RAMU CHETTIAR Vs. B R GOVINDARAJULU

JUDGEMENT

(1.) This revision is directed against the order passed by the learned Principal District Judge, Salem, reversing the order passed by the learned Second Additional Subordinate Judge, Salem.

(2.) The facts which are necessary for understanding the points involved in the revision can be shortly stated as follows : One late V. Sundaram filed a petition against the petitioner herein for adjudging him as insolvent in I.P. No. 67 of 1974 on the allegation that he had executed a promissory note in his favour on 6-1-1974, and subsequently in order to defraud his debt and other creditors, he executed a sale deed on 19-3-1974, in favour of his nominees in respect of his properties and also in view of his unequivocal declaration of his inability to pay the debts and suspension of the payment of the debts. The petitioning creditor died on 14-9-1975 and his legal representatives came on record as petitioners 2 to 9 in I.P. 67 of 1974. The insolvency petition originally was allowed on 18-9-1976 and as per the order of remand passed by the appellate court, the matter was remanded for fresh disposal and the same was allowed to be dismissed for default on 12-7-1978 and again it was restored to file on 4-8-1978. Subsequently, the advocate for the legal representatives reported no instructions in the insolvency petition on 14-4-1981, and thereafter, they did not take any interest. The first respondent herein, who is the petitioner before the lower court, had advanced a sum of Rs. 12000 to the same debtor on 11-6-1974, and he has filed an application under S.16 of the Provincial Insolvency Act, on 26-9-1978 for substituting himself in the place of the petitioning creditor in the main petition itself. It was alleged in the petition that the legal representatives are not evincing any interest in prosecuting the insolvency petition and by virtue of an arrangement, the 8th respondent debtor has filed a lodgment schedule for depositing the amount due to the legal representatives of the petitioning creditor and that they are not diligently prosecuting the insolvency petition. The said application was resisted by the 8th respondent-debtor and he contended that the promissory note executed in favour of the first respondent herein, who was the petitioner in I. A. 383 of 1978, is subsequent to the alleged act of insolvency, and hence, he is not entitled to take advantage of the said act of insolvency and consequently he could not get himself substituted as a petitioner. The other respondents have filed a counter stating that they would abide by the orders passed by the Court.

(3.) The learned Subordinate Judge dismissed the application. On appeal, the learned District Judge reversed the said finding and allowed the application. Hence this revision.