YENUMULA MALLUDORA Vs. PENIRI SEETHARATHNAM

JUDGEMENT

(1.) On the application of two creditors the appellant Yenumula Mallu Dora has been adjudged insolvent by the Subordinate Judge Kakinada and a receiving order has been passed against him. The respondents before us are one of the petitioning creditors and the legal representatives of the other petitioning creditor who died during these proceedings. The first petitioning creditor held a decree for money which he had obtained in O. S. 67 of 1949. He also held another money decree in O. S. 473 of 1948. The second petitioning creditor held a decree which she had obtained in O. S. 17 of 1955. The application was based upon three acts of insolvency which the appellant was stated to have committed and on the general facts that he was indebted to the tune of Rs. two lakhs, and was unable to pay his debts. The three acts of insolvency alleged against him were (a) evasion of arrest in execution of the money decree in O. S. 67 of 1949; (b) sale of some of his properties on September 26, 1956 in execution arising from O. S. 73 of 1952; and (c) sale of some of his properties on September 19, 1956 in execution of money decree in O. S. 9 of 1950. It was also alleged that he was fraudulently transferring properties in the name of his wife and brother-in-law and had suffered a collusive charge decree for maintenance in favour of his wife, to delay and defeat his creditors.

(2.) The Subordinate Judge, Kakinada did not accept the first two acts of insolvency. The evidence regarding evasion of arrest was not found convincing and the second act of insolvency was rejected because the sale of the property was in execution of a mortgage decree. In respect of the third act of insolvency the Subordinate Judge held that it satisfied Section 6 (e) of the Provincial Insolvency Act and an adjudication and a receiving order were justified in the case. An appeal was taken to the District Court at Rajahmundry (C. A. 41 of 1958) which was dismissed on October 15, 1959. A Revision Application filed under S. 75 of the Provincial Insolvency Act was dismissed by the High Court of Andhra Pradesh on March 14, 1963. The appellant, however, obtained special leave of this Court and has filed the present appeal against the order of the High Court.

(3.) The contention of the appellant was, and still is, that the third act of insolvency was not established as he had deposited, within one month of the sale, the entire decretal amount together with poundage and commission and the sale was set aside on his petition under Order 21 Rule 89 of the Code of Civil procedure. He contended, therefore, that as none of the acts of insolvency remained, the petition ought to have been dismissed as incompetent or he was entitled to have the petition dismissed, in any event, under S. 25 of the Provincial Insolvency Act which allows a creditor's petition to be dismissed on sufficient cause. He submitted that as the sale was set aside before the order of adjudication was made there existed sufficient cause for the dismissal of the creditors' petition. The Subordinate Judge relying upon Venkatakrishnayya vs. Malakondayya, AIR 1942 Mad 306, and on decisions of the Lahore and the Calcutta High Courts rejected the submission and made the order against the appellant. The District Judge, Rajahmundry agreed with the conclusion of the Subordinate Judge and the High Court rejected the petition for revision. In this appeal the same points are urged again for our acceptance. In our judgment the view of the law taken in this case by the Subordinate Judge and approved by the District Court is right and does not warrant any interference.