KANHAIYALAL Vs. (FIRM) SADASHIV RAO GANPAT RAO

JUDGEMENT

(1.) 1. The non-applicants made an application Under Section 9, Provincial Insolvency Act, for the adjudication of the applicants as insolvents on the ground that they had committed an act of insolvency by suspending payments and executing a mortgage on 1st September 1931. The application was made on 19th February 1932, and the only point to be decided in this application for revision is whether the act of insolvency occurred within three months of the presentation of the petition. The mortgage was executed, as already stated, on 1st September 1931, but was not registered until 23rd December 1931. The application was made on 19th February 1932. The lower Court has held that for the purposes of Section 9(1)(c) three months should be calculated from the date of registration and not from the date of execution of the document. This finding is contested now by the applicants.

(2.) MUCH argument was put forward by learned counsel who appeared for the applicants that a deed which required registration was complete upon execution and was not incomplete until registration. In this connexion a reference was made to Venkatsubba Shrinivas v. Subba Rama AIR 1928 PC 86, Kalyanasundaram Pillai v. Karuppa Mooppanar AIR 1927 PC 42 and Nabadweepchandra Das v. Lokenath Ray AIR 1933 Cal 212. It has no doubt been held in these cases that a deed cannot be revoked after execution and before registration, but that is not the point in the present case. The mortgage deed executed by the applicants, was no doubt complete and valid as against them from the time of execution, but there is nothing to show that the non-applicants had any notice of the deed, and in fact they almost certainly had not. The only notice they could have of the execution of the deed was registration, and it would seem that in the present case registration was purposely delayed with intention of defeating the claims of the non-applicants. It may here also be noted that not only was registration delayed, but that registration was effected on 23rd December, the last working day before the Christmas holidays, so that really it would be difficult for the non-applicants to get notice of the deed before 2nd January 1932.

(3.) THE learned, counsel for the applicant referred to the decision in Gangee Premjee and Co. v. O.L.K.K.N. Firm Colombo AIR 1932 Mad 352, where it has been held that there is a distinction between a petition and an application and that Section 78, Provincial Insolvency Act does not apply to a petition of a creditor Under Section 9, and therefore Sections 5 and 12, Lim. Act will not be applicable to such petitions. I do not however think that the decision is in point, because there is no question here of applying the provisions of Section 5 or Section 12, Lim. Act: the only question to be decided is the starting: point of limitation for the purpose of calculating the three months prescribed by Section 9(1)(c) of the Act. For reasons stated above, I hold that the starting point of limitation is the date of registration of the deed of transfer, and not the date of execution. I therefore uphold the order of the Court below and dismiss the application with costs. I fix pleader's fees at Rs. 50.