SIVASANKARA MEHTA Vs. BAGWANDAS ARJUNLAL BANKERS

JUDGEMENT

(1.) THIS appeal filed under the Letters Patent is directed against the order of ramamurti, J. , in I. P. No. 42 of 1965, a petition filed by a creditor to adjudge one sivasankara Mehta, the appellant, an insolvent. The ground relied on by the petitioning creditor is a brief one. He alleged that the debtor's properties were attached in execution of a decree passed by the City Civil Court, Madras for payment of money, that the attachment remained subsisting for a period of more than 21 days, and that consequently this amounted to an act of insolvency, as denned in Section 9 (e) of the Presidency-Towns Insolvency Act. That section is in the following terms-

(2.) CERTAIN dates are important for the purpose of a appreciating the points in controversy. The petitioning creditor attached before judgment the moveable properties of the appellant in a suit filed by him in O. S. No. 2783 of 1964 on the file of the City Civil Court, Madras. The suit was decreed for a sum of Rs. 4550/-on 20-11-1964 and the attachment before judgment was made absolute on the same date. On 19-3-1965, the petitioning creditor, the decree-holder in the above suit, filed an execution petition in the City Civil Court, Madras, praying for the sale of the moveables of the appellant, which were the subject-matter of the attachment mentioned earlier. The execution petition was ordered on 31-3-1965 and thereafter it was adjourned for filing sale papers. The present insolvency petition was filed in 7-7-1965. The learned Judge was of the opinion that the act of insolvency within the meaning of Section 9 (e) of the Act was completed when 21 days elapsed from 19-3-1965, the date of the filing of the execution petition and that, therefore, the insolvency petition filed on 7-7-1965 was within three months thereafter and therefore was in time. Alternatively it was contended by the learned counsel for the petitioning-creditor before the learned Judge, that time should be reckoned for the purpose of limitation from 31-3-1965 when notice of the execution petition for the purpose of proceeding with the sale of moveables was served on the Registrar of the City Civil Court, Madras and from that point of view the petition was in tune. But the learned Judge did not consider this alternative aspect, and gave the opinion that even if the date of the filing of the execution petition on 19-3-1965 is taken into account, calculating 21 days thereafter, the insolvency petition must be considered to be well within time.

(3.) IN this appeal, learned Counsel for the appellant, Mr. Sivaramakrishniah, contended that on the principle laid down by several decisions of Courts in India, the act of insolvency enunciated in Section 9 (e) of the Act is not a continuing one and that the moment 21 days elapse from the date of the attachment of the property of an insolvent in execution of a decree for money, the act of insolvency becomes complete. Thereafter the three months period of time has to be counted for the purpose of limitation under Section 12 (b ). The authorities relied on in this connection are in Re, Beeston, 1899-1 QB 626, which was followed in Mt. Anupama Devi v. Gurudas Chaterji, ILR 57 Cal 1274= (AIR 1931 Cal 246) and several other decisions. Of these decisions Mulla in his Law of Insolvency in India, 2nd Edn. at page 124 observed-