S NEELA KANTA SARMA Vs. K GOVINDARAJULU

JUDGEMENT

(1.) Insolvent is the applicant This application is filed under S. 21 of the Presidency Towns Insolvency Act, for annulling the order of adjudication dated 6-10-1975 on the ground that the Petitioning creditor was a secured creditor, and when he had not complie with the requirements under S. 12 (2) of the Act, the order of adjudication secured by him itself was without jurisdiction, and therefore the present application is maintainable. In the supporting affidavit, insolvent states as follows: He was adjudged an insolvent on 6-10-1975, on a Petition filed by the first respondent herein, who is a secured creditor. Under Section 12 (2) of the Act, the Petitioning creditor shall state in his petition that he either relinquishes his security for the benefit of the creditors or give an estimate of the value of the security in which event alone, he would be entitled to present a petition under the 'Act and when the first respondent had not fulfilled any of the conditions mentioned in Section 12 (2) of the Act, the order secured by him, would not be binding on the applicant herein. As the applicant was not aware of the full facts earlier, he could not file the application for annulment and that he filed an application for discharge in Appln. No. 316 of 1979, which was dismissed on 1-2-1980. As he ought not to have been adjudicated as an insolvent, the present attempt made to bring to sale the property in which he had already released his life interest in favour 'of his wife in 1962, is without jurisdiction and therefore the sale of the property deserves to be set aside and the order of adjudication be annulled.

(2.) First 1-iespondent in his counter would state that the present application is an abuse of process of Court, that the petitions came to be filed because of the failure of the applicant to pay the monthly rent of Rs. 200 on and from1-7-1972, which formed part of the consolidated order of the High Court dated 18-4-1975 made in Applns. No. 1911 of1973 and 2311 of 1973. Since the applicant did not comply with the order Passed in the aforesaid applications, the first respondent herein filed Appln. No. 1 ' 775 of 1974 for executing the order for payment of rent in respect of the mortgage property, and it was granted by this Court by order dated20-8-1974.It is, thereafter, E. P. No. 9 of 1975 in 0. S. 18 of 1972 was filed for attach ment of moveables at premises No. 82Habibullah Road, and the order of at attachment was effected on 1-4-1975,which continued to be in force for more than 21 days which itself amounted to an act of insolvency. It is on this act ofinsolvency, I. P. No. 46 of 1975, came to be filed and by order dated 6-101975, the applicant herein was adjudged as an insolvent.

(3.) It is true that the first respondent Is holding a mortgage decree in C. S. No. 18 of 1972, with reference to which he has preferred his claim before the official Assignee which has been admited in a sum of Rs. 60,462-33. The applicant was fully aware of the nature of application filed, and he cannot plead that he is ignorant of the contents of the application, When he filed an application for discharge, he was fully aware of the circumstances under which the application had been filed. Having acquiesced in the proceedings, he cannot now turn round and plead that the order of adjudication was illegal. He had failed to file an appeal, therefore. that order of adjudication has become final. He cannot now challenge the same as one passed without jurisdicdiction. The claim that he has released his life interest in the property is untrue. No document of release was ever produced. The suit filed by his wife in 0 S. No. 5029 of 1976 in the City Civil Court, claiming title to the property was dismissed. His son had now filed 0. S. No. 4066 of 1980, for an injunction and claiming title to the property and all these go to show that the only aim of the applicant is to protract the proceedings and defeat the right of the first respondent to secure relief in insolvency Court.