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Report No. 26

Clause 126

This is new. It is considered necessary to make an express provision to the effect that a prosecution for offences under the new law should not be instituted except by complaint of the (Insolvency) court, or by its order. It is also considered, that this requirement should continue to apply even after the insolvency proceedings have terminated.

Clause 127

This follows section 70 of the Provincial Act and section 104 of the Presidency Act1. A reference to the new section regarding offences proposed to be added has been made2.

One object of the procedure provided in section 104 of the Presidency Act is to avoid the necessity of trial by the Insolvency Judge; the other object is to bring the procedure in conformity with section 476, Cr. P.C3.

1. The Presidency Act was amended as a result of the recommendation of the Civil Justice Committee, 1925 Report, p. 233, para. 16.

2. See clause 120, et seq.

3. See Emperor v. Girish Chandra, AIR 1929, Cal 777 (Buckland J.).

Clause 128

This is based on section 71 of the Provincial Act (which corresponds to section 105 of the Presidency Act).

In the Provincial Act, the offence of an undischarged insolvent obtaining credit is not mentioned in this section, while the Presidency Act mentions it. It is considered that prosecution for such offences should not be barred by the discharge of the insolvent in the meantime. The clause has, therefore, been altered by adding a reference to the clause1 dealing with that offence.

References to other offences proposed to be added2 have also been added.

1. Clause 125.

2. See clause 120, etc.

Clause 129

1. This is mainly based on section 73, Provincial Act (which corresponds to section 103A, Presidency Act).

2. The existing disqualifications extend only to appointment, etc., as a Magistrate. It is, however, considered that insolvents should be disqualified from holding civil judicial posts also. The necessary change has been made.

3. Portions relating to membership of local authority have been omitted. The matter should be left to be dealt with by State legislation as it falls within the State List.

4. The provision for appeal has been retained (though not found in the Presidency Act), as a useful provision1.

5. Following2 section 9, Bankruptcy Act, 1890, a provision to the effect that the disqualification shall cease at the end of five years from discharge has been added. Further, the court has been given a power to specify a shorter period.

1. As to appealable orders under the Presidency Act, see MuIla (1958), p. 740, para. 785.

2. See Williams, p. 836, bottom, for the English provision, which is still in force.

Clause 130

Sub-clause (1).-This corresponds to section 78 of the Provincial Act1. (There is no corresponding provision in the Presidency Act, but it has been adopted as a useful provision.) It departs from the Provincial Act in two respects:-

(i) Not only sections 5 and 12 of the Limitation Act, but all sections have been made applicable. It is considered that there is no reason why only some should be mentioned.

(ii) Under the existing section, only decisions under section 4, Provincial Act, are deemed to be decrees. Instead of this, all appealable decisions will be deemed to be decrees2.

Sub-clause (2)-Follows section 78(2) of the Provincial Act and section 101A of the Presidency Act. The wording in the Provincial Act is-"suit or application for execution", while the wording in the Presidency Act is "suit or other legal proceeding". The wording in the Presidency Act is more precise and comprehensive, and is in harmony with the wording in the provisions relating to grant of leave for suit, etc.-section 28 of the Provincial Act and section 17 of the Presidency Act. It has, therefore, been preferred.

Exclusion of Limitation for suits by Receiver.-There is one point to which attention might be invited. In the Report of the Law Commission on the Limitation Act, it has been suggested3, that for a suit by the Official Receiver on behalf of the insolvent, a provision4 for exclusion of limitation of the period from petition to adjudication, etc., should be inserted.

This recommendation has already been implemented5.

1. As to need for the existing section, see Mulla, (1958), p. 797, para. 846.

2. The discussions on the Bill leading to the 1920 Act do not disclose the reasons for mentioning only section 4.

3. Third Report (Limitation Act), para. 45.

4. Third Report (Limitation Act), App I, clause 14(3), gives a draft also.

5. See Limitation Act, 1963, section 15(3).

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