Report No. 26
Clause 58
This is a new provision, which follows section 46 of the English Act, and is intended to protect payments, etc., made to an insolvent without notice of presentation of the petition. The insertion of such a provision has been suggested by Mulla1. The suggestion has been accepted, as such protection seems to be needed. (The English section was first introduced, as pointed out by Williams2, to remedy the dilemma of a defendant to a money claim who has notice of an act of bankruptcy, and generally to prevent such notice from "paralysing" persons dealing with the debtor in the ordinary course of business or otherwise bona fide3.)
Since in the clause4 dealing with protected transactions, want of notice of act of insolvency has been substituted in place of want of notice of presentation, etc., this change is necessary.
1. Mulla, (1958), p. 28, para. 29.
2. Williams, p. 373, bottom.
3. As to the existing law in India, see Mulla, (1958), p. 653, para. 660 and p. 582, para. 588.
4. See clause 57.
Clause 59
This is a new provision, suggested by section 66 of the Canadian Act.
Clause 60
General.-This follows, in general, section 58, Presidency Act. Compare section 56(3), Provincial Act.
Sub-clause (1).-Needs no further comments.
Sub-clause (2).-There is a provision in section 56(3), proviso, Provincial Act barring removal from possession of "any person whom the insolvent has not a present right so to remove". It does not appear in the Presidency Act, and has therefore been omitted1. The sub-clause covers section 56(3), main para., Provincial Act and section 58(2), Presidency Act. The latter is better, and has been mainly followed2.
Sub-clause (3).-Needs no further comments.
Sub-clause (4).-The words "things in action" used in the Presidency Act have been replaced by "actionable claims", (being the expression used in the Transfer of Property Act).
Sub-clause (5).-The mention of "contempt of court" appearing in the Presidency Act, has been replaced by a reference to section 188, I.P.C., as the new Act will apply to the Mofussil also.
1. Discussion in Mulla is at p. 672, para. 686.
2. Cf. Mulla, (1958), p. 671, para. 684.
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