- (1.)This petition is for adjudicating the respondent-insolvent on the ground that he has committed act of insolvency under Sec.9(2) of the Presidency Towns Insolvency Act.
(2.)The allegations in the petition may be summed up as follows:- In respect of the finance agreement entered into at Madras between the parties, the petitioner obtained a decree after contest against the respondent on 1-12-1983 in C.S. No.391 of 1981, on the file of this Court for a sum of Rs. 1,48,152-30 with interest. As the respondent did not settle the decree amount, the petitioner filed Insolveny Notice No.43 of 1986 on the file of this Court. However, the respondent filed Application No.78 of 1987 to set aside the said notice. But the said application was dismissed on 29-11-1988 without paying the amount decreed. The respondent is carrying on business at No.36, Meeran Sahib Street, Mount Road, Madras-2 for the last 10 years and the security created under the decree in favour of the petitioner over the area rights and collections of the Tamil picture Varumaiyin Niram Sivappu for the amount decreed is not available to the petitioner as the time under the distribution agreement between the respondent and the original producer must have been expired in the usual trade course. Therefore, the respondent has committed an act of insolvency under S.9(2) of the above said Act. 2A. The counter-statement filed by the respondent may be summed up as follows:The respondent is not liable to pay any amount to the petitioning creditor and the transaction is not a genuine transaction. The petitioning creditor, being a secured creditor, cannot file this Insolvency Petition unless he gives up the security or values the security at less than the amount due to him and states to that effect in the petition. Against the dismissal of Application No.78 of 1987, O.S.A. No.9 of 1989 was filed by the respondent and the said O.S.A. was dismissed on 18-1-1989 and the respondent is taking up the matter to the Supreme Court of India. The respondent has not committed any act of insolvency since the insolvency notice had not been issued in accordance with S.9(3)(d) of the Act. The respondent is a man of means and is carrying on film distribution business in Madras for the past several years and is assessed to income-tax and wealth-tax. He is also owner of a house bearing Door No.10, Chellammal Street, Shenoyunagar, Madras along with his wife, his share therein being 2/3rd. He is also possessed of 18 grounds of land in R.S. No.199(2) in Koyambedu village. The immovable properties possessed by the respondent are worth more than a crore of rupees. He is also a lessee of Kapali Theatre, Madras City, wherein the debtor is paying Rupees 20,000/- per month as lease amount. The petitioning creditor is well aware of the above properties and it can realise the amount by proceeding against any one of those properties. The Supreme Court has held in AIR 1972 SC 2127, that non-payment of the decree promptly by itself cannot be a ground to adjudicate a person as insolvent. The decree is defective. The Insolvency Petition is liable to be dismissed under S.13(6) of the Act as the debtor disputes the quantum of the amount claimed and is able to pay his debts.
(3.)The husband of the Managing Partner of the petitioning creditor-firm was examined as P.W. 1. Ex. P-2 is the certified copy of the above and decree and Ex. P-3 is the above referred to insolvency notice given. He also deposed that the time given to the distributor for dealing with the exploitation rights of any picture was 5 years from the date of release. He also deposed that on the date of filing the petition Rs. 2,47,170/- was due from the respondent and that further interest also had accrued. In the cross-examination of P.W. 1, an attempt was made to elicit from P. W. 1 that the respondent was owning properties.