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Baldeo Das vs Sukhdeo Das

High Court Of Judicature at Allahabad|30 November, 1896


JUDGMENT John Edge, Kt., C.J. and Burkitt, J.
1. Baldeo Das a judgment-debtor arrested in execution of a decree against him, applied under Section 344 of the Code of Civil Procedure to be declared an insolvent. The applicant filed a schedule of his assets and liabilities, and it is not suggested that he had done anything which, under Section 351 of the Code, would be a bar to a declaration of this insolvency being made. However, the schedule of assets and liabilities showed this, that the applicant had assets of the value of over Rs. 12,000, and his liabilities amounted to a little over 6,000. It is true that much of the assets consisted of moneys lent upon mortgages or shares in sums of money lent upon mortgages, but he had also zamindari and some other assets. He filed no statement containing an estimate of the present realizable value of his assets; and, for all we know from this record, the sale of his zamindari and of his mortgagee interests under the mortgages might realize more, and that promptly, than would enable him to pay his debts in full. The Court below dismissed his application and he has brought this appeal.
2. The decision of the High Court at Calcutta in Jowalla Nath v. Parbatty Bibi I.L.R. 14 Cal. 691 has been pressed upon us on behalf of the appellant. Now we entirely agree with what is said in that judgment that "it is quite an error to suppose that a man is not entitled to be declared an insolvent because the sum total of his assets is larger than the sum total of his debts. It may well be, and is frequently the case, that a mans securities are locked up and are not available at the time he is called upon to pay his debts; but he is none the less entitled to be declared an insolvent, unless he is found guilty of dishonest conduct." It is obvious that a man may have assets of the nominal value of Rs. 20,000 and liabilities amounting to no more than Rs. 6,000, and yet at the time he may be insolvent, that is, unable to pay his debts in full. His assets might be unrealizable, except at such a sacrifice as would leave the proceeds insufficient for the payment of his debts. In such a case the man would be an insolvent. But in our opinion where a man applies to be declared an insolvent and shows in his statement that his assets exceed his liabilities, he must go further and show that by sale of his interests, or other realization of his assets, a sum would not be secured which would enable him to pay his debts in full. That the applicant has not done in this case. The onus was on him. We entirely dissent from that portion of the judgment in the Calcutta case in which it is said that the Judge "could not refuse to declare the applicant an insolvent unless he found affirmatively that the applicant had brought himself within what I may call the penal clauses of Section 351." If the law were as put in the sentence which we have quoted, it would apparently be immaterial whether the man who applied under Section 344 of the Code of Civil Procedure to be declared an insolvent was actually insolvent or was capable of paying his debts ten times over. The truth is that the chapter in question, namely, Chapter XX of the Code of Civil Procedure, in which these sections occur, is a chapter dealing with "insolvent judgment-debtors," that is, with judgment-debtors who are incapable of paying their debts at the time. The chapter does not apply to a judgment-debtor who is not insolvent. Insolvency is what lies at the root of all the provisions of the chapter. In the present case the applicant apparently desires by a declaration of insolvency to appoint the Court his agent to collect his debts and to escape the worry of having to do it for himself. We dismiss this appeal with coats.
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Baldeo Das vs Sukhdeo Das


High Court Of Judicature at Allahabad

30 November, 1896
  • J Edge
  • Kt
  • Burkitt