The remission of a debt without consideration constitutes a voluntary transfer under Section 55 of the Presidency-towns Insolvency Act, and the provisions of Section 55 override the provisions of Section 63 of the Contract Act.

Mockett, J.

1. The Official Assignee by this Notice of Motion seeks for a declaration that the settlement of a debt of Rs. 2,453 due to the insolvent by the respondent alleged to have teen effected on the 17th of February, 1934 by the payment of Rs. 913 is a voluntary transfer under Section 55 of the Presidency-towns Insolvency Act so far as the balance Rs. 1,540 is concerned. The facts are these. The Insolvent and the respondent have been doing business together and on the above date the respondent admittedly owed to the insolvent a sum of Rs. 2,453. This debt was settled by payment in cash of Rs. 713 and a promissory note for Rs. 200 making Rs. 913 and by the balance of Rs. 1,540 being waived. The respondents story is that this amount was remitted because the insolvent had been supplying to him (the respondent) tobacco of a low quality over a period of four years and that at the time of settlement he requested the insolvent to show him some consideration. His exact words are, "I complained and he said he would make an allowance". It should be noticed that the respondent does not suggest that he threatened the insolvent with an action in respect of the quality of the tobacco. He says that Kotayya (the insolvent) sent him a demand notice for the Rs. 2,453, but has not produced the notice, and I am inclined to think that the story is an after-thought with a view to assist his case in some way which I do not quite follow. It would have been more relevant of course if a demand had been made upon the insolvent by the respondent. This version of the facts given by the Respondent is used by him in this way. He says this transfer, assuming it to be a transfer, which he denies, was in favour of a purchaser in good faith and for valuable consideration. As to this, as I have pointed out the only evidence on the record is that the respondent requested the insolvent to make an allowance. There is no suggestion that there was any compromise of a claim. But on the respondents story I think I might have held that this was a settlement of a difference between the respondent and the insolvent and it was protected by the saving clause in Section 55; that is to say, had I considered that his story was true. But in order to test the veracity of a story such as this, the only valuable evidence is as a rule documentary, that is, records of the transaction made at the time. Now the only record of this transaction is found in the respondents own book, Ex. Ill under the insolvents account. This reads--"17th February, 1934. Debit owing to inability to pay the amount due, amount given up as an act of grace as per order of P.K. Rs. 1,590-0-10". That is an entry in the handwriting of the insolvents clerk. There is not a word about any dispute as to the quality of the tobacco. The respondents explanation is; "that is the usual way to write such transaction. They must write only like that. There is no other reason". Then, in the promissory note, the Rs. 200 is stated to be "for value received in cash", and there is nothing there about the compromise. None of the attesting witnesses to the promissory note have been called, and it is admitted that none of them objected to the form of the promissory note which was clearly not accurate. The respondent kept no account of the damaged goods. Thus, finally, it comes to this, that the only record, that is Ex. Ill, exactly bears out the Official Assignees case and contradicts the respondents. I cannot therefore accept the story about the tobacco dispute and I think that this remission of Rs. 1,590-0-10 was for some other reason. Rs. 1,590 is a very large sum to remit out of Rs. 2,453. The whole story is unconvincing read with the book entry.

2. [His Lordship then dealt with the evidence and continued.]

3. The result of these facts, in my view, is as follows : On the 17th of February the insolvent remitted without consideration to the respondent the sum of Rs. 1,590 by receiving, in payment of a debt of Rs. 2,453