Mathai and Another vs Velu

Gangadhara Menon, J.—The petitioning creditors in I.P. No. 4 of 1950 of the Trichur District Court are the Appellants. They sought to have the counter-Petitioner adjudicated an insolvent. The learned Judge dismissed the application on the ground that no act of insolvency was committed within the statutory period of three months.

Though various acts of insolvency are alleged in the petition, the Petitioners relied only on Ext. A, a notice issued by the counter-Petitioner and Ext. B, a statement by the counter-Petitioner in a prior insolvency proceeding wherein reference is made to Ext. A, as constituting acts of insolvency.

Section 6(g) of Act 7 of 1098 (Cochin) enacts:

A debtor commits an act of insolvency in each of the following cases, namely:

...

(g) If he gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts; or

...

and Section 9(1)(c) provides:

9(1)A creditor shall not be entitled to present an insolvency petition against a debtor unless - - -

(c) the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition.

Ext. A notice is dated 27-1-1125. The present application is filed on 27-5-1125. Admittedly therefore Ext. A notice was issued more than three months prior to the date of the application by the Appellants to adjudicate the Respondent as an insolvent. Therefore, even if Ext. A. amounts to a notice as enjoined u/s 6(g), the act of insolvency based on Ext. A has occurred more than three months prior to the date of presentation of the petition and u/s 9(c) the Appellants would not be entitled to present an insolvency petition against the Respondent on the basis of Ext. A notice.

It is however contended that Ext. B statement by the counter-Petitioner in a prior insolvency proceeding which is within the statutory period of three months will amount to notice to the creditors that the counter-Petitioner has suspended payment of his debts. We halve carefully read Ext. B and we do not think that the statement in Ext. B amounts to a notice to the creditors regarding suspension of payments of the debts as enjoined u/s 6(g). The passage in Ext. B that is relied on is a statement by the counter-Petitioner that has issued Ext. A notice when he was questioned whether he had not issued Ext. A notice the counter-Petitioner stated that he had issued such a notice. This was only an admission of the fact of having issued Ext. A notice on its date. Ext. B statement does not amount, to any notice to the creditors that on the date of Ext. B deposition the Respondent has suspended or is about to suspend payment of his debts. No doubt, as stated in Ananda Kini Nagendra v. Dadasethu 31 TLJ 1095 (A), the notice need not be in any prescribed form, nor need it be communicated in any particular way. But the language used in the statement relied on must be such as to convey the idea that the debtor has suspended payment or is about to suspend payment of his debts. No such expressions are use in Ext. B. Ext. B cannot therefore be of any help to the Petitioners. We see no reason to interfere with the order appealed against. The appeal is groundless and it is dismissed with costs.