GULAB CHAND PRASAD Vs. LACHUMAN SAH

JUDGEMENT

(1.) These are five miscellaneous appeals which have been heard together and this judgment will govern them all.

(2.) I may first state the facts so far as they are relevant for these five appeals. On 24-4-1947, one Lachuman Sah filed an application before the District Judge of Saran for being adjudged an insolvent. In that application Lachuman Sah stated that his debts amounted to Rs. 2,00,000/- and odd and that he was unable to pay his debts. This application was registered as Case No. 2 of 1947. The application was admitted and notices were seived on the creditors. Later on, as a result of an agreement between Lachuman Sah and some of his creditors, Lachuman Sah withdrew his application on 19-7-1947. Thereafter he executed a series of transfers in respect of some of his properties in favour of certain creditors, between dates 22-7-1947, and 15-9-1947. A considerable part of Lachuman Sah's debts was satisfied by means of these transfers. Among the creditors whose debts were not satisfied was one Chhotu Lal. On 6-9-1947, Chhotu Lal filed an application for adjudging Lachuman Sah, his sons and grandsons, who were members of a joint family and who carried on a business in the name and style of Mangni Sah Lachuman Ram, as insolvents. In this application Chhotu Lal stated that the debts of the firm of Lachuman Sah amounted to about Rs. 1,98,000/-, out of which the firm owed Chhotu Lal the sum of, Rs. 17,500/- on the basis of certain 'hundis'. Chhotu Lal alleged that the firm of Lachuman Sah had committed various acts of insolvency which were detailed in para. 9 of the petition, The two particular acts of insolvency which were specially urged were the sales of certain properties in favour of Mt. Gango Kuer and Kapildeo Prasad by means of two sale deeds dated 22-7-1947, and 23-7-1947. It was alleged that with the intent to defeat and defraud other creditors Lachuman Sah had within three months from the date of the filing of the application made the aforesaid two transfers. According to Chhotu Lal, the assets of the firm of Lachuman Sah amounted to Rs. 32,385/-only. The application of Chhotu Lal was admitted as Case No. 4 of 1947. A few days after Chhotu Lal had filed his application, Lachuman Sah himself presented an application for being declared an insolvent. In his application Lachuman Sah stated that his debts amounted to Rs. 79,547/- and odd and that he had assets of the value of Rs. 58,340/-, Lachuman Sah said that he was unable to pay his debts and should, therefore, be declared an insolvent. The application of Lachuman Sah was numbered as Case No. 5 of 1947.

(3.) The creditors in favour of whom Lachuman Sah had made the transfers between dates 22-7-1947 and 15-9-1947, were ranged as opposite party objectors in the application of Chhotu Lal. The case of these objectors was that the transfers made in their favour were genuine and valid, the firm of Lachuman Sah owed only Rs. 3,400/- to Chhotu Lal, and after the transfers made in favour of these objectors Lachuman Sah was well able to pay his debts and Lachuman Sah had committed no acts of insolvency within the meaning of Clauses (b) and (c) of Section 6, Provincial Insolvency Act.