Re: Amirali Meghji – the Debtor Bankruptcy Cause 1-D-69; 15/6/70: Makame, Ag. J.

Re: Amirali Meghji – the Debtor Bankruptcy Cause 1-D-69; 15/6/70: Makame, Ag. J.

This was an application by the Official Receiver for the approval of a Scheme of Composition submitted by the debtor, Amirali Meghji. The total proved indebtedness of the debtor was Shs. 311, 455/60, and it was proposed that the debtor should pay 40% of this. More than a three-quarter majority of the creditors and all the creditors, who attended a meeting of creditors, accepted the proposed Scheme. The Official Receiver, however, felt that though the proposed Scheme was reasonable and for the benefit of the general body of the creditors, the proposed two guarantors were not suitable security because they were themselves indebted to the debtor. It was, on behalf of the debtor, submitted that the Composition should be approved, and it was also pointed out that a substantial sum of Shs. 80,000/- which represented 75% of the total sum to be paid under the Scheme, had already been deposited with the Official Receiver. Of this sum Shs. 44,000/- remained to be paid. Of the two proposed guarantors one had already paid some Shs. 14,000/- and another one was a particularly sold business man

            Held: (1) “I find the Official Receiver’s contention that the fact that the creditors have accepted the Scheme should not carry too much weight correct. But it is my considered opinion that the unanimous acceptance of a proposed Composition by creditors must be a strong persuasive factor ….. The acceptance by creditor is not the only reason why the Scheme should be approved. It does no mean that it is not a good reason. Acceptance is one of the factors but not the only one. In the present matter the Composition proposed is well above the prescribed minimum of 25% and the money already deposited is a lot more than the 25& of the 40% proposed to be paid within thirty days from the date of approval. One of the proposed guarantors has also reasonably reduced his debt to the debtor, and he continues to pay by regular monthly instalments. I must also take into consideration the factors which seem to have led to the debtor’s unhappy reversal of fortune, which include ill health.” (2)Taking all these matters into consideration I find it reasonable and just in the circumstances, and in the best interests of everyone involved, that provided the financial interests of the Official Receiver are taken care of in full, the proposed Composition should be approved, and I hereby approve it”.