MOHAMMED SIDDIQUE AND CO Vs. GHANSHAMDAS

JUDGEMENT

(1.) THIS is an appeal under Clause 15 of the Letters Patent read with O.36, Rule 10 of the Original Side Rules and Sec.8(2)(b) of the Presidency Towns Insolvency-Act, 1909 against the judgment dated 29.5.1990 passed by Janarthanam,!. in the Insolvency Jurisdiction of this Court adjudicating the appellants as insolvents and ordering that all assets and effects of the appellants vest in the Official Assignee of this Court for administration.

(2.) IT appears that the first respondent loaned Rs.40,000 to the appellants on execution of a promissory note in his favour. Since the appellants did not honour their due by discharging the loan, the said respondent filed a civil suit in the Court of the 5th Assistant Judge, City Civil Court, Madras for recovery of the said amount. The suit after due prosecution was decreed with costs. Even thereafter the appellants did not pay any amount and consequently the first respondent issued In- 'solvency Notice No.47/86 calling upon them to pay the amount due under the decree within thirty days from the date of receipt of the notice and also intimating his intention to take steps against them under Sec.9(2) of the Act for their failure to comply with the demand. The notice could not be personally served on the appellants and was consequently published in a local daily newspaper. Even after the publication of the notice the appellants did not make any payment towards the decree. The first respondent/ petitioning creditor thereafter filed the Insolvency Petition before this Court praying for the adjudication of the appellants as insolvents. The appellants challenge the validity of the insolvency notice and questioned by filing their common counter before the learned Judge. The parties also examined witnesses. On a consideration of the materials so placed by the parties the learned Judge held that the appellants are unable to discharge their debt which amounts to an act of insolvency under Sec.9(2) of the Act. This Court, therefore, adjudicated the appellants as insolvents. IT is this judgment and order which is impugned in this appeal.

(3.) IT appears that the appellants have settled the claim of the first respondent/ creditor during the pendency of this appeal and that is why no one appears in this Court to represent him in spile of notice. The Official Assignee, however, has appeared and submitted that there was no illegality in the impugned order and hence the appeal deserves to be dismissed.