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Present : Mr. Justice Wendt and Mr. Justice Grenier.
In the Matter of the Insolvency of Hadjiar Abdul Gaffoob.
D. C., Kandy, 1,562.
Insolvency—Personin jail under civilwrit—Bighttodischarge—
Discretion of Judge—Grounds of exercise of discretion.
A debtor who is m jail under a civil writ is not entitled, as ofright, to be discharged upon his adjudication as Insolvent. It is inthe discretion of the Court to release him or not.
PPEAL from an order of the District Judge refusing to releasethe appellant upon his adjudication as insolvent.
Bawa, for the insolvent, appellant.
Cur. adv. vult.
November 3, 1908. Wendt J.—
The appellant, who had lain twenty-one days in prison uponexecution against his person and was yet in. custody, petitioned thathe should be adjudicated insolvent. His proctor, in presentinghis petition, moved that petitioner should be adjudicated, that theFiscal be ordered to produce his body in order to his surrenderand that the petitioner be given the protection of the Court. Theprinted forms containing these motions end with the printed words“ Allowed and ordered accordingly, ” with the addition in manu-script:It is further ordered that the insolvent be released from
custody on furnishing certified security for Rs. 10,000. ” This isfollowed by the Judge’s signature, and then follows a printedmotion for the insolvent’s release, with the printed order:“ There
being no objection, it is ordered that the insolvent be forthwithreleased from custody. ” The detaining creditor was not givennotice, and so was not in a position to object. The two orders arecontradictory, and the later one is unconditional. This is anotherinstance of the careless use of printed forms. The lower half' wasintended to be filled up after the insolvent had been produced andhad surrendered. The District Judge anticipated his productionand his application for release from custody. The insolvent, whohas not yet surrendered, appeals to this Court, and wishes to bereleased forthwith; hut this irregularity is due to the anticipatoryorder made by the Distict Court. It not appearing what thesecurity demanded was intended to ensure, we inquired of theDistrict Judge, who replies that he made the order under section 36of the Insolvency Ordinance, No. 7 of 1853; that the amount ofRs,. 10,000 was fixed because that was the amount of the judgmentunder which the appellant was in custody; and that “ the securitywas intended to ensure the insolvent’s surrender in Court up to the
12J. N. 9*909(8/50)
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1908. appointment of an assignee of his estate. ” So far as the “ surrender ”November 3. properly so called was concerned, that is to say, the appearance in'Wmror J. Court of .the insolvent and his consent to the adjudication, securitywas unnecessary, because he was in the Fiscal's lawful custody, andhis appearance in Court would be ensured by the Court’s orderfor his production. It is after such protection and surrender andafter the Court has granted protection from arrest (meaning a fresharrest on some other writ) that the application for discharge maybe made, when the Court is empowered (not required) to order bisimmediate release, either absolutely or upon such conditions as it6hall think fit. Certain cases are specified in which the release isforbidden. It is nowhere enacted that a debtor in custody is uponadjudication entitled to his discharge, as, of course, the Court hasa discretion. The detaining creditor being interested should havenotice of any application for discharge, and is entitled to be heard(Ex parte Preston1). Then, how is the Court’s discretion to beexercised? Obviously, it must have regard to the puipose for whichthe law allows the discharge of a debtor, lawfully detained, againstthe wishes of the detaining creditor. In re Robinson,2 Mr. Commis-sioner Hobroyd said:“ The object of the Statute in giving the
Court power to discharge a bankrupt from custody is to enable himto assist his assignees in discovering and getting in the estate. TheCourt is, therefore, not in a position to decide as to the dischargetill after the choice, unless all parties consent. Let the applicationstand over till assignees have been chosen.” These words werequoted with approval by Clarence J. in Re the Insolvency of SarayeLebbe.'3 In Ex parte Stuart v. Waugh* Lord Westbury L.C. expressedhimself as follows on section 112 of the Bankruptcy Act of 1849,which is re-enacted in our section 36: “I have here an order made bya Commissioner in exercise of a very great and singular discretionarypower, given to the Court of Bankruptcy by the Statute of 1849.The Commissioner is authorized to exercise that power only for thebenefit of the creditors under the bankruptcy. If he is perfectlysatisfied that it will conduce to the benefit of the creditors under thebankmptcy, he is to exercise that power.” Assignees had then beenappointed, and they supported the order of release, but the LordChancellor said:" It may be considered a probable thing that a man
out of prison would find himself more frequently at the office of theassignees than the assignees would attend upon him at( the prison.But that greater convenience is not, in my mind, a sufficient groundfor the exercise of this power, keeping in view the right of thedetaining creditor. The power is a discretionary judicial powerand is not to be exercised, unless some great benefit is to resultfrom its exercise, and unless the detaining creditor has the power ofavailing himself of the bankruptcy for the purpose of permitting the
[1861) 5 L. T. N. S. 89.* (1891) 1 S. C. R. 53.
(1851) Fonblanque's Bank Cases, 205.* (1863) 9 L. T. N. 8. 466.
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bankrupt to be .discharged from prison." In ex parte Moss,1 theCourt, acting upon Lord Westbury’s dicta, refused to discharge thedebtor (who had applied before the choice of assignees), but allowedhis release upon giving bail for his due appearance at the sittings ofthe Court. The amount of bail fixed was apparently the amount ofthe detaining creditor’s debt and costs, but, of course, the Courtmust in each case fix such sum as; while it Is not prohibitive, willhave the effect desired.
I am not prepared to over-rule the District Judge’s refusal in hisdiscretion to exercise his power in appellant’s favour, and the appealwill therefore be dismissed. The District Judge will, however,order appellant to be brought up to surrender, and thereafter willre-commit him to custody. If the appellant desires later to renewhis application for discharge, he must give notice to the detainingcreditor.
Grenier A.J.—I agree.
November 3Wendt J.
In the Matter of the Insolvency of HADJIAR ABDUL GAFFOOR