Report No. 26
This is new. At present, section 31 of the Provincial Act vests in the court a power to grant protection only after the debtor is adjudged insolvent. Under section 23 of that Act the court can release the debtor, but only if the debtor is actually under arrest or imprisonment. There is no provision in the Act for granting protection to the debtor before he is adjudged insolvent, if in fact he is not under arrest. There are decisions in which the courts, acting in exercise of their inherent jurisdiction, have granted interim protection even before adjudication when the debtor was not under arrest.
Vide Abdul Razah v. Barisuddin Ahmed, 14 CWN 586, and Nallagalti Goundan v. Ramana Goundan, AIR 1925 Mad 170. The correctness of these decisions has been doubted1, but it is considered that there should be power in the courts to grant protection in cases which do not fall within section 23 of the Provincial Act, and this clause provides for that.
While an earlier clause2 which corresponds to section 23 of the Provincial Act confers a power on the court to grant protection when the debtor is under arrest even before adjudication, the clause under discussion authorises the court to pass such order even when he is not actually under arrest.
It will be noticed that the scope of this clause is different from that of section 31 of the Provincial Act, which has been reproduced in a subsequent clause"3.
1. See Mulla, (1958), p. 229.
2. Clause 11.
3. Clause 24.