The transferees of a debtor cannot raise the plea that the debtor is able to discharge the debts and that the insolvency petition should be dismissed under section 25(1) of the Provincial Insolvency Act, 1920.

K. JAYACHANDRA REDDY, J.

( 1 ) THE question of law that arises in this revision petition is whether a petition presented by a creditor under the provisions of the Provincial Insolvency Act 1920, hereinafter referred to as "the Act" can be dismissed under section 25 of the act on the basis of the plea of the debtor s transferee that the debtor has means to discharge the debt.

( 2 ) TO appreciate the question involved, the necessary facts may be stated. For the purpose of better appreciation and convenience, the parties are referred to as they are arrayed in the Insolvency Petition. The petitioner is the creditor and the 1st respondent is the debtor who is said to have borrowed from the petitioner Rs. 3600/- for his family necessities and did not discharge the debt. The other two respondents are the alienees. The insolvency petition was contested by the alienees, but the debtor (viz. . the 1st respondent) remained exparte. The learned Subordinate Judge dismissed the I P holding that where on the facts proved and assets established it is clear that the debtor is in a position to pay his debts, the Court is bound to dismiss the insolvency petition of the creditor under section 25 (1) of the Acts.

( 3 ) AS against the said order, the creditor filed an appeal. In the appeal also the debtor remained exparte. The a Fienees however contested and both the parties put forward the same pleas. One; of the important pleas put forward is that the debtor s ability to discharge the debts can be considered on the plea of the debtor himself and not on the basis of the plea raised by the transferees. The learned additional District Judge, after examining the scope of section 25 (1) of the Act, mainly relied on a judgment of the Labore High court in Harmon Singh vs Gopal Das (1) air 1929 Lahore, 79 and held that it is not open to the transferees viz,, alienees to submit that the debtor is able to discharge his debts and ask for dismissal of the petition. The learned appellate Judge also held on other points that the lower Court was not right in holding that the debtor was in a position to pay off his debts. He also rejected the contention that there was a collusion between the creditor and the debtor. Accordingly he allowed the appeal. Hence the revision by the alienees.

( 4 ) SRI Somakonda Reddy the learned counsel for the petitioner submits tha section 25 of the Act is comprehensive and wide and enables the transferees also to put forward the plea that the debtor is in a position to discharge the debts. Sec. 25 (1) reads thus: -"25. Dismissal of petition:- (1) In the case of a petition presented by a creditor where the Court is not satisfied with the proof of his right to present the petition or of the service on the debtor of notice of the order admitting the petition or of the alleged act of insolvency, or is satisfied by the debtor that he is able to pay his debts, or that for any other sufficient cause no order ought to be made the court shall dismiss the petition". The learned counsel submits that the court has been given a discretion to dismiss the petition, if it is satisfied that there is other sufficient cause for dismissing the IP and the fact that the transferees have put forward the plea, that ,the debtor is in a position to discharge his debts and substantiate the same amounts to sufficient cause and the Court in its discretion dismiss the I P accepting the same. I find it extremely difficult to interpret the expression "that for any other sufficient cause in the manner in which the learned counsel submits. An analysis of section 25 (1) shows that there are three circumstances in which the petition made by the creditor must be dismissed, viz. , (1) absence of right of creditor to make application: (2) failure to serve debtor with notice of admission of petition, and (3) ability of debtor to pay his debts. In addition to these circumstances, the Court has been given a discretion to dismiss the petition if it is satisfied that there

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