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1977 Supreme(Mad) 218

IN THE HIGH COURT OF JUDICATURE AT MADRAS
T. Ramaprasada Rao and S. Suryamurthy, JJ.
The Audilakshmi Venkateswara Iron Traders, by Partners and another .....Appellant(s)
Versus
Mayavanthi Jhamandas, Sole Propx, Seth Jhamandas Company, by power of Attorney Agent, and others .....Respondent(s)
O.S.A.No. 79 of 1973,
Decided On : 18 April 1977

Advocates:
E. R. Krishnan, for Appellant.
K.N. Balasubramanian, for Respondent No. 1.
The Official Assignee, for Respondent No. 3.

Postponement of payment cannot be held as an act of insolvency.

Headnote:Presidency Towns Insolvency Act, 1909-Section 9 (d) (iii) and (g) -Held, postponement of payment does not mean an act of insolvency-Petitioning creditor must have witnesses to prove scrutiny of laws at a later stage.

       

Ramaprasada Rao, J.-This is an appeal against the judgment of Paul, J., who adjudicated the appellants as insolvents in I.P. No. 85 of 1972 mainly on two grounds. The first ground is that one of the insolvents was not ‘found in the usual place of residence and business and that he secluded himself from the creditors, and the second ground is that the debtors suspended payment. The petitioning creditors complained that the debtors have committed acts of insolvency within the meaning of section 9 (d) (iii) and section 9 (g) of the Presidency Towns Insolvency Act. The facts which led to the filing of the petition may be briefly summarised thus: The petitioning creditors claimed that Audilakshmi Venkateswara Iron Traders represented by its partners, K. Subbarayalu Chetty and K. Radhakrishnan and Sri Balaji & Co., represented by its partners K. Radhakrishnan and K. Balasubramaniam were indebted to them in the sum of Rs. 3,500 on the foot of a promissory note executed by the partners of the above firms and that before they came to Court with this insolvency petition another creditor attached the goods of the debtors and the debtors have removed a substantial portion of their stock in trade and they were arranging to sell both their business and other properties with intent to defeat and delay their creditors. The acts of insolvency are sought to be established by the petitioning creditors through their two witnesses examined as P.Ws. 1 and 2. We shall presently consider their testimony in detail. Their case is that P. W. 1 by himself or along with P.W. 2 approached the debtors and demanded payment and that the debtors expressed their unwillingness to pay the same and finding that the father of one of the debtors Was not available in the business premises, they went to the residence of the father where admittedly the other sons were also residing (sons being the other debtors in the case) and finding that the father was not available at his residence they were satisfied that there was not only a seclusion of one of the partners from the business premises and from the normal place of residence but, also an express uncanny expression by the debtors that they have suspended their payments. Paul, J., accepted the evidence of P.Ws. 1 and 2. He would not believe the father examined as R.W. 1 that he was not present on the date when P.Ws. 1 and 2 are said to have visited him at his residence since he was regularly going to the hospital having been struck by paralysis by then and that he did not at all meet P. Ws. 1 and 2 in the manner suggested by them. P.W. 2 denied the demand alleged to have been made either by P. W. 1 or by P.W. 2 and would say that though they have adjusted with some of the creditors by paying them a lesser amount than what was due to them no-act of insolvency has been committed in so far as the petitioning creditors are concerned and that, therefore, the petition had to be dismissed. We shall now take up the evidence of P.Ws. 1 and 2 to find out whether the evidence in this case is sufficient to establish the acts of insolvency complained of. P.W. 1, is the authorised agent of the petitioning" creditors. He speaks to the debt due and owing by the debtors as is seen from Exhibit P-1, the promissory note. In answer to a question whether he demanded the amount under the promissory note, he answered in the affirmative. Thereafter he referred to certain suits filed by other creditors of the debtors which in our view is not relevant for the purpose of this case. On the allegation that the debtors grave notice of suspension of payment of debts he swore in the witness box as follows:

Q: When did you go to their place of business ?

A: On the morning of 24th August, 1972.

Q: Who were all there?

A: The sons were there.

Q: What did they tell?

A: They said that they were not in a position to pay, that they had suspended payment to the creditors and that the creditors could do what they liked.

Q: What did you do?

A: I went to their resident





























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