M PBASAPPA Vs. PADASALE CHANNAPPAGOWDA

JUDGEMENT

(1.) The petitioner applied under Section 9 of the Mysore Insolvency Act to have one Padasale Channappagowda, now deceased, and who will hereafter be referred to as the respondent declared or adjudged an insolvent. He has since died on 25-5-1953 leaving behind him respondents 1(a), 1(b) and 1(c), his sons as his heirs and legal representatives. The application was made on 1-4-1950. The petitioner alleged that the respondent owed him Rs. 1500/- and interest on a pronote dated 1-2-48 and that in order to defraud him and other creditors he had purported to execute a nominal and fraudulent sale deed for Rs. 2000/- on 10-12-49 of almost all his immoveable properties in favour of his friend and relation, one Sivalingappa. The petitioner wanted that transfer to be annulled among all his creditors. The respondent pleaded that the pronote was unsupported by consideration and was obtained from him by fraud, his signature being taken to some blank papers and that he was therefore not liable to pay anything to the petitioner. He denied that the sale referred to in the application was nominal, collusive or fraudulent and pleaded that he had conveyed the properties to Sivalingappa as they really belonged to him. In his evidence he has stated that he sold them back to Sivalingapppa for Rs. 2000/- in pursuance of some earlier promise made to re convey it in favour of Sivalingappa's father. He pleaded that he had other assets and was able to pay his creditors and that the petition was belated having been filed more than 3 months after the date of the alienation though within three months of the date of registration of the sale deed.

(2.) The Subordinate Judge before whom the application was made, and the District Judge who heard the appeal against his order, have both found that the pronote in favour of the petitioner is supported by consideration and that the amount evidenced by it is due and owing to the plaintiff. They have not believed the story of the respondent that the pronote was taken from him under the circumstances pleaded or that the plaintiff is liable to pay any part of the debts due by the quandom firm of the petitioner and the respondent, and that under the terms of the agreement Ex. D dated 1-12-1948 the respondent alone was responsible to discharge these debts. They have also found that the sale, under Ex. C, of 5 acres 17 guntas of garden land and 19 acres and 5 guntas of dry land which was worth considerably very much more, viz., Rs. 25,000/- to Sivalingappa could not be a real transaction and that the reason given by the respondent for effecting the sale of such valuable properties for a low figure has not been made out. These findings cannot be challenged before me and have not been seriously questioned either.

(3.) The Courts below have however dismissed the application on two grounds, viz., that the same is barred by time having been filed beyond 3 months of the impugned sale deed, and that the respondent had sufficient assets to pay his debts. As regards the first point the Courts below have referred to and followed the cases reported in -- 'Ramananda Paul v. Pankaj Kumar', AIR 1938 Cal 417 (A) and -- 'Ratan Chand v. Smail', AIR 1933 Lah 821 (B). The learned District Judge before whom it was urged for the petitioner that the former rulings applied to cases of alienations which were sought to be set aside as being a fraudulent preference under Section 54 of the Insolvency Act has referred to Section 47 of the Registration Act which declares that the title of a person under a registered document operates, not from the date of registration, but from the date from which it would have commenced to operate if no registration thereof was required or made; and he was of the opinion that as the title of the alienee under Ex. C would date back to its date of execution and not the date of its registration the period of three months referred to in Section 9 would begin to run from that date. There is no decided case in Mysore on the point. But the preponderence of opinion among the other High Courts is that for an application by a creditor under Section 9 of the Insolvency Act, where the act of insolvency alleged against the debtor is the execution of a sale deed or other alienation which requires registration, the period of three months for presenting the petition for adjudication should be computed from the date of registration of the sale deed and not from the date of its execution.