W V ARUNACHALAM CHETTIAR Vs. KGKRISHNASWAMI IYER

JUDGEMENT

(1.) This petition arises out of the proceedings relating to the insolvency of K.G. Krishnaswami Iyer. Two of his creditors filed I.P. No. 12 of 1941 on 25 November, 1941, to adjudge him an insolvent. Subsequently, another creditor was impleaded as a supplemental petitioner because the two creditors who had filed the petition assigned their debts to a third person who made an attempt to join the insolvency proceedings as a petitioning creditor but did not pursue that course. The supplemental petitioner died subsequently and respondents 7 to 9 are his legal representatives. One of the creditors Arunachalam Chettiar was impleaded as a respondent and both he and the insolvent opposed the application. The Subordinate Judge of Madura found that there was no act of insolvency within three months before the date of the application and consequently dismissed the same. On appeal, the District Judge held that Krishnaswami Iyer did commit an act of insolvency and reversing the order of the Subordinate Judge adjudged him insolvent and made further consequential directions. This appeal by the creditor Arunachalam Chettiar above referred to is against the order of the learned District Judge adjudging K.G. Krishnaswami Iyer an insolvent.

(2.) In the petition three acts of insolvency were alleged but only one of them was pressed. That consisted in an intimation which was said to have been conveyed to the petitioning creditors in September 1941, that the insolvent had made an application to the Debt Conciliation Board whereby he must be deemed to have intimated to the creditors that he was suspending payment of all his debts. The debtor first opposed the application but subsequently filed a memorandum consenting to be adjudged an insolvent. Arunachalam Chettiar however continued to oppose the application.

(3.) On 21 July, 1941, Krishnaswami Iyer filed an application before the Debt Conciliation Board for the settlement of his debts. That application was filed under Section 4 of the Madras Debt Conciliation Act. As prescribed in Section 8 of the said Act, a date was fixed for the hearing of the application and notice thereof was sent both to the debtor and to the creditors. One such notice has been marked as Ex. P-5. It would appear that along with the notice a copy of the application presented before the Board was also sent. One such copy is Ex. P-4. In Ex. P-4 after setting out the debts, the debtor declared that he was unable to pay the debts stated in the petition. The application before the Debt Conciliation Board was dismissed on 17 November, 1941 and none of the advocates appearing in this case is in a position to state the reason why that application was rejected. I.P. No. 12 of 1941 itself was, as stated already, filed on 25 November, 1941, ten days after the dismissal of the debtor's application to the Debt Conciliation Board.