109-NLR-NLR-V-61-NIKATENNE-Appellant-and-PERUMAL-CHETTY-et-al-Respondent.pdf
N^hatenne v. Perumal Chetty
437
Present: Weerasocriya, J., and H. M. 6. Fernando,
UnKATEZTXE, Appellant, c&Tid PERUMAL CHETTY et al., RespondentsS. G. 613—T>. G. Kandy 200’Insolvency
Insolvency Ordinance {Gap* 82)—Withdrawal of protection granted to insolvent—
Legality—Sections 36, 89, 151.
The insolvent-appellant had been ordered to deposit in Court a sum of Rs. 250monthly out of bis salary. He complied with the order for about six months,but defaulted thereafter. Subsequently an application was made by one ofthe proved creditors that the protection granted to tbe appellant be withdrawnas he had failed to deposit the Bs. 250 as ordered. The Court, without givingthe appellant an opportunity of showing cause against the application, there-upon withdrew bis protection holding that he had committed an offence undersection 151(5) of the Insolvency Ordinance in that he concealed or made awaywith the money which should have been deposited.
Held, that the order withdrawing protection was bad for the followingreasons:—(i) Section 151(5) of the Insolvency Ordinance was inapplicable in.the present case, (ii) Under section 151, read with section 89, the power towithdraw protection cannot be exercised until the second public sitting for theexamination of the insolvent is held, (iii) Under section 36 the appellant wasentitled to protection during the time allowed, for his examination.
■if^-PPEAli from an order of the District Court, Kandy.
E* B. Vannitamby, for insolvent-appellant.
No appearance for respondents.
J. Zf. B. 22303—(3/60)
G'tir. adv. vuU,
438
WEEBASOORTYA, J.—Nihatenne v. Peruana! Chetty
October 22, 1959. Wbebasoobiya, J.—
'Hus is an appeal by an insolvent from an order withdrawing protection■granted to him.
The appellant was in October, 1956, ordered to deposit dn Court a sumof Its. 250 monthly out of his salary. He appears to have complied withthis order up to April, 1957, but defaulted thereafter. On the 5thNovember, 1957, when the case was called in some other connection, anapplication was made on behalf of one of the proved creditors that theprotection granted to the appellant he withdrawn as he had failed todeposit the Us. 250 as ordered. The Additional District Judge, withoutgiving the appellant an opportunity of showing cause against the applica-tion, thereupon withdrew his protection holding that he had committedan offence under section 151(5) of the Insolvency Ordinance (Cap. 82) inthat he concealed or made away with the money which should have beendeposited.
I do not think that the failure of the appellant to deposit the moneyamounts to a concealment or making away of his property within themeaning of section 151(5). Moreover, an offence under section 151(5)requires that there should have been an intent on the part of the insolventto diminish the sum to be divided among bis creditors or to give anundue preference to any of them. There is no proof of such intent in thepresent case.
There is another ground for setting aside the order withdrawingprotection. Section 151 of the Insolvency Ordinance makes it clearthat the power to withdraw protection cannot be exercised except at thesitting appointed for the last examination of the insolvent. That stageis not reached until the second public sitting is held—vide section 89.In the present case the second public sitting, originally fixed for the 5thJune, 1956, has not yet been held.
Moreover, section 36 of the Insolvency Ordinance provides as follows :
If the insolvent be not in prison or custody at the date of the adjudica-tion, he shall be free from arrest or imprisonment by any creditor incoming to surrender, and after such surrender during the time by this-Ordinance limited for such surrender, and for such farther time as shall
foe allowed him for finishing his examination” The appellant not
(having finished his examination, he is entitled to protection during thetime allowed for it-. See in this connection the ease of Fernando v.Miller <£> Go. et al.1.
The order withdrawing protection is set aside and the record is remittedto the Court below with a direction to grant the appellant protection interms of section 36 of the Insolvency Ordinance. The appellant’s costsof appeal will be paid by the creditor-respondent at whose instance theorder withdrawing protection was made.
H. N. G. .Fernando, J.—I agree.
1 {1939) 41 N. L. -S. 3S3.
Order set aside.