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2019 Supreme(AP) 100

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
M. Seetharama Murti, J.
Beeram Guru Prasad - Appellants
Vs.
Margadarsi Chit Fund Pvt. Ltd. and Ors. - Respondents
CRP No. 975 of 2019
Decided On : 05-07-2019

Advocates Appeared:
For the Appellant : M. Ramakanth
For the Respondents: P. Durga Prasad

Headnote:

Provincial Insolvency Act, 1920 – Section 8 – Petition filed for arrest of JDrs 2, 3 and 5 for realization of decree amount, DHr pleaded that said JDrs paying income tax and that amongst said three JDrs, 2nd JDr is proprietor Sewing Machines at Station Road, Guntur, and that he is getting income per month and is having sufficient means and capacity to pay, in one lumpsum, amount due under decree and that if arrest is ordered, 2nd JDr pay amount due under decree and mentioned in EP and hence, execution petition is filed –Held, It is possible to accept that there is no willful failure to pay inspite of having sufficient means, even though his insolvency petition is not maintainable insofar as present DHr Chit Fund Company is concerned, yet as his earlier income is immaterial and as his present financial position and inability to satisfy debt indicate that he is in penury and that there is no mala fide refusal and/or willful failure to pay decree debt inspite of having means to discharge decree debt, it is not lawful and fair to order his arrest – facts and circumstances of case, I am of considered opinion ordering arrest of 2nd JDr one more time, knowing that such course would of no avail, would tantamount to violating his life and liberty, I am of considered view that petitioner-2nd JDr is not liable for arrest, Court draws ample support from precedential guidance in decision in Jolly George Varghese and another's case –Petition is allowed. (Para 13, 14)

Facts of the case:

Petition filed for arrest of JDrs 2, 3 and 5 for realization of decree amount, DHr pleaded that said JDrs paying income tax and that amongst said three JDrs, 2nd JDr is proprietor Sewing Machines at Station Road, Guntur, and that he is getting income per month and is having sufficient means and capacity to pay, in one lumpsum, amount due under decree and that if arrest is ordered, 2nd JDr pay amount due under decree and mentioned in EP and hence, execution petition is filed.

Findings of the court:

It is possible to accept that there is no willful failure to pay inspite of having sufficient means, even though his insolvency petition is not maintainable insofar as present DHr Chit Fund Company is concerned, yet as his earlier income is immaterial and as his present financial position and inability to satisfy debt indicate that he is in penury and that there is no mala fide refusal and/or willful failure to pay decree debt inspite of having means to discharge decree debt, it is not lawful and fair to order his arrest – facts and circumstances of case, I am of considered opinion ordering arrest of 2nd JDr one more time, knowing that such course would of no avail, would tantamount to violating his life and liberty, I am of considered view that petitioner-2nd JDr is not liable for arrest, Court draws ample support from precedential guidance in decision in Jolly George Varghese and another's case.

Result: Petition is allowed.

ORDER :

M. Seetharama Murti, J.

1. This civil revision petition, under Article 227 of the Constitution of India, is filed by the unsuccessful 2nd respondent-2nd JDr assailing the order, dated 15.7.2015, of the learned Principal Senior Civil Judge, Guntur, passed in EP No. 286 of 2013 in OS No. 76 of 2011.

2. I have heard the submissions of the learned Counsel for the revision petitioner-2nd JDr ['2nd JDr', for short] and of the learned Counsel for the 1st respondent-DHr ['DHr', for short]. Respondents 2 to 7-JDrs 1, 3 to 6 and 7 are stated to be not necessary parties. I have perused the material record.

3. After the original suit of the DHr Chit Fund Company was decreed, on 13.4.2012, the subject execution petition was filed for arrest of the JDrs 2, 3 and 5 for realization of the decree amount. The DHr pleaded that the said JDrs are paying income tax and that amongst the said three JDrs, the 2nd JDr is proprietor of M/s. Sai Lakshmi Sewing Machines at Station Road, Guntur, and that he is getting an income of Rs. 25,000/- per month and is having sufficient means and capacity to pay, in one lumpsum, the amount due under the decree and that if arrest is ordered, the 2nd JDr will pay the amount due under the decree and mentioned in the EP and hence, the execution petition is filed.

4. The 2nd JDr, who is the present revision petitioner, filed a counter contending inter alia that he has no capacity to pay the decree amount/the amount mentioned in the execution petition and prayed for dismissal of the execution petition.

5. During the course of enquiry an officer of the DHr Chit Fund Company and the 2nd JDr were examined as PW 1 and RW 1. One of the other JDrs against whom also the EP for arrest was filed was examined as RW 2. The other JDr remained ex parte.

6. The executing Court ordered arrest of all the three JDrs viz., JDrs 2, 3 and 5 and directed them to pay the amount due to the DHr on or before 17.8.2015 and further directed for issuance of warrants of arrest on payment of batta by the DHr in the event of non-payment of the EP amount by the said JDrs within the stipulated time.

7. Aggrieved thereof, the 2nd JDr filed this revision petition, inter alia, contending as follows: 'The DHr has already settled the case with the principal debtor. Hence, the DHr has no right to insist upon execution of the decree against this JDr. The EP is not maintainable. This JDr was arrested twice on 28.6.2018 and 8.8.2018. On both the said earlier occasions, he expressed his inability to pay the decree amount and stated that he has filed an insolvency petition in JP No. 6 of 2018 on the file of Senior Civil Court, Guntur, and that the same is pending. The health of the 2nd JDr, who is aged 64 years, is deteriorating. He is not of sound health. Hence, he cannot be imprisoned. No purpose would be served by repeatedly arresting an insolvent.'

8. Learned Counsel for the 2nd JDr placed reliance on a decision of the Supreme Court in Jolly George Varghese and another v. The Bank of Cochin, (1980) 2 SCC 360, in support of the contention that the JDr cannot be subjected to arrest and cannot be imprisoned when he is an insolvent and has no means to pay the decree debt and when it cannot be said that he is willfully and deliberately evading payment of the decree debt though capable of paying the same.

9. Learned Counsel for the DHr Chit Fund Company contended as follows:- 'The 2nd JDr is running M/s. Sai Lakshmi Sewing Machines and he is filing income tax returns and he is a solvent person. His objections are also over ruled while ordering his arrest by the order impugned by him in this revision. Under Section 8 of the Provincial Insolvency Act, 1920, ('Act', for short) the DHr company is exempted from insolvency proceedings and hence though an insolvency petition is wrongly filed and entertained, it is no bar for arrest of the 2nd JDr.

10. I have given earnest consideration to the facts and submissions.

11. Dealing first with the contention of the learned Counsel f

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