[1935] EACA 141

## BANKRUPTCY JURISDICTION.

# Before GAMBLE, Ag. J.

#### IN RE JAN MOHAMED, the Debtor.

### Bankruptcy Notice No. 1 of 1935.

Bankruptcy Notice—Application to set aside.

The debtor was served with a Bankruptcy Notice on 21st January, 1935, giving him seven days in which to pay the amount of the debt with interest and costs. On 26th January he filed an application that the Bankruptcy Notice be set aside alleging particularly that the amount mentioned in the Bankruptcy Notice did not provide sufficient detail.

Held (22-2-35).—That a Bankruptcy Notice under section 3 (1) (g) of the Bankruptcy Ordinance need not enumerate principal, interest, costs and allowance for credits. It is sufficient if it claims the correct sum due under the judgment.

Modera for the debtor.—The Bankruptcy Notice must be in prescribed form and show how the figure claimed was arrived at otherwise the judgment debtor cannot challenge it: In re a debtor (1908 2 K. B. 684); In re H. B. (1904 1 K. B. 103). An account should be sent out: In re a debtor (106 L. T. R. 895). Referred to Form No. 4, Request for issue of a Bankruptcy Notice at p. 72 -of the Bankruptcy Rules. An order for payment of instalments was in existence in a Civil Suit at the instance of Lobo versus the debtor until 20th December, 1934. That order was set aside on that date. Until it was set aside it operated as a stay of execution. An appeal is now pending against the order setting aside the order for instalments.

Figgis, $K. C.,$ for the judgment creditor.—The cases quoted are cases in which the amount claimed was incorrect. Rule 314 of the Bankruptcy Rules provides that non-compliance with Rules shall not ipso facto render any proceeding void. Neither Rule 143 : nor section $7$ (4) apply to present circumstances.

#### $Modera$ replied:

ORDER.—This is an application to set aside a Bankruptev Notice issued by Lobo against the debtor one Jan Mohamed.

The facts are shortly that Lobo obtained judgment against the debtor for Sh. 22,976 and costs; an order was made for instalments of Sh. 100 per month, subsequently this order was rescinded and this Bankruptcy Notice is served under the provisions of section 3 (1) (g) of Ordinance 32/30.

The affidavit filed with the application to set aside discloses the grounds alleged for setting aside but the applicant has abandoned the third paragraph of his affidavit. This leaves the two following grounds available: $(1)$ that the amount claimed as due under the original degree is incorrect; (2) that execution of the decree-has been stayed.

The amount claimed under the decree and in respect of which. the Bankruptcy Notice has been served is Sh. $21,540/68$ . Mr. Modera alleges that this is incorrect.

The point raised is as far as I am aware a novel one in. this Colony and is not without difficulty.

It is settled practice that amendment of a Bankruptcy Notice. is not allowed by the Court except in the case of a merely formal defect; O. C. S. a debtor (1902 2 K. B. 163). It is necessary therefore to consider whether the omission to set out in detail how the sum of Sh. 21,540/68 was arrived at is a defect and if , so whether it is a merely formal defect. It was held in $In$ re a debtor (1908 2 K. B. 684), that the claiming of a sum of £1/5/6 in excess of the amount due was not a formal defect and thatamendment could not therefore be allowed.

But the position here is somewhat different: all that the debtor says is."I dispute the accuracy of the amount claimed". He does not say by how much it is wrong or whether too much or too little is claimed.

I have to consider whether the omission to set out seriatim. principal, interest, costs and credits for instalments is such a. departure from the terms of the original judgment as to be calculated to confuse and puzzle the debtor.

A case which has not been quoted to me but which is, I consider, instructive is that of In re a judgment-debtor (1908 $2$ ) In that case the notice required the debtor to pay K. B. 474). the balance £50/12/6 due on a final judgment obtained against him. In that case the bankruptcy notice was set aside and the reason for setting aside was that the original judgment. was that the plaintiffs do recover as partners, but the bankruptcy notice required that payment should be made to them not as partners but as individuals living in different counties. In other words the notice was not in accordance with the terms of the judgment. No objection was taken to the notice claiming $£50$ balance due on a final judgment and the inference can only be that no such objection can be taken. I would also in this connection refer to the cases of In re Howes (1892 2 Q. B. 628) and In re Child (1892 2 Q. B. 77).

Mr. Modera has contended that an account should be set. -out in detail either in the notice or in a marginal note. $N_{\diamond}$ provision is made in the form (Appendix 5) for setting out am

account and I can find no authority for the proposition that a marginal note is essential. In my opinion the proper procedure for the debtor to adopt would be to show that the bankruptcy notice claims more than is due. If the debtor satisfied the Court, that the wrong amount has in fact been claimed then I consider on the authorities that the notice would have to be setaside.

In this instance I am of the opinion that the bankruptcy notice is correct and that ground one of the supporting affidavit fails.

The second ground is that stay of execution had been granted: this can be shortly disposed of. It is true that as long as the order of 20-12-32 was in force, an order granted under O. 19, r. 37, execution was stayed.

The affidavit speaks of the order of WEBB J. which purports to revoke the order of 20-12-32. This order did more than purport to revoke, it did in fact revoke the instalment order and accordingly at the time of the issue of this bankruptcy notice execution Mr. Modera has referred me to the case of. was not staved. In re H. B. (1904 1 K. B. 94). I have read that case carefully but cannot find anything therein helpful. That case merely dealt. with a collateral agreement, still existing, to pay instalments. Here there was a Court order to pay instalments which had. been rescinded and the creditor gave credit for such instalments as had been paid prior to rescission.

Finally I am invited to stay these proceedings pending the result of a possible appeal from the order of WEBB J. rescinding the instalment order. R. 143 has no application and only pro- $\lambda$ hibits the issue of a receiving order during the pendency of an application to set aside a bankruptcy notice. Section 101 (2) of the Ordinance does give the Court a discretionary power of adjournment but I see no reason to exercise my discretion in these: $\mathcal{L}_{\text{max}}$ $\sim$ $\sim$ proceedings.

For the foregoing reasons the application to set aside this? bankruptcy notice is refused with costs against the debtor.

NOTE: Affirmed on appeal, 1935 $E. A. C. A.$ 1002 $\mathbb{R}$