This civil miscellaneous second appeal arises out of judgment and decree dated 11.7.2007 in AS No. 47 of 2003 on the file of the learned II Additional District Judge, Kadapa, at Proddatur, whereby he has confirmed the order dated 30.4.2003 in IP No. 61 of 1999 on the file of the learned Senior Civil Judge, Proddatur.

2. No one appeared for the respondents at the hearing.

3. I have heard Mr. R. Dheeraj Singh, learned Counsel for the appellant and perused the record.

4. Respondent Nos. 1 to 7 filed IP No. 61 of 1999 on the file of the learned Senior Civil Judge, Proddatur, under Sections 7 and 9 of the Provincial Insolvency Act, 1920 (for short "the Act"), to adjudicate respondent Nos. 8 and 9 as insolvents and declare that the sale of the petition schedule property made in favour of the appellant is an 'act of insolvency'.

5. The petitioners in the I.P. pleaded that respondent Nos. 8 and 9 have obtained a loan of Rs. 1,90,000/- from them for the purpose of running hotel business by name "Subhani Tea Stall", that with the consent and in connivance of each other, they have alienated A-schedule property in favour of the appellant herein under registered sale deed bearing No.2894/99 dated 16.8.1999 for Rs. 1,50,000/-. They have further pleaded that the real value of the property was Rs. 4,00,000/- and that respondent Nos. 8 and 9 have executed the sale deed nominally in favour of the appellant, who is their close friend, in order to screen the property. They have further averred that respondent Nos. 8 and 9 were due to a tune of about Rs. 6,00,000/- to various other creditors. They have accordingly sought for the reliefs of declaring respondent Nos. 8 and 9 as insolvents, setting aside the sale deed, selling the petition schedule properties and to distribute the sale proceeds among the creditors.

6. In support of their claim, the petitioners in the I.P. examined PW1 to PW3 and marked Exs.A1 to A4. On behalf of respondent Nos. 8 and 9, RW1 and RW2 were examined and Exs.B1 was marked. On appreciation of the oral and documentary evidence, the trial Court has allowed the I.P. by declaring respondent Nos. 8 and 9 as insolvents and directing that the petition schedule property shall vest in the official receiver for due administration among the creditors. The trial Court has also granted one year's time for discharge. Feeling aggrieved by the said order, the appellant filed AS No. 47/2003 which was dismissed by the learned II Additional District Judge, Kadapa, Proddatur, by order dated 11.7.2007. Assailing both these orders, the appellant filed this C.M.S.A.

7. At the hearing, the learned Counsel for the appellant has advanced two submissions:

(i) That the I.P. was filed beyond the period of three months stipulated in the proviso to Section 9(1)(c) of the Act from the occurrence of the alleged 'act of insolvency'; and

(ii) that the trial Court has not framed issues.

The learned Counsel, while elaborating his first submission argued that before the registered sale deed was executed by respondent Nos. 8 and 9 in favour of the appellant on 16.8.1999, a possessory agreement of sale was executed on 18.1.1999 and that the same was followed by the registered sale deed in question. He argued that for the purpose of reckoning the limitation under Section 9 of the Act, the date on which possessory agreement of sale was executed shall be considered.

8. In order to decide the first submission of the learned Counsel, Section 9 of the Act needs to be noticed. It reads as under :

Conditions on which creditor may petition:-

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

(a) the debt owing by the debtor to the creditor, or, if two or more creditors join in the petition, the aggregate amount of debts owing to such creditors, amounts to five hundred rupees, and

(b) the debt is a liquidated sum payable either immediately or at some certain future time, and

(c) the act of insolvency on which the petition is grounded