Public Service Mutual Provident Association V. Abram Et Al.,

Present: Wijeyewardene and Jayetileke JJ.

PUBLIC SERVICE MUTUAL PROVIDENT ASSOCIATION,

Appellant, and ABRAM et al. Respondent.

90-D. C. Colombo, 5,588.

Insolvency-Mortgage debt of insolvent-Arrangement to pay debt by instalment from pension-Payment of instalment after adjudication-Right of Assignee to amount paid.

The insolvent, a Government servant, who had retired on pension, owed money to the Public Service Mutual Association on a mortgage bond.

The bond was put in suit by the Association and a decree was entered in its favour. Prior to adjudication the Insolvent had arranged that the Treasury should pay out of his pension a sum of Rs. 69.50 monthly to the Provident Association in reduction of the claim on the bond.

The assignee applied for an order on the Provident Association to bring to the credit of the insolvency case the sum of Rs. 451.33 received by the Association after the insolvent was adjudged as such.

Held, that the assignee was entitled to an order vesting the said sum of money-in him in the insolvency proceedings.

APPEAL from an order of the District Judge of Colombo.

E. B. Wikremanayake, for appellant.

G. P. J. Kurukulasuriya, for assignee, respondent.

Cur. adv. vult.

February 2, 1943. WIJEYEWARDENE J.-

The insolvent, G. W. Perera, was a Government servant and retired from service on a pension. He mortgaged a property of his with the Public Service Mutual Provident Association for Rs. 7,500. That bond was put in suit in July, 1941, and a decree was entered in October, 1941. Prior to his adjudication, the insolvent arranged that the Treasury should pay out of his pension a sum of Rs. 69.50 monthly to the Provident Association in reduction of the claim on the bond. The assignee applied to Court for an order on the Provident Association to bring to the credit of the insolvency case the sum of Rs. 451.33 so received by the Association after the insolvent filed his declaration of insolvency and was adjudged an insolvent. The District Judge allowed the application and the Association has preferred the present appeal against that order.

It was urged on behalf of the appellant-

(i.) that the appellant was entitled under section 99 of the Insolvency Ordinance to set off the sum of Rs. 451.33 against the debt due to him.

(ii.) that a pension did not vest in the assignee as the right to a pension was not a right which could be enforced at law.

The first argument is clearly untenable as section 99 does not apply to credit given or debts contracted by an insolvent after his adjudication.

With regard to the second argument, it is necessary to consider the 'effect of' certain rules of the Pension Minute and the provisions of the insolvency Ordinance. Section 70 of the Insolvency Ordinance enacts that, "when any person shall have been adjudged an insolvent, all his personal estate and effects, present and future .... and all

property which he may purchase, or which may revert, descend .... or come to him and all debts due or to be due to him .... shall become .... vested in the assignee . . . . " Our Ordinance as well as the English Bankruptcy Act of 1849, on which our Ordinance is based, do not contain a definition of " property "; but it was held in Baker v. Vairamuttu Chetty 1[26 N. L. R. 360] that the words of the section were wide enough to include the " salary" or " income" of a mercantile assistant. How does a pension of a public servant, differ from such " salary" or " income"? Generally speaking, in the absence of any statutory enactment a pension awarded for past services could be attached in satisfaction of the debts of the pensioner just as much as any other income of his, at least to the extent that it is not needed for the maintenance of the insolvent and his family. It is true that Rule 1 of the Pension Minute provides that " public Servants have no absolute right to any pension .... a

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