1957 (1) TMI 57 - HC - Indian Laws

Summary

Issues Involved:
1. Compliance with Order 21, Rule 2 of the Original Side Rules.
2. Scope of Section 33(4) of the Provincial Insolvency Act.
3. Requirement of possession and control of the property at the time of the order.
4. Enforceability of an order for payment of money by contempt proceedings.
5. Willfulness of disobedience in contempt proceedings.

Issue-wise Detailed Analysis:

1. Compliance with Order 21, Rule 2 of the Original Side Rules:
The insolvent argued that the mandatory provisions of Order 21, Rule 2 were not complied with, rendering the notice and subsequent proceedings irregular and void. However, the court noted that Section 90 of the Presidency Towns Insolvency Act provides that the court shall have the powers and follow the procedure of its ordinary original civil jurisdiction, but it does not limit the jurisdiction conferred by the Insolvency Act. The court referred to the decision in Bhuramull Banka v. Official Assignee, Bengal, where it was held that verbal orders by the Official Assignee were valid and did not require written orders or personal service for contempt proceedings. Thus, the court concluded that the provisions of Order 21, Rule 2 were not applicable in this context.

2. Scope of Section 33(4) of the Provincial Insolvency Act:
The insolvent contended that an order for payment of money does not fall within the provisions of Section 33(4). The court examined the language of the section, which requires the insolvent to "deliver up possession" of any part of his property. The court held that the term "property" includes money and that the expression "deliver up possession" does not exclude money. The court emphasized that the purpose of Section 33(4) would be defeated if it were interpreted to exclude orders for payment of money.

3. Requirement of possession and control of the property at the time of the order:
The insolvent argued that for Section 33(4) to apply, it must be shown that the property was in his possession and control at the time the order was made. The court found that the insolvent had failed to account for a sum of Rs. 2,490, which was equivalent to finding that he was retaining the money. The court inferred that the insolvent continued to be in possession of the money, as he did not provide a credible explanation for its disposal.

4. Enforceability of an order for payment of money by contempt proceedings:
The insolvent contended that an order for payment of money could only be enforced through execution proceedings and not by contempt. The court acknowledged that ordinarily, orders for payment of money are enforced by execution. However, it noted that in insolvency cases, execution proceedings are not available as the estate vests in the Official Assignee. The court referenced the decision in In re Pickard, which supported the enforcement of money orders by committal in bankruptcy cases. Thus, the court concluded that contempt proceedings were appropriate for enforcing the order for payment of money in this case.

5. Willfulness of disobedience in contempt proceedings:
The insolvent argued that it must be shown that the disobedience was willful for contempt proceedings to be valid. The court agreed that willfulness is a necessary element but found that the insolvent's failure to bring in the money was willful. The court noted that the insolvent had been given multiple opportunities to comply with the order and had not provided a believable explanation for his inability to pay. The court concluded that the insolvent's refusal to bring in the money was willful and constituted contempt.

Conclusion:
The court held that the insolvent had willfully disobeyed the order to bring in the money and committed him to jail for six months for contempt of court.