K JEWAN JYOTI Vs. FATEH CHAND BRIJ LAL

JUDGEMENT

(1.) Ms. K. Jewawn Jyoti has filed the present appeal and it has been directed against the judgment dated 5.1.1988 passed by the Additional District Judge, Ferozepur, who dismissed the appeal of M/s Ditto Mall Barkat Ram, K. Jewan Jyoti and Mast Ram, Advocate, under Section 75 of the Provincial Insolvency Act, 1929 (hereinafter called 'the Act'), by affirming the order dated 15.6.1985 passed by the Insolvency Judge, Ferozpur.

(2.) The brief facts of the case are that M/s Ditto Mall Barkat Ram and others filed a petition under Sections 6, 7, 9 and 13(2) of the Act against M/s Fetah Chand Brij Lal and its partners, respondents 1 to 5, on the allegations that the respondent-firm took loan of Rs. 5,500/- from the petitioner No. 1. Respondent No. 1 also took a loan of Rs. 5,500/-from M/s Barkat Ram and Company and other creditors. The names of 10 others creditors have also been mentioned in para-2 of the petition. Further it is pleaded by the petitioners that during the past few months before the presentation of the petition which was instituted somewhere in the year 1984, the respondents had started evading the payments not only of the principal amounts but even of the interest due on those amounts and during the past six months, all the investment brokers pleaded inability even to procure cheques for interest due on the amount. It was also alleged that with intent to defeat and delay their creditors, the respondents have closed their business by handing over the Sheller and Saila Plant, etc. to M/s Jagdish Lai Rattan Lal of Ferozepur City and they have also left their dwelling house and in the first week of January, 1981, Krishan Lal, partner of respondent No. 1, told the petitioners that the respondents have suspended all the payments and were contacting some of their Commission Agents for taking over their Sheller and Saila Plant etc. According to the information received and believed to be true, the respondents owned properties i.e. Sheller, Expeller, Flour Mill etc. along with land and truck. With the above allegations, the petitioners prayed that the respondents be summoned and they be directed to disclose their assets and liabilities. They be adjudged insolvent and their assets may be ordered to be realised and distributed among the creditors.

(3.) The petition was contested by the respondents who stated that no act of insolvency was committed by them; that the respondent-firm never made transfer of its property or any property to defeat or delay the creditor; none of the partners had at any time secluded themselves so as to deprive the creditors of the means of communication and even no property of the respondents was sold in execution of the decree for payment of money. It was further pleaded by the respondents they could not be adjudged as insolvent as they had never given notice to any of the creditors that they had suspended or about to suspend the payment of their debts. None of the partners of the firm was ever imprisoned in execution of any decree of the Court for payment of the money. The respondents are owners of the property more than 15 lacs whereas the debt was of less amount which could be or would be paid. They only arranged to hand over the Saila Plant for Rs. 50,000/- which amount would be paid to the creditors. They were running the rice plant as usual in the season. They had been always ready to pay the debt amount but due to rainfall on the paddy and due to the calamity, they could not sell the rice. It was alleged that they had not closed their business. Saila Plant was handed over on lease for a period of one year and this was no act of insolvency. The respondents are residing in the same house. Respondent Krishan Lal never met the petitioners as alleged. The respondents also took the plea that the money of the petitioners was settled to be paid after the receipt of the amount from the F.C.I. With the above defence, the respondents prayed for the dismissal of the petition.