G RAJU KRISHNA Vs. P RAMA DEVI

JUDGEMENT

(1.) RESPONDENTS 1 to 4 filed I. P. No. 77 of 2003 in the Court of Principal Senior Civil judge, Kurnool, against the appellant and respondents 5 and 6, under Sections 6, 9, 11 and 13 of the Provincial Insolvency Act (for short 'the Act), with a prayer to adjudge the 5th respondent, as insolvent. It was stated that the 5th respondent borrowed substantial amounts from respondents 1 to 4, and to avoid the payment, he has executed a collusive sale deed, dated 23. 08. 2003, in favour of the appellant herein, in respect of item (i) of B-Schedule and another sale deed in favour of the 6th respondent, in respect of item (ii) of B-Schedule. Reference was made to various proceedings. The petitioner and respondents 5 and 6 oppose the petition. Through its order, dated 21. 03. 2006, the trial court allowed the IP. and adjudged the 5th respondent, as insolvent. As a consequence, it appointed the Official Receiver to administer the schedule properties. The appellant and the 6th respondent filed a. S. No. 42 of 2006 in the Court of vi Additional District Judge, Kurnool. The appeal was dismissed through judgment, dated 17. 10. 2008. Hence, this Second appeal, under Section 100 C. P. C.

(2.) LEARNED counsel for the appellant submits that his client is a bona fide purchaser for valuable consideration, of an item of property, from the 5th respondent, and that even assuming that there existed circumstances to adjudge the 5th respondent as insolvent, the property purchased by the appellant ought not to have made the subject-matter of the proceedings. He also contends that the appellant was not aware of the indebtedness of his vendor and he cannot be penalized. It is further contended that respondents 1 to 4 did not even file a suit for recovery of the amount and the filing of IP. , was untenable in law.

(3.) HEARD Sri G. Raju Krishna, learned counsel for the appellant (sic.), and sri K. Somakonda Reddy, learned counsel for respondents 1 to 4.