RAMAYYAN Vs. OFFICIAL RECEIVER

JUDGEMENT

(1.) This is an appeal from an order annulling the adjudication order passed in I.P. No. 10 of 1120 on the file of the Trichur District Court. The petitioning creditor, who is the appellant before this Court, held a usufructuary mortgage for an amount of Rs. 8000/- over the debtors properties in the erstwhile Cochin State. The document in that behalf was executed by the debtors natural guardian, his mother. It would appear, the mother as guardian had borrowed another sum of Rs. 2000/- from the mortgagee on behalf of her minor son and executed a pro-note in respect thereof. This pro-note was dated 28.10.1119. Not long afterwards the minor came of age and on 13.8.1120 he assigned the mortgaged properties to the 1st respondent in this appeal for a consideration of Rs. 12,250/-. The appellants mortgage debt was reserved for payment by the vendee, but no provision was made for the debt due under the promissory note. Founding this sale in favour of the 1st respondent as an act of insolvency, the appellant on 6.11.1120 filed an application, since registered as I.P.No 10 of 1120, to get the debtor adjudged an insolvent. The debtors mother was also made a counter petitioner to that application and in due course the court adjudged the debtor an insolvent. This order was passed on 6.2.1121. Both counter petitioners remained ex parte in that proceeding. A vesting order in favour of the Official Receiver, Trichur, is embodied in the adjudication order. The adjudication order was soon followed by an application under S.53 and 54 of the Insolvency Act by the Official Receiver to annul the sale deed in favour of the 1st respondent. This application was laid on 26.5.1121. The 1st respondent in her turn filed the application giving rise to this appeal on 21.6.1121 to annul the adjudication order on the ground that the promissory note alleged to have been executed by the debtors mother in favour of the petitioning creditor was a bogus and fictitious one. The Official Receivers application and the petition to annul the adjudication order were heard together by the learned Additional District Judge, Trichur and he allowed the application to annul the adjudication order. The present appeal is directed against that order. Consequent on the annulment of the adjudication order the learned Judge dismissed the Official Receivers application under S.53 and 54 and the appeal therefrom is A.S. No. 64 of 1123 which was heard along with the present appeal. We are disposing of that appeal by a separate judgment.

(2.) A point was raised that the decision is rested on a ground not mentioned in the application, but we do not think that there is any substance in it. The application challenges the debt, whole stock and barrel and when the creditors eligibility to lay the application in insolvency is founded upon that debt it is for him to show that the debt was not only genuine, but also one for the nonpayment of which the debtor could have been personally proceeded against. The only question for our consideration therefore is whether the learned Judges view that the debtor was not personally liable for the debt due under the promissory note executed by his natural guardian is not right.

(3.) It was conceded by the learned Counsel for the appellant that at its inception the debt was not one for which the debtor had any personal liability. The appellants case however is that since the debtor came of age he had expressly undertaken personal liability and that therefore on the date of the petition in insolvency there was personal liability for the debtor. Hence according to the appellant the adjudication order was quite proper. However, one will look for in vain in the insolvency petition or the adjudication order for any mention that the debt was one for which the debtor had rendered himself personally liable. Even the appellants Counsel did not dispute this position, but he invited our attention to an affidavit the appellant filed in the insolvency proceeding in proof of the alleged act of insolvency wherein he said express mention was made of the facts and circumstances under which the debtor took upon himself personal liability for the debt. That affidavit is not placed on the record of the present proceeding but the learned Counsel for the appellant relies on a statement contained in the evidence given by his client in this proceeding that all that is contained in the affidavit filed to prove the act of insolvency is true. We are afraid that is a dubious method of leading evidence and we cannot look into the contents of the affidavit to find out what all it contains. The petition as mentioned earlier did not contain any allegation, which would go to show that the debtor was personally liable for the debt incurred by his mother during his minority. Nor does the order refer to any such facts. On the face of the petition it ought to have been dismissed in limine and we have no hesitation therefore in stating that this is a case which easily falls within the spirit and the letter of S.35.