position; (d) the insolvents fraudulentlyremoved their stock in trade after obtaining by falsepretences the release of the seizure effected, by N. R. M. N.Ramanathan Chetty; (e) the conduct of the insolventshas been fraudulent.
A preliminary objection was taken to the hearing of theseobjections by the insolvents’ Counsel. He argued that section 772of the Civil Procedure Code did not apply to insolvent proceedings.In support of this contention he referred to two Full Bench decisionsof this Court.
In the matter of the insolvency of M. L. Marikar Abdul Azis 1a decision of this Court was overruled and the principle laid downthat the Civil Procedure Code did not take the place of theSupreme Court rules made under section 6 of the InsolvencyOrdinance.
This case was referred to and followed in .the Full Bench case ofIn re Ooonewardene.2
In both these cases the point at issue was whether security wasrequired in insolvency appeals, but the principle laid down in theformer case would govern the question now before us.
As against these cases we were referred to Salgado v. Perns,3another Full Bench case where it was pointed out that theregulations affecting appeals existing at the time of the InsolvencyOrdinance of 1853 were expressly repealed by the Civil ProcedureCode and the opinion was expressed that by inference the CivilProcedure Code was made applicable to insolvency cases and thatthe Code" governs appeals from the Courts in insolvency cases.
This case is not referred to in the judgment in In re Ooone-wardene (,supra), a judgment delivered by one Judge only andagreed to by the other Judges.
On the whole, however, whatever one’s own view on the mattermay be, I think we must consider ourselves bound by the latestFull Court decision.
The position therefore is that there is no procedure laid downto govern insolvency appeals. In these circumstances it seemslo me that the Court must consider the objection according to
1 2 N. L. R. 196.1 24 N. L. R. 432.
* 12 N. L. R. 379.
( 207 )
general principles. The only local model which we have to guideus is the rule governing appeals contained in the Civil ProcedureCode.
It was argued for the insolvents that, in the absence of rulescontaining provisions similar to those of section 772 of the CivilProcedure Code, as there is here no appeal by the creditor-respondent,only the points raised by the insolvent in appeal can be consideredand not those raised by the creditoMespondent.
It was suggested that if the creditor-respondent wished to raiseother points he could only do so by way of cross appeal.
I confess I do not 6ee the necessity for this procedure.
There is nothing to be gained by a cross appeal which wouldonly complicate procedure.
The only interest of the insolvent-appellant is that he shouldhave due notice of the questions to be reused against him on appeal.
He has had such notice and the matter is as fully before theCourt as if a cross appeal had been taken.
. If the Court has power to make a rule under section 6 containingprovisions similar to those contained in section 772 of the CivilProcedure Code, it cannot be contended that section 6 confinesthe Court's attention to matters actually raised in the petitionof appeal itself.
The question, though of considerable importance in other cases,need not detain us here as we have come to the conclusion thatthe District Judge's decision is a reasonable one with which we arenot prepared to interfere, although on the facts he might perhapsnot inequitably have refused a certificate.
The appeal is dismissed and the objections taken by the creditor-respondent are overruled. The respondent will have his costsof the appeal.
Maartensz A.J.—I agree.
EBRAHIM v. RAMAN CHETTY