Jansz V. Weerasekera Et Al.,

1949 Present : Basnayake J. and Gratiaen J.

JANSZ, Appellant, and WEERASEKERA et al., Respondents

S. C. 245.-D. C. Colombo, 5777/Insol.

IN THE MATTER OF THE INSOLVENCY OF BERTRAM CLIFFORD JANSZ
OF PAMANKADE LANE, WELLAWATTA, COLOMBO

Insolvency Ordinance-Fraudulent preference-Possible even when there is no moral blame-Refusal of certificate of Conformity:-Extenuating circumstances- Sections 58 and 151.

A fraudulent preference need not involve any moral blame at all, and an insolvent will be guilty of it if, for example, he makes payment to his creditors influenced by the property of some and out of gratitude to others.

Where fraudulent preference is proved but there are extenuating circumstances an insolvent will not be refused a certificate of conformity for all time.

APPEAL from an order of the District Court, Colombo.

S. Nadesan, with M. A. M. Hussain, for insolvent appellant.

S. J. Kadirgamar, with R. S. Wanasundera, for opposing-creditor respondent.

Cur. adv. vult.

September 28, 1949. BASNAYAKE J.-

The appellant (hereinafter referred to as the insolvent) appeals from the order of the District Judge refusing him a certificate of conformity and withdrawing the protection from arrest granted to him under section 36 of the Insolvency Ordinance.

Objection has been taken to the grant of a certificate of conformity by one Verona Florence Weerasekera, a creditor (hereinafter referred to as the opposing-creditor) to whom a sum of Rs. 1,950 is due on a promissory note dated December 4, 1945. The grounds on which her objection is based are as follows :-

" (1) The insolvent has, in contemplation of insolvency or with the intent to defeat the object of the Insolvency Ordinance, concealed part of his property.

(2) The insolvent has contracted debts under false pretences and has by false pretences obtained the forbearance of his creditors.

(3) The insolvent has within two months next preceding the filing of the petition for sequestration of his estate, fraudulently in contemplation of insolvency and with intent to diminish the sum to be divided among his creditors, or to give undue preference to some of his creditor, has paid some creditors wholly or in part and has made away with part of his property.

(4) The insolvent has under his insolvency attempted to account for his property by fictitious losses.

(5) The insolvent has not made a full and true disclosure of all his matters and assets. "

One Richard James Norton Weerasekera, a brother of the opposing creditor, has given evidence on behalf of the opposing creditor. He details the circumstances in which the opposing creditor case to make the loan to the insolvent. He says that the insolvent whom he had known for about 15 years came to see him in December, 1945, and told him that

he was in debt and that if his father came to know about it he would be in a bad way, but that if he managed to clear his debts his father would take him on as a partner in his father's business. The insolvent wanted Rs. 1,500 to clear all his debts. The witness knew that the insolvent's father was a prosperous business man and says he believed him. The witness therefore arranged for a loan from his sister, the interest charged being 15 per cent. per annum. The witness says: "I would not have given this money to him if I knew that the representations he made were false". The evidence of this witness does not in my opinion support the allegation that the opposing creditor was induced to lend the money on false representations made by the insolvent to her, nor is there any evidence to the effect that the witness acted as an insolvent's agent or made any false representations on his behalf and thereby induced the opposing creditor to lend the money.

On the evidence of the witness Richard James Norton Weerasekera the learned District Judge holds that the opposing creditor was induced by her brother, the witness, to make

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