THE AUDILAKSHMI VENKATESWARA IRON TRADERS, BY PARTNERS & ANOTHER Vs. MAYAVANTHI JHAMANDAS, SOLE PROPR., SETH JHAMANDAS CO., BY POWER OF ATTORNEY AGENT AND OTHERS

JUDGEMENT

(1.) This is an appeal against the judgment of Paul, J. who adjudicated the appellants as insolvents in I.P. No. 85 of 1972 mainly on two grounds. The first ground is that one of the insolvents was not found in the usual place of residence and business and that he secluded himself from the creditors, and the second ground is that the debtors suspended payment. The petitioning creditors complained that the debtors have committed acts of insolvency within the meaning of S. 9(d)(iii) and S. 9(g) of the Presidency Towns Insolvency Act. The facts which led to the filing of the petition may be briefly summarised thus: The petitioning creditors claimed that Audilakshmi Venkateswara Iron Traders represented by its partners, K. Subbarayalu Chetty and K. Radhakrishnan, and Sri Balaji & Co., represented by its partners K. Radhakrishnan and K. Balasubramaniam were indebted to them in the sum of Rs. 3,500/ - on the foot of a promissory note executed by the partners of the above firms and that before they came to Court with this insolvency petition another creditor attached the goods of the debtors and the debtors have removed a substantial portion of their stock in trade and they were arranging to sell both their business and other properties with intent to defeat and delay their creditors. The acts of insolvency are sought to be established by the petitioning creditors through their two witnesses examined as P.Ws. 1 and 2. We shall presently consider their testimony in detail. Their case is that P.W. 1 by himself or along with P.W. 2 approached the debtors and demanded payment and that the debtors expressed their unwillingness to pay the same and finding that the father of one of the debtors was not available in the business premises, they went to the residence of the father where admittedly the other sons were also residing (sons being the other debtors in the case) and finding that the father was not available at his residence they were satisfied that there was not only a seclusion of one of the partners from the business premises and from the normal place of residence but also an express uncanny expression by the debtors that they have suspended their payments. Paul, J. accepted the evidence of P.Ws. 1 and 2. He would not believe the father examined as R.W. 1 that he was not present on the date when P. Ws. 1 and 2 are said to have visited him at his residence since he was regularly going to the hospital having been struck by paralysis by then and that he did not at all meet P. Ws. 1 and 2 in the manner suggested by them. P.W. 2 denied the demand alleged to have been made either by P.W. 1 or by P. W. 2 and would say that though they have adjusted with some of the creditors by paying them a lesser amount than what was due to them no act of insolvency has been committed in so far as the petitioning creditors are concerned and that, therefore, the petition had to be dismissed. We shall now take up the evidence of P.Ws. 1 and 2 to find out whether the evidence in this case is sufficient to establish the acts of insolvency complained of. P.W.1, is the authorised agent of the petitioning creditors. He speaks to the debt due and owing by the debtors as is seen from Exhibit P -1, the promissory note. In answer to a question whether he demanded the amount under the promissory note, he answered in the affirmative. Thereafter he referred to certain suits filed by other creditors of the debtors which in our view is not relevant for the purpose of this case. On the allegation that the debtors gave notice of suspension of payment of debts he swore in the witness box as follows:

(2.) At this stage it is necessary to compare the two versions given by P. Ws. 1 and 2 Whilst P. W. 1 would say that he alone went to the business place on 24th August 1972 and that he went to the residential place on 25th August 1972, P. W. 2 would say that he went on the 24th evening to the residential premises and again on the 25th he along with P. W. 1 went to see the father. The question put in the witness box even in chief examination to P.W. 1, was "When you went to the business on 25th August 1962 who accompanied you". The answer by P. W. 1 was "the second petitioning creditor accompanied me". This is not even corroborated by P.W. 2. Whilst P.W. 1, is silent about his visit to the residential premises on the 24th of August, 1972, P.W. 2 would have it that he and P.W. 1 went twice to the residential premises once on the evening of the 24th and again on the 25th. These inconsistent and irreconcilable versions given by P. Ws. 1 and 2 make the weight of their testimony very light. Even apart from it, law requires in such circumstances corroboration of the attitude of the debtors as spoken to by interested witnesses like P. Ws. 1 and 2. That P.Ws. 1 and 2 are partisans and are undoubtedly interested witnesses cannot be disputed. Their testimony as demonstrated by us earlier is not the same in relation to the spoken facts. Apart from that it would be hazardous to imprint a badge of insolvency on a debtor merely basing it on the interested ipse dixit of a petitioning creditor who is anxious to adjudicate the debtors willy nilly so that he could secure his interest or compel him for adjustment. In the absence of any corroboration by independent testimony of disinterested persons, we are unable to accept the statement of P. Ws. 1 and 2 and rest our conclusion and find a case for the petitioning creditors for adjudicating the debtors as insolvents.

(3.) Even assuming that such a representation was made by the debtors as spoken to by P.W.1, or P.W. 2, the question is whether the said statements by themselves are sufficient to adjudicate the debtors insolvents. The stigma of insolvency on a debtor has to be borne by him if he cannot avoid it. But, if it is legally possible for him to oppose the imposition of such a stigma, he is always entitled to do so as the law permits him to do it. In O. S. A. No. 27 of 1958 (P. Ramanujiah v/s. Seth Uttamchand Chellaram and others) Dr. P. V. Rajamannar, Chief Justice and Ganapatia Pillai, J. dealing with a case almost similar to the one before us, after referring to the evidence stated thus: - -