BHUPATHIRAJU SATYANARAYANA RAJU Vs. SANKU CHINA PULLA RAO

JUDGEMENT

(1.) The Civil Revision Petition is directed against the decree and judgment dated 05-07-2006 in A.S.No.45 of 2004 passed by the learned Principal District Judge, West Godavari, Eluru, whereby and whereunder the appeal filed under Section 75 (1) of the Provincial Insolvency Act, 1920-the Provincial Insolvency (Andhra Pradesh Extension and Amendment) Act, 1965 (for short "the Act") by the revision petitioners, was dismissed.

(2.) The revision petitioners, who are creditors, filed I.P.No.37 of 1999 under Section 9 (1) of the Act before the Senior Civil Judge, Tadepalligudem, for declaring respondents 1 and 2 as insolvents, treating the sale deed in favour of the 3rd respondent is an act of insolvency and in fraud of creditors and also a fraudulent transfer and to cancel the sale deed dated 24-09-1999 executed by the respondents 1 and 2 in favour of 3rd respondent. It is alleged that the respondents 1 to 3 are closely related to each other and further alleged that the respondents 1 and 2 borrowed an amount of Rs.90,000/- for their family protection and agricultural investment and executed a promissory note agreeing to repay the same with interest at 24% p.a. and that the respondents paid Rs.59,400/- to the 1st petitioner and the same is endorsed on the reverse of the promissory note dated 10-09-1999 and the balance of the same is due to the 1st petitioner. They also borrowed Rs.60,000/- from the 2nd petitioner on 10-09- 1999 for the same purpose and executed a promissory note agreeing to repay the same with same rate of interest. They also borrowed Rs.40,000/- on 07-02-1999 from the 3rd petitioner for some purpose and executed a promissory note and apart from these three debts, the respondents 1 and 2 have some other debts to others. Thus, they are heavily indebted and the property possessed by them is not sufficient to discharge their debts. It is further alleged that while the things stood thus, the respondents 1 and 2 created sale deed dated 24-09-1999 in favour of 3rd respondent for Rs.1,03,000/- and the said document is a collusive, fraudulent and without consideration and so, it is an act of insolvency and the petitioners are entitled for the relief. Respondents 1 and 2 remained ex parte and the 3rd respondent filed counter denying all the allegations in the petition and contending that the respondents 1 and 2 borrowed amount from the petitioners and executed the documents and further payments are all false and the petitioners are put to strict proof of the same. It is alleged that the pronotes are all nothing but concocted and forged one for the purpose of this petition. It is further alleged that the 3rd respondent purchased scheduled property for a valuable consideration of Rs.1,03,000/- and the same has been in his possession and enjoyment and he also filed a suit before the court and also criminal cases before S.H.O., Davileswaram P.S. and the petitioners and respondents 1 and 2 colluded together and got filed this petition to knock away the suit property. There are some other properties to the respondents and the same was also suppressed and so this petition is not maintainable and requested the court to dismiss the petition with costs.

(3.) Before the Court of Senior Civil Judge, Tadepalligudem, PWs.1 to 6 were examined and Exs.A.1 to A.9 were marked on behalf of the petitioners and DW.1 was examined and Exs.B.1 to B.4 were marked on behalf of the respondents. The learned Senior Civil Judge, Tadepalligudem through order dated 15-12-2003 dismissed the petition against which the revision petitioners filed A.S.No.45 of 2004 before the Principal District Judge, West Godavari, Eluru. The learned Principal District Judge also dismissed the appeal by judgment dated 05-07-2006. Assailing the said judgment, the present revision petition has been filed.