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MUTTU MOHAMMADO v. RAMASAMY CHETTY et al.
NLR36V69
[IN THE PRIVY COUNCIL.]
1933 Present: Lord Atkin, Lord Tomlin, and Lord Thankerton.
MUTTU MOHAMMADO v. RAMASAMY CHETTY et al.
Insolvency-Licences to hold stalls-Assets of insolvent-Conduct as trader-
Discretion of District Judge-Court of Appeal.
Licences to hold stalls in a public market, which are personal and
non-transferable, do not form assets of an insolvent in insolvency proceedings.
The question of the insolvent's conduct as a trader or in relation to his estate
is a matter which rests mainly within the discretion of the District Judge; and
where the latter accepts the explanations offered by the insolvent, a Court of
Appeal should be slow to interfere with that discretion.
APPEAL
from a judgment of the Supreme Court 1[1 33 N.
L. R. 57.]
November 7,1933. Delivered by LORD THANKERTON.-
On November 21, 1927, the appellant's estates were sequestrated and he was
adjudged insolvent in the District Court of Colombo, on the petition of a
creditor and a declaration of insolvency and consent to the sequestration by the
appellant himself. A provisional assignee was appointed on that date, and an
assignee was appointed on December 13, 1927. The appellant having passed his
last examination on January 29, 1929, the public sitting for the allowance of
his certificate was held on various dates from September 19, 1929, to November
10, 1930, the granting of the certificate being opposed by the present
respondents. By order dated December 18, 1930, the District Judge awarded the
appellant a certificate of the second class, and, on appeal by the present
respondents, the Supreme Court of the Island of Ceylon, on June 25, 1931, set
aside the order of the District Judge and refused the certificate of conformity.
Hence the present appeal by the appellant. The respondents, who are creditors,
were not represented in the appeal.
Of the five grounds of
objection taken by the respondents, only four need be referred to, viz.: -
(1) The insolvent has unduly preferred one of his creditors, PonaVana Nadar.
(2) The insolvent has concealed and put away from his creditors all his property
and assets by handing over his business and effects to his various nominees.
(3) The insolvent has accounted for his property by fictitious loans and
expenses.
(4) The insolvent is carrying on a large and lucrative business at this moment
through and in the name of his nominees.
From the year 1920 the appellant had carried on an extensive butcher's business
at eight stalls in various public markets in Colombo under licences from the
Municipal Council, which were non-transferable and renewable each year, and as
security for which a deposit of three months' rent was required to be made. The
amount of the appellant's deposit was Rs. 945. As the result of competition
between the butchers carrying on business in these markets, the prices which
they had to pay for cattle were inflated, while the price of meat remained
stable, and serious losses were incurred by them, with the result that in 1926
the wealthiest of them, G. S. Mohammed Sultan, had ruined all his competitors.
In that year three of the butchers became insolvent and the appellant sustained
heavy losses. Moreover, the appellant's bank account was closed because
somebody, probably Sultan, informed the bank that the appellant was issuing
post-dated cheques. This was followed by the appellant's insolvency on November
21, 1927, as already stated.
On or about March 20, 1928, the appellant filed his balance sheet, as required
by the Ordinance, showing liabilities amounting to Rs. 180,108 and assets
amounting to Rs. 46,161. The second largest liability was a sum of Rs. 48,574,
shown as due on promissory notes to Pona Vana Nadar, and the largest asset was a
sum of Rs. 22,311, shown as due to the appellant from T. O. S. Rodrigo.
The respondents' grounds of objection related to the debt to Pona Vana Nadar and
th
