LAXMI BANK LTD Vs. RAMCHANDRA NARAYAN APTE

JUDGEMENT

(1.) The petitioner filed a petition under the Provincial Insolvency Act (III of 1907) shortly before Act V of 1920 was passed. The petition, therefore, would have to be proceeded with under the provisions of Act III of 1907.

(2.) Under Section 14(1) of the Act, on the day fixed for the hearing of the petition, or on any subsequent day to which the hearing may be adjourned, the Court shall require proof that the creditor or the debtor, as the case may be, is entitled to present the petition. Under Section 6 (3) the debtor shall not be entitled to present an insolvency petition unless (a) his debts amount to five hundred rupees; or (b) he has been arrested or imprisoned in execution of the decree of any Court for the payment of money. Under Section 11(1) every insolvency petition presented by a debtor shall contain a statement that the debtor is unable to pay his debts.

(3.) When the petition came on for hearing the following issues were raised: (1) whether the petitioner has made a true and full disclosure of his property, (2) whether his debts amount to Rs. 500, and (3) whether he is unable to pay them. Under Section 15(1) where the Court is not satisfied with the proof of the right to present the petition, or of the service of notice on the debtor, or of the alleged act of insolvency, or is satisfied by the debtor that he is able to pay his debts or that for any other sufficient cause no order ought to be made, the Court shall dismiss the petition. The issue whether the petitioner has made a true and full disclosure of his property would not be pertinent at the inquiry under Section 15, provided the petitioner has given the particulars required with regard to his property, as it is not until after the adjudication that it can be ascertained whether the petitioner has made a true and full disclosure. The trial Judge seems to have dismissed the petition on the very ground on which he ought to have entertained it, namely, the unsatisfactory conduct of the debtor with regard to his property, for it would only be by the administration of the estate in insolvency that the claims of the creditors could be properly protected. He also thought that the debtor had not satisfied the Court that he was unable to pay his debts, but we think that this finding was based on wrong grounds.