P K VENKATESWARAN Vs. R SHANMUGAM

JUDGEMENT

(1.) This a petition by three creditors to adjudge the respondent as insolvent under Ss.9(d)(ii) and (iii), 10, 11, 12 and 13 of the Presidency Towns Insolvency Act, hereinafter referred to as the Act.

(2.) According to the petitioners, the respondent borrowed from the 1st petitioner a sum of Rs. 15,000/- on 11-9-1980 bearing interest at 24% per annum; a sum of Rs. 15,000/- on 6-2-1982 bearing interest at 30% per annum, a sum of Rs. 5,000/- on 9-11-1983, bearing interest at 30% per annum and another sum of Rs. 7,000/- on 30-10-1983, bearing interest at 30% per annum; in all, the respondent has borrowed a sum of Rs. 42,000/- from the 1st petitioner. He has borrowed from the 2nd petitioner a sum of Rs. 1,500/- on 22-12-1982 with interest at 36% per annum; a sum of. Rs. 65,000/- on 1-10-1983 with interest at 36% per annum; a sum of Rs. 5,000/- on 19-10-1983, with interest at 42% per annum; a sum of Rs. 21,000/- on 9-1-1984, with interest at 12% per annum; a sum of Rs. 70,000/- on 25-5-1984, with interest at 36% per annum; and a sum of Rs. 20,000/- on 22-8-1984, with interest at 36% per annum; in all, he has borrowed from the 2nd petitioner a sum of Rs. 1,82,500/-. The respondent has borrowed from the 3rd petitioner a sum of Rs. 4,000/- on 6-6-1983, with interest at 36% per annum and another sum of Rs. 4,000/- on 10-1-1984 with interest at 12% per annum.

(3.) For some of the amounts borrowed from petitioners 1 and 2, the respondent has furnished collateral security of Door No. 5, Ayya Pillai Street and 70, C.N.K. Street, both situated in Triplicane, Madras-5. The rest of the amounts due to petitioners i and 2, and the entire amount due to the 3rd petitioner are not covered by security. All the loans have been advanced by the petitioners to the respondent through one A.V. Subbiah. Advocate. The respondent paid interest up to 30-9-1983 on two promissory notes executed by him, each for Rs. 15,000/- dated 11-9-1980 and 6-2-1982 respectively, on 5-10-1983, by duly making endorsement on the promissory notes. Thereafter, he suspended payment of interest. The respondent has not paid interest in respect of petitioners 2 and 3 and also in respect of the 1st petitioner on the rest of the promissory notes. Thus, on the date of the filing of the petition, a sum of Rupees Two Lakhs and odd is due to the petitioner's towards principal as detailed in the Annexure filed along with the petition.