MURTAZA AND SONS Vs. NAZIR MOHAMMAD KHAN

JUDGEMENT

(1.) This is an appeal against the orders of the High Court of Mysore setting aside an order passed by the District Court adjudicating Respondents Nos. 2 to 6 insolvents under the Mysore Insolvency Act. The appeal is filed with special leave.

(2.) This Court has held in Pritam Singh vs. State, (1950) SCR 453 at page No. 459 :

(3.) The appellants filed an applications for adjudicating as insolvent Respondent No. 6 which is a partnership of which Respondents Nos. 1 to 5 were alleged to be partners. It was alleged in the application (1) that Respondents 1 to 6 had on February 17, 1962, executed a deed of simple mortgage in favour of the 7th Respondent for a sum of Rs. 50,000 which constituted an act of insolvency and also a fraudulent transfer made with intent to give the said creditor a preference over the general body of creditors and therefore, the mortgage was void under Section 54 of the Mysore Insolvency Act; (2) that on February 23, 1962 Respondents 1 to 6 made a transfer of their properties to the 7th Respondent under a deed of trust for the benefit of the creditors; the execution of the deed of trust itself constituted an act of insolvency; (3) that the respondents had departed from their place of business and had set up business at another place and that they were generally found absent from their dwelling house and thereby they had prevented all means of communication with them.