BHASKAR BHATTACHARYA, J. - (1.) This appeal is at the instance of a debtor and is directed against the order dated June 9, 2006 passed by a learned single Judge of this Court thereby allowing an application under Section 9(2) of the Presidency Town Insolvency Act, 1909 (hereinafter referred to as the Act) and adjudicating the present appellant as an insolvent.
(2.) The facts giving rise to initiation of the proceedings may be summed up thus : (a) The respondent company filed a suit under Order 37 of the Code of Civil Procedure being Summary suit No. 1790 of 2002 against the appellant and one Suresh Kumar Jain on the ground that the respondent company had lent and advanced a sum of Rs. 2 crore to one M/s. Appu Industries Ltd. and the appellant along with Suresh Kumar Jain, had stood guarantor to the said amount of Rs. 2 crore which was to be paid by the borrower company, namely, Appu Industries Ltd. along with an interest at the rate of 15 per cent per annum. (b) In view of the alleged default committed by the borrower company, the respondent by invoking the guarantee furnished by the appellant and the said Suresh Kumar Jain, filed a suit being Suit No. 1790 of 2002 before the Hon'ble Bombay High Court. In the said suit, the borrower company namely, Appu Industries Ltd., however, was not made party. The said suit was decreed ex parte in favour of the respondent on 11th December 2002. (c) By a notice dated 2nd May, 2003 issued by the learned advocate for the respondent under Section 9(3) of the Act calling upon the appellant and the said Suresh Kumar Jain, the respondent demanded a sum of Rs. 3,31,73,935/- within five weeks from the date of service of such notice. In the said notice, it was further alleged that if the payment was not made within the period specified therein, the appellant and Suresh Kumar Jain would be deemed to have committed an act of insolvency under Section 9(2) of the Act and an insolvency petition would be presented before the appropriate Court for adjudging them as insolvent. (d) By the said notice, according to the respondent, the addresses were called upon to make an application if they so intended under Section 9(5) of the Act for setting aside the said notice. (e) On 24th June, 2003, the respondent company affirmed an affidavit verified by one Sri V. C. Dev, Deputy Manager (Legal) seeking declaration that the appellant and the said Suresh Kumar Jain had become insolvent and notice of motion was taken out on 30th June, 2003 and the same was filed in the High Court at Calcutta and had been numbered as I. C. Case No. 5 of 2003. (f) In the said application, it was alleged by the respondent that despite service of insolvency notice under Section 9(2) of the Act. the appellant and said Suresh Kumar Jain had failed and neglected to pay the decretal amount of Rs. 3,31,73,935/- or to furnish security on payment of such amount. (g) According to the respondent, the appellant and the said Suresh Kumar Jain had avoided the services of the said notice and failed to comply with the same within a period of five weeks from the date of service. Hence the application for adjudication as insolvent.
(3.) The appellant contested the application by filing opposition thereby denying the material allegations made in the application for insolvency and according to the appellant, he for the first time came to know about the issue of the said notice in the month of September, 2003 when pursuant to the direction given by this Court a copy of the Insolvency petition was served upon him on 8th September, 2003.;