Report No. 26
1. This is based on section 63 of the Provincial Act (which corresponds to section 72 of the Presidency Act).
2. The words "in the hands" have been substituted by the words "under the control" as more appropriate1-2-3.
3. Instead of the existing negative wording "Any creditor who has not proved his debt before", the positive wording "Any creditor who has proved his debt after" has been preferred.
1. Cf. clause 75.
2. Cf. section 72, Presidency Act, as amended in Madras.
3. cf. section 122, PTA.
This is based on section 64 of the Provincial Act and section 73 of the Presidency Act. It may be noted that while under the Provincial Act, it is the court that has to decide (when all the properties have not been realised), whether a final dividend may be declared, under the Presidency Act, it is the Official Assignee who has to come to a decision on the question, but leave of the court has to be obtained before the final dividend is declared. The difference in substance, is slight; but the language of the Presidency Act has been preferred to that of the Provincial Act.
In sub-clause (2), the words "entered in the schedule" have been replaced by "proved their debts" (as in the Presidency Act) as more appropriate1.
1. Cf. clause 72.
This is based on section 65 of the Provincial Act. Following section 74 of the Presidency Act, two changes have been made:-
(i) Instead of "entered in the schedule", the words "aggrieved by such refusal" have been used, as more appropriate.
(ii) The rates have been left to be prescribed.
Further, there is no reason why the Official Assignee should pay the interest on the demand out of his own money. Such a provision is harsh. In Madras and Bombay1, the Presidency Act has been amended so as to remove this personal liability, and there is no reason why the amendment should not be made applicable to the whole of India. Necessary changes have been made accordingly.
1. See the amendment to section 74, Presidency Act, made in Madras and Bombay.
This is based on section 66 of the Provincial Act, which corresponds to section 75 of the Presidency Act. The clause differs from the former in requiring an application of the Official Assignee-a requirement which has been inserted as a useful safeguard. It differs from the latter in this, that it is the court and not the Official Assignee that has to make the appointment.
The Presidency Act makes this power "subject to such conditions and limitations as may be prescribed". But this restriction has not been adopted, as it is unnecessary and not found in the Provincial Act.
1. The main paragraph is based on section 67 of the Provincial Act (corresponding to section 76 of the Presidency Act).
2. For an exhaustive discussion of the scope of this section, see a recent Supreme Court case1. One of the points made in the Supreme Court case was, that property (whether movable or immovable) which devolves on the insolvent after his becoming insolvent and before discharge is also included in the "surplus" of which the section speaks. The Explanation seeks to codify the position on that point2.
1. Raghunath Kharkar v. Ganesh Kharkar, (Supreme Court) decided on 2nd May, 1963 (C.A. No. 98 of 1962) (Judgment delivered by Wanchoo J.) on appeal from Bombay), AIR 1964 SC 234 (Feb.).
2. Generally as to effect of discharge, see Mulla, (1958), pp. 397, 398, 687, 699.