Stay of Criminal proceedings insolvent.

This application has been put in by M. Venkataraman who was adjudicated insolvent by this Court on his own petition on 19th October, 1966. An interim protection under section 25 of the Presidency Towns Insolvency Act was given to him on 26th October, 1966. On 17th October, 1966, however a criminal complaint had been filed against him by one Harigopal Agarwal accusing him of an offence under section 420, Indian Penal Code, namely of obtaining of sum of Rs. 3,660 by false representations of offering to sell some land. The charge-sheet was filed by the Police in the Court of 8th Presidency Magistrate on 3rd January, 1967. The present application has been filed for stay of the proceedings before the learned Magistrate pending termination of the proceedings by way of discharge in the insolvency petition. The present application purports to be filed tinder section 18 of the Act which says:

“The Court may, at any time after the making of an order of adjudication stay any suit or other proceeding pending against the insolvent before any Judge or Judges of the Court or in any other Court subject to the superintendence of the Court”.

The Court is of course defined as the Court exercising jurisdiction under the Act. The contention of Sri Krishnamurthy, learned Counsel for the petitioner-applicant, is that the word ‘other proceeding’ is wide enough to include proceedings in the criminal Court.

I do not think however the contention can be accepted. I have no doubt that the word ‘other proceeding ‘relates only to a civil proceeding and not to criminal proceedings. If the contention of the learned Counsel for the petitioner were correct, it would follow that this Insolvency Court would have jurisdiction even to stop enquiry of an offence of murder alleged to have been committed by the insolvent. Surely that is unthinkable. The words ‘other proceeding ‘occurring in section 18 (1) must be construed with reference to the scheme of the Act. The scheme of the Act is only to give relief to the insolvent-debtor from pressure of his several creditors and to grant him discharge finally after securing an agreeable distribution of his asset and in the meantime protection against arrest or detention for any debt to which the Act will apply as given under section 25 (1). Section 25 (3) for instance says that a protection order shall protect the insolvent from being arrested or being detained in prison for any debt to which such order will apply and any insolvent detained or arrested contrary to the terms of such order shall be entitled to his release.

It is clear that the protection order is only against arrest or detention for any debt. For instance if there is an accusation of murder against the insolvent and the police arrest him therefor, the protection order granted under section 25 cannot avail the insolvent and the police will be free to arrest him subject to the provisions of the Criminal Procedure Code and it is only the criminal Courts which will have jurisdiction to deal with the matter.

The final purpose to be achieved by the Insolvency Court is to discharge the the insolvent from the debts provable in the insolvency. That is clearly stated under section 45 of the Act which says:

“...... Save as otherwise provided by sub-Section (1) an order of discharge shall release the insolvent from all debts provable in insolvency” .

It may be noted that even an order of discharge does not release the insolvent from some debts or some kinds of civil liability.

It may be that the order of protection will protect the insolvent from arrest or detention in respect of the civil liability of Rs. 3,660 which is alleged against him by Harigopal Agarwal. But there can be no doubt that the protection order is of no avail against the criminal prosecution for the alleged offence under section 420, Indian Penal Code.

The only relevant decision placed before me on this point is the decision of Beaumont, C.J., and Divatia, J., in Mahomed Hussein v. Emperor1. There an order for

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