BAVA JEER CHETTI Vs. BAVA RANGASAWMI CHETTI

JUDGEMENT

(1.) This is an appeal by a creditor against an order of the District Court of Trichinopoly, adjudicating the debtor an insolvent on his own application. The appellant in his statement in the lower court stated that all the debts stated in the debtor s petition except his own were non-existing debts at the date of the petition, having been previously discharged, and that the petitioner did not include in his schedule a house worth Rs. 1,000 which belonged to him. The learned District Judge, in his order, states that it was admitted before him that the debts due by the applicant exceeded Rs. 500. He disallowed the contention of the appellant that the court was bound to decide whether the debts which were questioned by him were real or fictitious debts and also whether the petitioner was really unable to pay his debts as stated by him in his petition. The argument appears to have been based in the lower court on the provisions of Section 15 Sub-S. (1), of the Provincial Insolvency Act III of 1907. The District Judge was of opinion that it was only in an application by a creditor that the court, under Section 15 (1), has to be satisfied whether the debtor was able to pay his debts and whether, from any other sufficient cause, no order of adjudication should be made.

(2.) It is contended in appeal before us that the District Judge was bound to consider, before passing the order of adjudication, whether it had been satisfactorily proved that the debts were real and that the petitioner was unable to pay his debts. The argument is not rested before us on Section 15 (1). I agree with the District Judge, in his construction of that section, that, whether the petition is by the debtor or by a creditor, the court has, under Section 15, to be satisfied of the petitioner s right to present the petition. When the petition is by a creditor, it has to be further satisfied of the service of notice on the debtor and of the alleged act of insolvency. When these facts are proved, the debtor is entitled to show that an adjudication ought not to be made because he is able to pay his debt or that, for any other sufficient cause, no order of adjudication ought to be made. The section is evidently borrowed from Section 7 of the English Act of Bankruptcy 1883 (46 and 47 Vic, Chap. 52) and the words of Section 15 (1) are in themselves clear.

(3.) It is necessary now to refer to a few of the sections of the Act, as to what matters have to be decided by the court before an order of adjudication is passed. Section 5 enacts that if a debtor commits an act of insolvency, a petition for adjudication may be presented either by a creditor or by the debtor, subject to the conditions specified in the Act. Section 6 lays down those conditions. Clauses 1 and 2 do not call for any observations in this case. Clauses 3 and 4 lay down that the debtor and a creditor, respectively, shall not be entitled to present a petition unless certain conditions are fulfilled. Clause 3, relating to the debtor s application, requires that his debts should amount to Rs. 500 and that either he should have been arrested or imprisoned in execution of a decree or there should be a subsisting attachment of his property for the satisfaction of some decree. Clause 4, relating to the creditor s petition, enacts that the debt due to the petitioning creditor should amount to Rs. 500 and should be a liquidated sum; and further that the act of insolvency on which the petition is grounded should have occurred within three months before the presentation of the petition. As already observed, the debtor should have committed an act of insolvency before a petition could be filed either by him or by a creditor. Section 4 lays down in what cases an act of insolvency would be committed. It is unnecessary to refer to the various acts enunciated in the section. It is enough to refer to Clause (f) which says that if the debtor petitions to be adjudged an insolvent under the provisions of the Act that would amount to an act of insolvency. In this case, therefore, the petitioner had committed an act of insolvency and his debts amounted to Rs. 500. He was, therefore, entitled to present the petition.