ALAMELUMANGATHAYARAMMAL Vs. TSBALUSAMI CHETTI

JUDGEMENT

(1.) This is an appeal from an order made by Jackson, J., annulling the adjudication of the appellant. The appellant filed an application to be declared insolvent stating that she was unable to pay her debts and that she owed a debt of over Rs. 500. It has now been found that her statement that she was unable to pay her debts was absolutely false and that her only reason for filing the application was to avoid being harassed by her creditor in execution, although she was well able to satisfy his debt. On these facts the adjudication was annulled; and curiously enough the petitioner now asks the Court again to declare her an insolvent, not because she is really insolvent, but merely to evade payment of a debt and apparently also in order that she may retain the stigma of insolvency. It is difficult to understand her conduct, but she has chosen to adopt this somewhat discreditable course and the matter must be dealt with in accordance with the law.

(2.) The first objection taken by the appellant is that the creditor's petition to annul the adjudication was put in too late by reason of Rule 69, Insolvency Rules, which provides that such applications shall be made within ten days of the service of notice or such further time as may be allowed by the Court. Admittedly this application was not made within ten days, but the section gives very wide discretion to the Court to extend the time, or rather to allow the application to be filed within such further time as it thinks reasonable, and the learned Judge has allowed this application to be so filed. No objection can be taken to this procedure, and this objection must, therefore, be disallowed.

(3.) Coming to the merits, it is urged that inasmuch as petitioner has committed an act of insolvency by filing her petition and as her debts exceed Rs. 500 the Court is bound to make an order of adjudication and that order cannot be annulled and that any misconduct of hers must be dealt with only at the time of discharge; and reliance is placed on a case reported in Chhatrapat Singh Dugar V/s. Kharag Singh Lachmiram A.I.R. 1916 P.C. 64. That decision only lays down that when a debtor applies for adjudication the Court has only to be satisfied that the debtor is entitled under the Act to an adjudication and any question of misconduct must be left to be dealt with at the time of discharge. That, however, does not dispose of the question before us which is whether the Court should have made an order of adjudication, for under Section 21, Presidency Towns Insolvency Act, where in the opinion of the Court a debtor ought not to have been adjudged insolvent the Court may annul the adjudication. In this case it has been held that the appellant has been guilty of an abuse of the process of Court in coming forward and saying falsely that she was unable to pay her debts. This is a question which goes to the root of the insolvency law for it is only in cases of inability to pay that the insolvency law is applicable: The argument for the appellant is that so long as she makes a statement that she is unable to pay her debts, whether it is true or false, she is entitled to an order provided that she is otherwise entitled to an adjudication order.