AJIT INDIA PVT LTD Vs. RAGHAVA VEERA

JUDGEMENT

(1.) This is an application by the debtors in the insolvency Notice No.28 of 1983 to set aside the said insolvency Notice.

(2.) The averments in the affidavit are as follows :- The first debtor is a partnership firm and it ceased to do any business from the year 1977. Two insolvency petitions viz., I.P.No. 129 of 1976 and I.P.No. 66 of 1977, were filed to adjudicate the firm as insolvent. The firm has been adjudicated as insolvent along with its two partners, viz., second and third debtors in I.P.No. 129 of 1976. The order of adjudication was confirmed in the Appeal O.S.A.No. 80 of 1977. A further appeal to the Supreme Court in S.L.P. No. 2020 of 1978 has been admitted and is pending as a civil appeal in which all further proceedings have been stayed. The act of insolvency alleged in this application is under Ss.9(d)(iii) and 9(g) of the Presidency Towns Insolvency Act III of 1909, hereinafter referred to as the Act. After the adjudication by the Insolvency Court, the first debtor/firm had stopped doing business. In order to give a valid insolvency notice, the creditor must prove under S.9(2) of the Act that the debtor/firm was carrying on business either in person or through an Agent within the limits of the original jurisdiction of this Court and that such debtor/firm was carrying on business within a year before the presentation of the Insolvency notice. In this case, the notice of insolvency was presented on 22-8-1983. For six years prior to the date of notice the firm had not been doing business. The 2nd contention is that the second debtor viz., Raghava Reddy, has left India in 1978 and is now a permanent resident of U.S.A. He has not returned to India so far. Hence this Court has no jurisdiction under S.11(b) of the Act to adjudicate the second debtor as insolvent. Under the circumstances the respondent is only entitled to prove its claim in the prior insolvency proceedings and is not entitled to a fresh adjudication.

(3.) In the counter-affidavit the following contentions are raised :-