FIRM MUKUND LAL VEERKUMAR Vs. PURUSHOTTAM SINGH

JUDGEMENT

(1.) These appeals are brought, by special leave, from the judgment of the Allahabad High Court dated November 1, 1961 in three Civil Revision Applications Nos. 310 to 812 of 1960.

(2.) Appellant No. I is a registered firm of which appellant No. 2, Mukund Lal and respondent No 7, Ram Surat Misra are the only two partners. The firm carried on 'Arhat' (Commission Agency) business. Three petitions under the Provincial Insolvency Act (Act V of 1920) , hereinafter called the 'Act', were made against the firm and its two partners under S. 7 of the Act. Purushottam Singh, respondent No. 1 and Sat Narain Singh, respondent No. 2 filed the first petition (Petition No. 9 of 1958) on April 28, 1958. The second petition was filed by Smt. Tara Devi, respondent No. 3 and Shyam Das, Respondent No. 4 on May 30, 1958 which was registered as Petition No. 19 of 1958. The third petition was filed by Jivenda Mal on January 20, 1959 which was registered as Petition No. 2 of 1959. In petition No. 9 of 1958, a sum of Rs. 15,780 was claimed; in petition No. 19 of 1958, a sum of Rs. 14,545 was claimed and in petition No. 2 of 1959 a sum of Rs. 3,884 was claimed but other creditors also filed their claims to the extent of Rs. 96,000. In all these petitions it was alleged that the firm and its two partners had committed acts of insolvency and therefore they should be declared insolvents. The firm and its partners contested the petitions and asserted that they had already paid a sum of Rs. 3,50.000 to other creditors and they were in a position to pay all the creditors and had not committed any acts of insolvency. All the three insolvency petitions were consolidated together and were heard by the Insolvency Judge, Varanasi who by his judgment dated August 8, 1959 adjudicated the firm and its two partners as insolvents. Thereafter, the firm and its two partners filed three appeals under S. 75 of the Act but all these appeals were dismissed by the Additional District Judge Varanasi by his judgment dated February 28, 1960. Thereafter the firm and its two partners took the matter in revision to the Allahabad High Court which partly allowed the revision applications and set aside the order of the lower courts adjudging Ram Surat Misra, respondent No. 7, one of the partners of the firm as insolvent. The rest of the order declaring the firm and its other partner, Mukand Lal as insolvent was confirmed.

(3.) The main question to be considered in these appeals is whether the deed of gift executed by Mukand Lal in favour of his son, Veer Kumar on October 31, 1957 and registered on March 11, 1958 could be treated as an act of insolvency committed within three months of the presentation of the petition