In Re: Estate of Atma Ram; Ex Parte: Creditors (Bankruptcy Cause No. 22 of 1955) [1955] EACA 232 (1 January 1955)

## BANKRUPTCY JURISDICTION

## Before CRAM, Ag. J.

# IN RE ESTATE OF ATMA RAM: EX PARTE CREDITORS

## Bankruptcy Cause No. 22 of 1955

Bankruptcy Ordinance, Cap. 30, section 120 (2)—Bankruptcy Rules 251, 252 and 253—Petition by creditors for an order for administration of deceased's estate -No legal personal representative constituted—Personal representative served—Whether order competent—Application for order to serve on personal representative—Costs.

The creditors petitioned the Court under the provisions of section 120 (2) of the Bankruptcy Ordinance, Cap. 30, for an order for the administration in bankruptcy of a deceased person, alleging insolvency. Service was effected on the widow, who filed a consent to the order stating she did not intend to take out letters of administration. The widow appeared at the hearing and affirmed both consent and intention. The advocate for the creditors submitted that an order as competent because of rule 253 of the Bankruptcy Rules, otherwise an order in administration might follow were the Court first to order service on the widow as personal representative.

*Held* $(20-10-55)$ .—(1) As a prerequisite to any order for administration of the deceased's service on the legal personal representative of the deceased and intended service upon a personal representative legally constituted.

(2) The Bankruptcy Rules must be read together with the relevant Ordinance and, statutorily, could not be read as inconsistent with the provisions of the Ordinance. Rule 253 contemplated a competent order made after service upon a legal personal<br>representative who had subsequently died but any construction of the rule that an order might be made without such service or with service upon a personal representative not legally constituted was unlawful because of conflict with section 120 (2) of the Ordinance.

(3) A mere order for service on the personal representative would not be grounds upon which the Court could make an administration order and, in any event, the personal representative had already been served and had refused to take out letters of administration.

Petition adjourned back into chambers with an order for costs in the cause,

Cases cited: Ex parte Sleet, (1894) 2 Q. B. D. 797 C. A.: In re a Debtor, (1939) Ch. Div. 594; Attorney-General v. De Keyser's Royal Hotel, Ltd., (1920) A. C. 508 H. L.;<br>Ex parte David, (1872) L. R. 7 Ch. 529; In re Bentley, B. C. 12 of 1952, (unreported).

#### Trivedi for petitioners.

RULING.—Two creditors petition the Court for an order for the administration in bankruptcy of the estate of a deceased Asian, invoking the provisions of<br>section 120 of the Bankruptcy Ordinance, Cap. 30. They allege, in an affidavit in support of the petition, that the estate is insufficient to pay the debts due; that no one has applied for letters of administration or for probate and that the widow is not prepared to take out letters of administration. The petition having been filed the creditors purported to act as required to sub-section (2) of section 120 and served a notice, endorsed on a copy of the petition, as provided by Form 9 of the Bankruptcy Rules, upon the widow. The widow riposted by filing a letter admitting receipt in which she stated that she had no objection to an order being made on the petition. At the hearing of the petition it was said

the deceased died intestate. The Court enquired of the advocate for the petitioners if it were competent to make an order in the absence of service upon the "legal personal representative" indicated by section 120 (2). In reply, the procedure followed in In re Bentley, Ex parte Creditors, B. C. 12 of 1952, was cited and an application made for an order for service upon the widow. The widow attended at the hearing but said that she did not wish to take out letters of administration although she wished the petition to succeed. The Court reserved ruling.

The difficulty is to interpret the intent of the words contained in section 120 (2), viz.: $-$

"Upon the prescribed notice being given to the legal personal representative of the deceased debtor, the Court may, in the prescribed manner... make an order for the administration in bankruptcy of the deceased debtor's estate or may on cause shown dismiss the petition with or without costs" and to reconcile the rules with the sub-section. Prima facie the sub-section appears to make service a condition precedent to granting the petition. Moreover service has to be upon a person acting in a defined capacity, i.e. "the legal personal representative of the deceased debtor...."

### Rule 253 runs: —

"In any case under which an administration order under section 120 of the Ordinance has been made, and it appears to the Court, on the report of the receiver, that no executor or legal personal representative exists, the account, ... shall be made ... by such person as in the opinion of the Court, upon such report, may have taken upon himself, the administration of, or may otherwise have intermeddled with, the property of the deceased, or any part thereof."

Prima facie, this rule suggests that its provisions come into effect only after an administration order has been made and it provides for eventualities which may result from the death, failure or disappearance of the legal representative although conceivably it could be argued upon the rule that an order might be made upon a petition where no legal personal representative had ever existed.

I refer to In re Sleet, Ex parte Sleet, (1894) 2 Q. B. 797 C. A., which concerned a petition presented for an order in bankruptcy on the estate of a deceased debtor, under section 152 of the Bankruptcy Act, 1883, a section in pari materia with section 120 of the Ordinance. The petitioners alleged that the debtor had died intestate and that no administration had been granted in respect of his estate and that the widow had possessed herself of the deceased's assets and had so constituted herself executrix de son tort of the deceased. Leave was given to serve the petition on the widow as the person who had intermeddled with the assets of the deceased, but, before the petition was heard, administration of the estate was granted to her. On behalf of the widow it was argued that, as at the date of the service of the petition no legal personal representative of the deceased had been constituted, the Court had no jurisdiction to make the order. The submission failed and the order was granted. The administratrix appealed. Lord Esher, M. R., said that no valid objection could be raised to the petition on the ground that at the date of its service administration to the estate of the deceased had not been granted. Notice had been given to the widow who, before the hearing, became the legal personal representative of the deceased debtor. There was therefore at the date of the hearing jurisdiction to make the order.

In re a Debtor, (1939) Ch. Div. 594, concerned a petition at the instance of the creditors of a deceased debtor for an order under section 130 of the Bankruptcy Act, 1914, which is in pari materia with section 120 of the Bankruptcy Ordinance, and also with section 125 of the Bankruptcy Act, 1883, alleging that the will had not been proved as the executors had renounced probate and that the deceased's legal personal representative had not applied for letters of administration. Morton, J. said, after reading section 130 (2) (which is identical with section 120 (2) of the Ordinance: $-$

"It would appear *prima facie* that ... the court's jurisdiction to make the order arises only upon the prescribed notice being given to the deceased's legal personal representative."

And after reading the remaining sub-sections: -

"But for the rules ... it would seem to me plain that, on the construction of the section, the court cannot make an order for the administration in bankruptcy until a legal personal representative has been constituted."

Rule 301 (which is identical with rule 251 of the Bankruptcy Rules, Kenya) $runs:$

"(1) The petition shall, unless the court otherwise directs, be served on each executor who has proved the will, or, as the case may be, on each person who has taken out letters of administration. The court may also, if the court thinks fit, order the petition to be served on any other person.

The learned judge said: $-$

"That rule does not, in my view, supply any indication that an order can be made on the petition when no legal personal representative has been constituted. It appears to me to be directed merely to giving the Court power, if it thinks fit to direct that the petition need not be served upon every one of a number of executors or a number of persons who have taken out letters of administration."

In construing rule 402 (which is identical with our rule 252) he found no grounds enabling the court to make an order before a legal personal representative had been constituted.

He then considered rule 303, upon which the petitioners chiefly founded (which is identical with the Kenya Rule 253) and stated: $-$

"The rule may perfectly well be reconciled with the section by reading the rule as directed to a case where there was an executor or legal personal representative at the date of making of the order, but such executor or legal personal representative died after the date of the order. . . . In those circumstances, there is this useful rule under which the account, list and statement, which in the ordinary way would be delivered by the legal personal representative may be delivered by a person who has intermeddled with the estate. To read the rule in any other way, would be to read it in a manner directly contradictory to the provisions of the statute and, in particular, to section 130, sub-section (2) to which I have already referred. Mr. Morle has urged upon me that, from a business point of view, it would be extremely convenient and would save a great deal of delay and expense if the Act had the meaning for which he contends. That may well be the case but, if there is any good reason why the Court should be given power to make an order for representation in bankruptcy before a legal personal representative has been constituted, that is a matter for the Legislature and not for the Court. I must construe section 130 as it stands and I cannot give it the construction for which Mr. Morle contends. . . I need only say that, on referring . . . to In re Sleet, I find nothing which leads me to think that the view which I have formed as to the construction of section 130

is incorrect. I hold on the point of law brought before the Court that until a legal personal representative has been constituted the Court has no power to make an order for the administration in bankruptcy of the deceased debtor's estate."

Rules must be read together with the relevant Ordinance, Attorney-General $v$ . • De Keyser's Royal Hotel Limited, (1920) A. C. 508, H. L.

By section 15 (c) of the Interpretation and General Clauses Ordinance, Cap. 1, "No subsidiary legislation shall be inconsistent with the provisions of any Ordinance", rule 253 therefore cannot be read as repealing or contradicting section 120 (2) of the Bankruptcy Ordinance. In my view, it is reconcilable but, if not, the rule must give way to the plain terms of the Ordinance: Ex parte David, (1872) L. R. 7 Ch. 529.

Referring now to B. C. 12 of 1952 In re Bentley, Ex parte Creditors, I observe that Rudd, J., when asked to make an order on a petition by creditors of the deceased debtor refused to do so until a legal personal representative of the deceased had been constituted. Rule 117 was cited but this could have had no effect as it dealt with service out of the jurisdiction merely. Rule 118 was also brought to his notice but this applies to the case where bankruptcy petition has been presented in the lifetime of the debtor who dies before service can be effected. In that case service may be ordered on the personal representative, not the legal personal representative it is to be noticed. He made an order for service on the widow of the deceased who was alleged to be the executrix named in the will of the deceased, but who had neither proved the will nor renounced probate and also upon the Public Trustee because it was alleged that, if the widow renounced probate, the Public Trustee had consented to act as administrator. There is no doubt that he was empowered to order service under the provisions of Rule 251. Service was effected upon the widow who took out letters of administration before the petition came on for hearing and an order was granted, unopposed.

According to the decision in In re Sleet (supra), it was competent to make an order on a petition once the widow had taken out letters of administration although service had been effected upon her before she obtained the grant. In In re Bentley (supra), it was also held competent, in identical circumstances, to make the order. Neither of these cases is an authority for the argument advanced that where no legal personal representative is constituted the defect can be cured by service on a personal representative not legally constituted and that an order can follow on the petition although no letters of administration have been granted and merely upon exhibition of a service. In my view, In re a Debtor (supra), cited, is conclusively against any such a construction.

1 am unable therefore to comprehend how the petitioners will benefit from the order for service craved upon the widow. She has already been served and she has, both in writing and in court, stated positively her intention not to apply for letters of administration.

Were the widow, as personal representative, to constitute herself as the legal personal representative the Court would thereafter be empowered to make order for administration in bankruptcy without further service. No affidavit as in $In$ re *Bentley* (supra) is exhibited alleging that the Public Trustee has agreed, failing the widow to administer the estate, even if such an allegation would be effective.

I propose therefore to make the same order made by Morton, J.

ORDER.—The petition is adjourned back into chambers to stand over until a legal personal representative should be constituted, and the costs to date to be costs in the petition.