SHAANA THIRUCHELVAM Vs. K S VARKEY

JUDGEMENT

(1.) THE 3rd respondent in I. P. No. 40 of 1990 is the appellant in this appeal. We will refer to the parties excepting the appellant, as per their ranks in the Insolvency Petition itself for convenience. This appeal has been preferred against the order dated5. 8. 1991 in I. P. No. 40of 1990 adjudicating the respondents therein including the appellant herein as insolvents.

(2.) THE Insolvency Petition was filed by the respondents 1 and 2 herein under Secs. 9 and 10 to 12 of the Presidency Towns Insolvency Act. THE 1st respondent in the Insolvency Petition is a partnership firm known as fellowship Trading Corporation. THE 2nd respondent is the Managing Partner of the 1 st respondent and the 3rd respondent is the other partner. THE case of the petitioners in the Insolvency Petition was that the firm collected huge amounts by way of deposits, etc. , from the public and the 2nd respondent in the insolvency Petition as managing partner deliberately diverted the funds with fraudulent intention of cheating the depositors purchased properties in the names of his children. THE 1st petitioner deposited Rs. 5,000 on 7. 8. 1986 and the same matured on 7. 8. 1989. Similarly, the 2nd petitioner deposited Rs. 5,000 on 9. 8. 1986 and the same matured on 7. 8. 1989. Though the deposits matured for payments, the respondents in the Insolvency Petition failed and neglected to pay the same. THE further case of the petitioners is that the respondents in the Insolvency Petition were heavily indebted to several depositors amounting to several crores of rupees. Since the respondents were not in a position to pay the depositors, the depositors formed a registered association known as consumers protection social and welfare association to protect the interest of the depositors. THE office bearers of the said association were invited to attend a meeting at the residence of Mr. P. C. Kurian, advocate on 3. 3. 1990, and the said office bearers of the association were informed that the 1st respondent (firm) suspended payments to all its creditors, and in another meeting held on 13. 3. 1990 at the residence of Mr. P. C. Kurian, advocate, the 2nd respondent, managing partner of the 1st respondent (firm) informed suspension of payment to all the creditors as there were financial difficulties. He offered to handover the management of the firm to the association. But it was not done so. Hence, according to the petitioners 1 and 2, the respondents committed an act of insolvency within the meaning of Sec. 9 (g) of the Act. That apart from 6. 2. 1990 the business premises of the 1st respondent was closed and the forwarding address was not at all mentioned anywhere on the premises. THE 1 st petitioner visited the residence of respondents 2 and 3 on 8. 3. 1990, 15. 3. 1990, 21. 3. 1990 and 22. 3. 1990 but they were not available at all on any of the occasions. THErefore the respondents 2 and 3 departed from their dwelling house with intention to defeat and defraud the creditors. THErefore, they have rendered themselves liable to be adjudicated as insolvents under Sec. 9 (d) (ii)and (iii) of the Presidency Towns Insolvency Act. In the abovesaid circumstances, the petitioners 1 and 2 filed the I. P. No. 40 of 1990 for adjudication.

(3.) WITH reference to the other contention that the respondents 2 and 3 secluded from the dwelling place and were not available, we have to hold here again, that the case of the petitioners is acceptable. P. W. I has stated that on 8. 3. 1990, 15. 3. 1990, 21. 3. 1990 and 22. 3. 1990 he visited no. 7, Beach Road, Harsha Apartments, Kalakshetra Colony, Madras-90 and on all those occasions the respondents 2 and 3 were out of station. In the petition i. P. No. 40 of 1990, in para 15, it is clearly stated that P. E. Chacko and K. S. Varkey visited the residence of respondents 2 and 3 on 8. 3. 1990, 15. 3. 1990, 21. 3. 1990 and 22. 3. 1990, but they were not available. In the cross-examination also when this allegation was put to R. W. 1, she has not denied these facts. Further in the cross-examination she chose to admit that she was present in harsha Apartments from 1. 5. 1989 to 27. 2. 1990. Hence, this aspect also has been proved by the petitioners.