26 NLR 360

• Jurisdiction: Sri Lanka
• Court: Court of Appeal (Sri Lanka)
• Citation: 26 NLR 360
• Date: 23 January 1925
• Case Number: NLR26V360
• Type of Document: Case report

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Present: Garvin J. and Jayewardene A. J.

BAKER v. VAIRAMUTTU CHETTY.

183-D.C. (Inty.) Colombo, 3.364.

Insolvency-Personal earnings-Rights of assignee-Ordinance No. 7 of 1853, s. 70.

An insolvent's salary vests in the assignee, except to the extent necessary for the maintenance of himself, his wife, and his family. It would be open to a Court to direct the insolvent to pay into Court or to the assignee so much of the salary as is not required for the purpose of such maintenance.

APPEAL by an insolvent from an order of the District Judge of Colombo directing him to pay into Court for the benefit of his creditors a sum of Rs. 175 out of his monthly salary of Rs. 375, which he earned as an assistant in a business firm. It, was contended for the insolvent that his salary does not vest in the assignee, and that he could not be called upon to bring any portion of it to Court.

Canjimanathan, for insolvent, appellant.

James Joseph, for creditor, respondent.

January 23, 1925. Jayewardene A.J.-

This is an appeal by an insolvent against an order directing him to pay into Court for the benefit of his creditors a sum of Rs. 175 out of his monthly salary of Rs. 875, which he earns as an assistant in a Port firm. It is contended for the appellant that an insolvent's salary does not vest in the assignee, and that he cannot be called upon to bring any portion of it into Court. He relies on section 70 of the Insolvent Ordinance, 1853, the material part of which is as follows:-"When any person shall have been adjudged an insolvent all his personal estate and effects, present and future, whosesoever the same may be found or known, and all property which he may purchase, or which may revert, descend, be devised or bequeathed, or come to him before he shall have obtained his certificate, and all debts due or to be due to him, wheresoever the same may be found or known, and the property, right, and interest in such debts, shall become absolutely vested in the assignees for the time being, for the benefit of the creditors of the insolvent, by virtue of their appointment. . . . "

No doubt section 70 does not expressly refer to the " salary " or wages " of an insolvent, but the words are wide enough to cover the " salary " or " income " earned by an insolvent. But it has

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been held trader the corresponding section of the English Bankruptcy, Act. of 1849, an which hour Ordinance is based, that money earned; by a bankrupt by hits personal exertions does not vest in the assignee, if such money, is required for, the support and maintenance of himself, his wife, and his family (chippendale v. Tomlinson, ¹ Hesse v. Stevenson, ² Williams v. Chambers ³).

In re Roberts, ⁴ Lindley L. J. discussed the right of an assignee to the earnings of a' bankrupt, and said--

' The Bankruptcy Act of 1883, like its predecessors,, excepts a bankrupt's tools and contemplates the acquisition of future property by. a bankrupt, and he must live to use his tools and acquire such property., The present Act, like previous Bankruptcy. Acts, must be construed so as to enable him to do so; and the language of section 44, clear and express as it is, must not, therefore, be taken so literally as to deprive the bankrupt of those fruits of his personal exertions which are necessary to enable him to live. But, On the other hand, the necessity is the limit of the exception. This is in entire accordance with modern, decisions. See Mercer v. Vans Colina, ⁵ In re Graydon ⁶; Wadling v., Oliphant, ⁷ Emden v. Carte⁸ In re Rogers; ⁹"

and in Affleck v. Hammond, ¹⁰ Kennedy L. -J., dealing with the same point, said-

"By section 44 of the Bankruptcy Act, 1883, the trustee in bankruptcy has a general right to intervene. But on. that general right of intervention there has been grafted an exception in favour of...