040-NLR-NLR-V-03-In-the-Matter-of-the-Insolvency-of-AWENNA-KEENA-MUNA-MOHAMMADU-IBRAHIM-NEYNA.pdf
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1897.
October 13.
In the Matter of the Insolvency of Awenna Keena MttnaMohammadu Ibrahim Neyna.
0. L. Abubakker, of Colombo, a proved Creditor, Appellant.
D. C. (Insolvency Action) Kurunegala, 64.
Insolvency—Ordinance No. 7 of 1853, s. 66—Rejection of petitioning-creditor as assignee—Discretion of District Judge—Voting byproved creditors—Necessity of letters of attorney and proof thereofby affidavit or oath to enable a proctor to vote in absence of provedcreditor.
The power to reject an assignee is a discretion vested in theDistrict Court, with which the Supreme Court will not interfere,save in exceptional circumstances.
Reasons should be given why the person rejected is consideredpersonally unfit for the office.
. Under section 66 of the Insolvency Ordinance, the provedcreditors must vote either in person or by persons authorized byletters of attorney, which must be proved either by affidavitor by oath before the Court viva voce.
TN this matter the petitioning-creditor was nominated as assigneeby the majority of creditors in number and value. Some ofthe other creditors impeached the bond fides of the petitioning-creditor, who, they alleged, were acting in collusion with his nominotsand the insolvent. The Acting District Judge (Mr. C. M. Fernando)ruled that a party who was not a creditor should be appointedassignee, and rejected the nominee under the discretionary powervested in him by section 66 of Ordinance No. 7 of 1853.
One of the aggrieved proved creditors appealed against thisfinding.
W. Pereira, for appellant.
13th October, 1897. Lawrie, A.C.J.—
I would not disturb the order rejecting the petitioning-creditoras assignee. The power to reject is a discretion vested in theDistrict Court, which (it seems to me) should not be interferedwith, except in very, exceptional circumstances. The DistrictCourt had already, on the 10th August, rejected an assigneesupported by Mr. Markus and his clients, and it was but carryingout the same policy to reject another partisan who was supportedby Mr. Daniels and his clients. At both the meetings for theelection of assignee the election was not regularly conducted.The 66th clause of the Ordinance is quite explicit. At theelection the proved creditors must vote either in person or by personsauthorized by letters of attorney, which must be proved either by
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affidavit or by oath before the Court viva voce. Here, it was takejifor granted that Mr. Modder (who had no proxy nor letters ofattorney of any kind, but who appeared for another proctor) hadauthority to vote by proxy for each and all of Mr. Daniel’B clients.Even Mr. Daniels held no letters of attorney proved by affidavitor by oath in Court; and certainly Mr. Modder had nope. Theelection seems to me to be irregular. I would sustain the rejec-tion of the person nominated by Mr. Modder for Mr. Daniels andI would remit for a new choice and appointment to be made inconformity with the Ordinance.
1897.
October 13.
Lawbib,
A.C.J.
Bbowne. A.J.—
I agree. In recording the voting for choice of an assignee therecord should show in detail the names of the creditors who votefor each person proposed and the values of each creditor’s claim.The procedure in this case has been quite irregular, as my Lordpointed out, and the election should proceed de novo. I do rotknow of any instance as yet, in Ceylon, where a Judge has exer-cised the powers given to him by section 66 of the InsolvencyOrdinance, and it would be well that when they are exercisedreasons should be given why the person rejected is consideredpersonally unfit for the office. A claim proved by the creditors’oath must be deemed honest and true till it shall be expunged byformal procedure.