Report No. 26
General.-This deals with the appointment of interim receivers, and follows section 20 of the Provincial Act which corresponds to section 16, Presidency Act.
1. Modification in Provincial Act.-The Provincial Act provides for the appointment of a receiver generally, but the clause provides for the appointment of an Official Receiver as a receiver. Under the Provincial Act, the properties of the insolvent would, on adjudication, vest in the court or in the Official Receiver. That Act does not provide that there should be an Official Receiver in each and every area, and that the properties of the insolvent should vest in him and no other person. Since it has been provided1 that there should be an Official Assignee for every area and that on adjudication the property should vest in him, there is no reason why the Official Assignee himself should not be appointed interim receiver pending adjudication.
Before adjudication, the status of the Official Assignee will be that of a receiver under Order 40, rule 1, Civil Procedure Code, and the properties of the debtor would not vest in him, and his position is only that of a manager of those properties. It is only when there is an order of adjudication that they will vest in him. It seems desirable that the person who is to act as interim receiver should be the person in whom the properties should vest if the petition results in an order of adjudication. It has, accordingly, been provided that the Official Assignee must be the interim receiver.
2. The Presidency Act, section 16, says that an order under this section may be made "if it is shown to be necessary for the protection of the estate". This express limitation is not found in the Provincial Act, but has been retained.
3. The Presidency Act gives such powers to the interim Receiver "as may be prescribed". The Provincial Act gives such powers "as the court may direct". The language of the Provincial Act is better, since it gives a discretion to the court to deal with each individual case according to its requirements, and has been preferred.
4. The Provincial Act uses the words "when making an order admitting the petition". There is also a power to make the appointment subsequently before adjudication. This is slightly narrow, inasmuch as, before the admission of the petition the appointment cannot be made. The Presidency Act empowers the court to make an order "at any time after the presentation of the insolvency petition and before an order of adjudication is made". It is considered that the provision in the Presidency Act should be preferred, but the words "after the presentation of the insolvency petition" are thought to be unnecessary and have been omitted.
5. The words "immediate possession thereof or of any part thereof" have been replaced by "immediate possession of the same". The words "the same", it is considered, should suffice for all situations covered by the existing wording.
1. See clause 88.