A. Venkatachala Udayar vs S.V. Kasi Pandaram and Others

T. Venkatadri, J.—The Revision Petition is against the order passed by the learned District Judge, Salem, in adjudicating the 1st respondent

as insolvent on his own petition alleging that he was not in a position to pay the debts of all the creditors including the petitioner herein. The learned

District Munsif in the first instance dismissed the petition on the ground that the respondent had not proved his inability to discharge the debts

incurred by him. The learned District Judge reversed the decision and gave a finding that the 1st respondent has got a prima facie case to

adjudicate himself as an insolvent and allowed the petition filed by the respondents It is against the order the petitioner, one of the creditors, has

filed the present Civil Revision Petition.

The only point that arises for my consideration is whether the order passed by the learned District Judge is correct or not as per Section 24 of

the Provincial Insolvency Act. Section 24 of the Act merely says that a prima facie case has to be made out before the Court when a person files

an application to adjudicate himself as an insolvent. In the petition filed by the 1st respondent he gave a list of creditors about nine in number

including the petitioner herein. The petitioner herein, (8th respondent in the lower Court) alone contested the petition on the ground that the debts

disclosed by the 1st respondent herein were all fictitious. Evidence has been let in to prove that he (the 1st respondent) was in possession of some

landed properties and that he was in a position to discharge the debts. But the appellate Court came to the conclusion that it was not necessary for

the 1st respondent herein to prove each and every debt and that it was enough if he had a prima facie case to show that he had no sufficient means

to discharge all the debts. The petitioner herein obtained a decree against the respondent and he was taking execution proceedings by way of

arrest. It is only at that stage the respondent herein filed the petition for adjudicating himself as an insolvent. It is not necessary at this stage to

enquire whether all the debts disclosed in the petition are genuine debts or not. It is enough for the Court to come to the conclusion whether the

respondent has got a prima facie case to adjudicate himself as an insolvent. As as matter of fact the 1st respondent herein went into the witness

box and expressed his inability to pay the debts mentioned in the schedule to the petition. A Bench of this Court has held in Racharla Narayanappa

Vs. Kondigi Bheemappa and Others, , as follows:

When a person presents a petition to be adjudicated an insolvent that petition itself is treated an act of bankruptcy under the Insolvency Law. And

when he says that his liabilities are more than his assets that must be taken as some evidence that he is unable to meet his liabilities. No enquiry

need be made as to whether some of the debts mentioned in his petition are real debts. An enquiry into the bona fides of the insolvent should be

held when he comes up, for discharge and not before.

Here in this case the 1st respondent not only went into the witness box but also admitted that he assigned a mortgage bond in favour of the 7th

respondent in the petition in the lower Court and also took an advance of Rs. 200 in respect of a house. There is no satisfactory proof that he is

possessed of any immovable property except that he was paying kist. That alone will not show that he is possessed of immovable property. There

is no other document to show that this property belongs to him and that he is in possession of any other immovable property. The order passed by

the learned District Judge seems to be correct. This Civil Revision Petition is dismissed; but there will be no order as to costs.