Report No. 26
Clause 23
Relation back to what date.-This follows section 28(7), P.A. and section 51, P.T.A.
The question as to when an order of adjudication should take effect has been discussed elsewhere1.
As to the proviso, see discussion in Mulla2.
1. See discussion in the body of the Report, paras. 16-17.
2. Mulla, (1958), pp. 583-584, para. 591.
Clause 24
General.-See section 31, Provincial Act and section 25(1) to (4), Presidency Act.
Cognate provision.-It will be noticed that while this clause confers a power on the court to grant protection after adjudication, an earlier clause1 confers a power to grant protection prior to the adjudication. Further, while the exercise of the power under that clause is subject to various conditions and that clause is only a recognition of the inherent power of the court (recognised by the decisions) to grant protection at that stage, this clause confers a general power in wide terms.
State debts.-This is discussed separately2.
Submission of Schedule.-Under section 25(1) and (5), Presidency Act, a person who has not submitted his schedule cannot apply for protection unless the court thinks it necessary to grant him protection in the interest of the creditors. No such restriction appears to be called for, and hence the provision in the Presidency Act has not been incorporated in the clause under discussion.
"Provable in insolvency".-Instead of the words "all the debts of the debtor or to any of them as the court may think proper", occurring in section 31(12) of the Provincial Act, the words "debts provable in insolvency or to such of them" have been used. The words "provable in insolvency" will secure precision. [It may be noted, that section 25(2) of the Presidency Act uses the expression "mentioned in the Schedule".J The word "such" has also been used for precision.
"Modified".-Power to modify has been added.
Certificate by Official Assignee.-Section 25(4), latter part, of the Presidency Act provides that the insolvent should be prima facie entitled to a protection order on production of a certificate signed by the Official Assignee3 that "he has so far conformed to the provisions of this Act". This part of the sub-section in question has been omitted, because the real enquiry by the Official Assignee will, under the draft4, begin only after the adjudication, and therefore the Official Receiver would not be in a position to give such certificate soon after adjudication.
Discretion of court.-The grant of a protection order is a matter of discretion of the Court5. The Civil Justice Committee was unable to recommend any change in the provision6 (though it noted that it may be anomalous that an insolvent complying with the requirements of insolvency law may yet be liable to go to jail "for indefinite times").
1. Clause 13.
2. Notes to clause 136.
3. Mulla, (1958), p. 276, para. 279, expresses the view that even under the Provincial Act, the report of the Official Receiver will be taken into account.
4. Clause 29(5).
5. See AIR 1929 Cal 44 (Rankin C.J.) (Presidency Act).
6. Civil Justice Committee, Report, (1925), p. 231, para. 14.
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