Judgment

RAGHUBAR DAYAL, J.: This appeal, by special leave, raises mainly the question whether the Insolvency Court can, at the hearing of a petition by a creditor for declaring a debtor insolvent, determine the liability of the alleged debtor for the payment of the debt for the recovery of which the creditor had obtained an order under the Patiala Recovery of State Dues Act, 2002 BK (Act IV of 2002 BK), hereinafter called the Act. To appreciate how the question arises on the facts of the case, reference to the provisions of the Act is necessary and we set them out first.

2. The Act was enacted to consolidate and amend the law relating to the recovery of State dues. According to cl. (1) of S. 3 State dues included debts due to the Patiala State Bank. The expression department includes the Patiala State Bank, and the expression defaulter means a person from whom State dues are due and includes a person who is responsible as surety for the payment of any such dues. Head of Department means, among other things, the Managing Director in the case of the Patiala State Bank. Chapter II purported to deal with determination of State dues and modes of recovery thereof. Section 4 which