KOTA SIVARAMA PRASADA RAO Vs. SHAIK MASTANVALI

JUDGEMENT

(1.) This civil miscellaneous second appeal arises out of judgment and decree dated 13.04.2010 in A.S. No. 165 of 2006 on the file of the learned Principal District Judge, Ongole, whereby he has confirmed the order dated 28.08.2006 in I.P. No. 10 of 2001 on the file of the learned Senior Civil Judge, Parchur. The appellant herein filed I.P. No. 10 of 2001 under Section 10 of the Provincial Insolvency Act, 1920 (for short 'the Act'), for his adjudication as an insolvent and for vesting his properties with the official receiver, Prakasam District, Ongole, for distribution among the general body of creditors. In the petition, the appellant has inter alia pleaded that he is a resident of Inkollu village, that he has carried on cloth business till the year 1998 in the name and style M/s. Sivaram Textiles, that in the said business, he has sustained huge losses, and that for carrying on the said business, he has incurred A-schedule debts to the tune of Rs. 19,11,400/-. He further pleaded that he possesses only B-schedule properties worth Rs. 2,86,000/-, that C-schedule decree was obtained by him against one J. Bapanaiah in O.S. No. 62 of 1997 on the file of the Senior Civil Judge, Parchur, for Rs. 70,000/-, that the said amount has not been realized so far, that his total assets are to the tune of Rs. 3,56,000/-, while his liabilities far too exceed his assets and that, therefore, he is not in a position to discharge all his debts. The appellant further pleaded that respondents 1 to 4 obtained money decrees, that respondents 5 and 6 filed suits against him, which are pending, that in pursuance of the decrees, respondent No. 1 filed E.P. No. 82 of 2001 in O.S. No. 170 of 1999 on the file of the Junior Civil Judge, Parchur, for his arrest under Order 21 Rule 37 of C.P.C., and also filed E.P. No. 83 of 2001 in O.S. No. 172 of 1999 for sale of his properties, and that the said execution petitions are pending.

(2.) Respondent No. 1 contested the LP,, by filing a counter-affidavit, which was duly adopted by respondents 5 and 69. It was pleaded that the appellant failed to render proper accounts with respect to the stock in business and disclose the details relating to his dealers, that he has a share in granite industry, which is not shown in the list of assets, besides having cash on hand suppressed by him, that he will be able to discharge the debts from out of his assets, whereas he has shown only 1/3rd share in the schedule properties, and that many of the debts shown by him are bogus and many others are time barred.

(3.) Respondent No. 6 filed a separate counter-affidavit, which was adopted by respondents 29, 65 and 66. The counter-affidavit has denied the plea of the appellant that he has suffered heavy losses in the business. It is also averred therein that the appellant has not shown all his properties in the B-schedule and that respondents 7 to 68 are fictitious creditors, who are close associates of the appellant.