(dissenting).

I respectfully disagree and dissent.

Appellants insist that the Bankruptcy Act expressly directs that the appropriate schedules of the alleged bankrupt only be submitted after it is determined that the respondent is in fact a bankrupt within the meaning of the Act. Appellants cite as authority for this proposition the provisions of 11 U.S.C. § 25 (a)(8) and (9).

Section 25(a)(8) reads in pertinent part as follows:

Paragraph (9) of section 25, sub. a reads in pertinent part as follows:

Appellants note, with regard to paragraph 9, that a first meeting of creditors cannot be held less than ten days after adjudication.

On the basis of these two statutory provisions, appellants assert that the referee improperly ordered them to submit appropriate schedules prior to adjudication. Appellants contend that until they are adjudged bankrupt no invasion of the privacy of their business affairs is warranted.

I cannot agree with appellants’ construction of the Act, based as it is upon extractions from the Act of certain provisions to the exclusion of others which are of direct relevance. In particular, appellants disregard the express language of 11 U.S.C. § 21 (d), which notes the importance of discovery procedures prior to adjudication in assisting in the just determination of whether in fact one is a bankrupt. This provision reads as follows:

This provision vests in the bankruptcy court the power, in its discretion, to order the production of relevant documents prior to adjudication. The policy behind the provision is consistent with the general well-reasoned policy of the federal courts to encourage liberal use of pretrial discovery procedures. As noted by the court in In re Robert T. Cochran & Co., 44 F.2d 417 (S.D.N.Y.1930):

The legislative history of section 3(d) ( 11 U.S.C. § 21 (d)) reinforces appellees’ assertion that the bankruptcy court can compel submission of relevant documents prior to adjudication. The pertinent statement of the House Judiciary Committee, 75th Cong. 1st Sess., on H.R. 6439 (subsequently amended, reintroduced and reported as H.R. 8046), p. 7, was quoted in In re Shulund, 210 F.Supp. *781 195, 198-199 (D.Mont.1962), a case dealing with the identical questions presented by this appeal:

Contrary to appellants’ position, I find nothing in section 3(d) which conflicts in any manner with the provisions cited by appellants for the proposition that the pertinent statements must be filed after adjudication. Sections 7a (8) and (9) address themselves to an entirely different issue from that dealt with in section 3(d). The provisions cited by appellants state only that the pertinent statements must be- filed within the stated time so as to facilitate the administration of the bankrupt estate after adjudication. Section 3(d), on the other hand, seeks to facilitate the proceedings by discovering whether there should be an adjudication of bankrupcty in futuro. The referee is aided in this determination by being able, if he so wishes, to compel the production of relevant data, including lists of assets and liabilities, if not “schedules and forms.” I think this distinction in what must be prepared — a “list” plus “inspection,” visa-vis a “schedule and/or forms” — is a distinction without a difference; based at best on form and not substance. I believe the referee in the matter at bar acted well within his authority in making his order of September 10, 1963, requiring the appellants to file their schedules of assets and liabilities and statements of affairs prior to adjudication.

The second question raised by appellants relates to the propriety of a contempt penalty for failure to comply with the referee’s order. It is not required to be answered by the majority opinion. It should be answered, in my view of the case. Appellees cite section 41 of the Bankruptcy Act ( 11 U.S.C. § 69 ) as authority for the district court holding that the alleged bankrupt was in contempt for failure to produce pertinent schedules as ordered. This contempt provision of the Bankruptcy Act states that “a person shall not, in proceedings before a referee, * * * (3) neglect to produce, after having been ordered to do so, any pertinent document * * In the absence of any conflicting statutory matter, I agree that section 41 authorizes a contempt citation for failure to comply with the referee’s direction to produce documents.

Appellants urge, however, that appellees, in citing the general contempt provisions of section 41, fail to consider the specific statutory provision concerning production of documents prior to adjudication (section 3(d)), the same provision which appellees rely upon as authorization for pre-adjudication discovery procedures. As noted above, section 3(d) expressly states that a failure to produce pertinent schedules, as directed by the referee, shall result in the transfer of the burden of proof to the alleged *782 bankrupt on the question of solvency. The section provides:

The case of In re Shulund, supra, considered the relationship of section 3 (d) to the general penalty provisions of Rule 37 of the Federal Rules of Civil Procedure. That court ruled that section 3 (d) imposed an explicit sanction which must take precedence over the broad power of the bankruptcy court to hold a party in contempt for failure to comply with a lawful order. The court stated:

I cannot agree with the district court’s disposition in Shulund to read multiple penalty provisions as mutually exclusive sanctions. I must readily concede that section 3(d) expressly addresses itself to the specific consequences that attach to an alleged bankrupt’s refusal to comply with an order to produce documents. And it is a consequence that could not be created by an order punishing for contempt. This provision is indeed more precise in its application to the facts at hand than is the general contempt authorization contained in 11 U.S.C. § 69 . But no reason is stated by appellants, nor by the district court in Shulund, why the sanctions imposed by both cannot be applied. Section 3(d) clearly compels a shift of the burden of proof on the question of solvency to the alleged bankrupt who refuses to comply with the production order. But section 3(d) does not state that this is the sole penalty to be imposed on a party who refuses to heed an order of a district court. Nor does the contempt provision of 11 U.S.C. § 69 carve out an exception from its otherwise plenary application for the situation to which section 3(d) is addressed.

The referee in bankruptcy in the present controversy decreed that certain documents were necessary to facilitate the determination of whether respondent was in fact a statutory bankrupt. This disregard of the order of a duly-authorized arm of the judiciary offends the dignity of our judicial system and interferes with the expeditious resolution of matters pending in our overly-crowded courts. In the face of such an affront, I conclude that a contempt citation is a penalty available to the district court in the proper exercise of its discretionary powers. Moreover, as indicated above, the availability of this sanction in no way impedes the operation of section 3(d) which, by statutory mandate, shifts the burden of proof on the question of solvency to the noncomplying alleged bankrupt.

To my mind, the order of the district court should be affirmed.