Abdul Kareem Sahib (Insolvent Debtor) v. The Official Assignee Of Madras (Petitioner) .

This is an appeal from an order made by the Honourable Mr. Justice Moore as a Commissioner in Insolvency on an application by the Official Assignee in the insolvency of one Abdul Kareem Sabib. The insolvent filed his petition on August 29th, 1876, and obtained his personal discharge in November of that year. His debts amounted to Rs. 782 and there were no assets.

At the date of the order for the insolvent's personal discharge, he was ordered to pay an allocation at Rs. 3-8-0 per mensem out of his pension of Rs. 7-0-0 and he made payments under this order amounting to Rs. 94-8-0 in all. By an order of Court of the 27th October 1879, a first dividend at the rate of Rs. 9-0-0 per centum was declared, under which the sum of Rs. 65-14-0 was ordered to be distributed among the creditors.

Subsequent to this order of Court the insolvent did not make any further payments under the allocation order.

At the date of his insolvency the insolvent had three creditors,—his wife, whom he had divorced who was a creditor for Rs. 653 odd on a judgment obtained by her against him in 1874; one creditor for Rs. 56, and a third creditor for Rs. 23. The insolvent alleges that these two last-named creditors have been paid off, but there does not appear to be any evidence of this.

On April 21st, 1903, the Official Assignee received information from the brother of the wife of the insolvent that the insolvent had inherited a house alleged to be worth Rs. 5,000. The insolvent states in his affidavit that he inherited this house from his father in 1880, that he had no interest in the property at the time of filing his petition or at the time of applying for his personal discharge and that his wife was aware of the fact that he inherited the house at the time, i.e, in 1880. He also alleges that the house is subject to a mortgage for Rs. 1,680. In paragraphs 5 and 6 of his affidavit he alleges that he has a son by his first wife named Shaik Abdulla who is now about forty years old. This son lived with him in the said house until May 1903, but owing to misunderstandings between them by reason of the son's extravagant habits, they separated from each other, and the son commenced to live separately in the same house and set up his mother to take proceedings through the Official Assignee, with the sole object of annoying and putting his father to unnecessary expense and trouble. The father has been in possession and enjoyment of the house ever since he inherited it. The house is now under mortgage to Mohal Laul and another. This mortgage was effected by the insolvent, his son Shaik Abdulla, and another son and there is now due about Rs. 680 under this mortgage. These allegations are not contradicted.

On December 5th, 1903, the Official Assignee applied to the Commissioner in Insolvency for an order under section 86 of the Insolvency Act asking that judgment should be entered up against the insolvent for the balance of his scheduled debts, viz., Rs. 666 odd. The Court made the order and the insolvent appeals.

One of the grounds upon which the Court made the order was that at the time of filing his petition the insolvent had an interest in the house belonging to his father and was bound to enter it in his schedule. This does not appear to be so. The insolvent was a Muhammadan and there is nothing to show he had any interest in the house during his father's lifetime. The Court was also of opinion that section 18 of the Limitation Act applied. There appears to be no provision in the Act of 1848 which imposes upon an insolvent who has obtained his personal discharge the duty of disclosing to the Official Assignee that he has become possessed of property since the making of the order of personal to charge. Consequently the non-disclosure of the fact that he became possessed of the house cannot be regarded as a fraud either on the creditors or on the Official Assignee.

On behalf of the insolvent, our attention has been called to a case reported in Kristocomul Mitter v. Suresh Chunder Deb(1) where it was held that the possession of property by an insolvent, which has been acquired by him before he has obtained his final discharge, may be adverse to the Official Assignee so as to bar his title by lapse of time.

It is not necessary for us to consider whether we should be prepared to follow this decision in so far as it proceeds upon the ground of adverse possession because on the facts in the present case we think that the order ought not to have been made. The section provides that the Court may make the order if in the circumstances of the case it thinks fit. Under the English Acts of 1883 and 1890 the entry of judgment against a bankrupt in respect of assets provable in the Bankruptcy will not, as a rule, be made a condition of his discharge unless the bankrupt has an income more than sufficient to keep his family in the enjoyment of the ordinary necessaries of life according to his station, Re Shakleton. The rule of practice established under the English Acts was followed by the Bombay High Court in the case of an application under section 86 of the Act in force in this country. See in the matter of Hormarji Ardeshir Hormarji(2).

The insolvent alleges and it is not contradicted that he is mainly dependent on the income of the house for his means of subsistance.

However, in the case now before us the only creditor who would benefit by the making of the order is the former wife. She was aware of the fact that the insolvent had become possessed of the house in 1880. She took no steps for twenty-three years to give information of this fact to the Official Assignee and when she did give information it was only because she was instigated to do so by her son who had quarrelled with his father.

We must allow the appeal and set aside the order. We make no order as to costs.

Attorney for appellant Messrs Ranganadha Naidu & Tirumalai Pillai.