A GOPALAREDDY Vs. P RAGHAVA REDDY

JUDGEMENT

(1.) The petitioner in this C.R.P. is the petitioner debtor, in the Court below. The Insolvency Petition being I. P. 12/77 was filed against the debtor in connection with the promissory note dated 22-6-1975. The debtor filed the petition under Ss.4 and 5 of the Provincial Insolvency Act read with S.151 C.P.C. to dispose of I.P. 12/77 on the preliminary point about the maintainability of insolvency petition as the claim of the respondent on the basis of pronote dated 22-6-1975 is barred by limitation. This application was dismissed by the learned Subordinate Judge on the ground that this can be considered at the time of enquiry of the main petition. On appeal the learned District Judge disposed of the application on merits holding that the pronote is not barred by limitation when the I.P. was filed and as such the creditor can pursue the insolvency petition notwithstanding the bar of limitation during the pendency of the petition.

(2.) The learned counsel for the petitioner contended that there is no subsisting debt by reason of expiry of three years from the date of execution of the pronote and the debt is barred by limitation and the enforcement of such barred debt cannot be continued in insolvency proceedings. The learned counsel for the respondents contended that on the date when the view of doctrine of relation back provided in S.28(7) of the Provincial Insolvency Act, the proceedings relate back to the date of filing and the expiry of 3 years during the pendency of the insolvency proceeding, does not hinder the insolvency proceedings.

(3.) The relevant provisions touched upon are Ss.28(7) and 78(2) of the Provincial Insolvency Act are as follows:-