BOLISETTI MAMAYYA Vs. BURAGADDA VENKATESWARALU AND ANRAND KOLLA KOTAYYA KUMMURI RAMAYYA RICE MILL COMPANY

JUDGEMENT

(1.) These two appeals have arisen out of an order of the District Judge, Guntur, adjudicating a father and two of his sons, styled respondents 1, 2, and 3, as insolvents. The petitioner in insolvency was a creditor of the father and may also be treated as the creditor of his three sons (Respondents 2, 3 and 4) for the purpose of these appeals. He applied for adjudicating the father and his major sons, the 2nd and 3 respondents as insolvents and did not pray that the minor 4 respondent should also be made an insolvent. He alleged in his petition vaguely that the " Respondents " transferred their immoveable properties under six documents, Exhibits A to F in September a November, 19I8 to their relations and friends, either nominally without consideration or with a view to fraudulently perfer the alienees who are their relations and friends and that therefore the " Respondents " have committed acts of insolvency within the meaning of Clauses (B) and (C) of Section 4 of the Provincial Insolvency Act III of 1907. As he prayed only for the respondent 1 to 3 to be adjudicated insolvents, I shall take it that the above allegation against " respondents " refers to respondents 1 to 3 alone and that respondents 1 to 3 alone are alleged to have transferred their immoveable properties and thus committed acts of insolvency. The learned District Judge adjudicated the first three respondents to be insolvents accordingly. Appeal No. 96 is preferred by the 5th respondent who is one of the three alienees mentioned in the application. Respondent 3 and 4 are the two appellants in the other appeal No. 138. It is admitted by the learned vakil for respondents 3 and 4 (in the Lower Court) who are the appellants in No. 138, that the inclusion of the 4 respondent as one of the appellants in that appeal was a mistake as he was not adjudicated an insolvent by the District Court and (as I have said before) even the applying creditor did not pray for the 4 respondent also being adjudicated an insolvent.

(2.) Section 5 of the Provincial Insolvency Act provides that an " Insolvency petition may be presented either by a creditor or by the debtor." Next Section 6 makes a distinction between the circumstances which entitled a debtor to present an application and the circumstances which entitle a creditor to make an application. Clause (3) of Section 6 details the conditions which enable the debtor to present the Insolvency Petition and Clause (4) the conditions similarly entitling the creditor. Further , between the contents of the. petitions respectively presented by a debtor or a creditor, a distinction is made in Section 11 Clauses (1) and (2). After the presentation of the petition, the Court is directed to fix a date for hearing the petition and on the date fixed for the hearing of the petition or an adjourned date, the Court is directed to require "proof" (that is, I take it from the person presenting the petition, whether debtor or creditor) that three requisites have been complied with, requisite (a) being that the creditor or the debtor, as the case may be, is entitled to present the petition and requisite (c) being that the debtor has committed the act of insolvency alleged against him. I take it that the requisite (c) refers only to the petition by a creditor and not to the petition by the debtor, for, so far as the debtor is concerned, it has been held that the presentation of the petition itselt by a debtor is an act of insolvency on his part and hence there is no meaning in requiring proof of requiste (c) in the case of an application made by the debtor himself.

(3.) The two reasons given by the District Judge for adjudicating three of the debtors as insolvents are (1) that the 1 respondent himself filed an independent petition to be declared an insolvent and (2) that he admitted he had alienated properties under six documents within three months before the date of the petition. I take it that reference to the period of three months before the date of the petition was made having in mind the provisions of Section 6, Clause 4(c) which says that the act of insolvency on which the petition is grounded must have occurred within three months before the presentation of the petition.