Failure to comply with an insolvency notice issued under Section 9(2) of the Presidency Towns Insolvency Act, 1909, constitutes an act of insolvency.

ORDER :- This petition is filed by the petitioning creditor under Sections 9(2) and 10 to 13 of the Presidency Towns Insolvency Act to adjudicate the respondents as insolvents.

2. The grounds on which the above petition is filed, are that the petitioner filed a suit in O.S. No. 9100 of 1981 before the 17th Assistant Judge, City Civil Court, Madras, for recovery of possession of the suit property and for mesne profits. The said suit was decreed on 28-4-1984 and as per the decree, the respondents are liable to pay a sum of Rs. 88,179.75. It is the further case of the petitioner that under the provisions of the amended Insolvency Act, insolvency notice was sent to the respondents in I.N. No. 9 of 1985 calling upon them to pay the above sum. Though the respondents acknowledged the said notices on 6-4-1985 and 9-4-1985 respectively, they did not choose to send any reply nor comply with the said notice and hence they have committed an act of insolvency under Section 9(2) of the Act. According to the petitioner, the respondents, are heavily involved in debts and hence the petition.

3. The said petition was resisted by the respondents and they filed a counter inter alia contending that the petition is not maintainable either in law or in facts inasmuch as the decree passed in O.S. No. 9100 of 1981 is neither enforceable nor conclusive and hence the petition is liable to be dismissed in limine. They further denied that they are heavily involved in debts.

4. Both sides have not adduced any oral evidence and the learned counsel appearing on either side only advanced arguments in support of their respective contentions.

5. The only point that arises for consideration in this insolvency petition is, whether the petitioner can enforce the decree for recovery of Rs.88,179.75 and whether the respondents can ignore the insolvency notice.

6. According to the learned counsel for the respondents, there is no decree at all for enforcing the claim of Rs.88,179.75 towards the future mesne profits since the petitioner has not paid the necessary court-fee for drafting the decree and at such, the insolvency notice issued for recovery of the said amount in the absence of any decree is void ab initio and consequently it cannot be said that the respondents have committed an act of insolvency on account of the failure of the respondents to take any step to set aside the insolvency notice within the time allowed or till this day. On the other hand, it is the contention of the learned counsel for the petitioner that there is a valid decree in respect of the mesne profits and that the question of paying court-fee arises only at the time of filing execution petition. Further, in the instant case, the respondents who failed to raise any objection to the insolvency notice are deemed to have committed an act of insolvency and they are estopped from raising any contention. Further, under Section 9(2)(5)(c) of the Presidency Towns Insolvency Act, the contention regarding the executability of the decree can be raised under any law referred to in Clause (b) of Section 9(2)(5) which refers only to law providing for the relief of indebtedness.

7. To appreciate the respective contentions of the parties, it is worthwhile to extract the relevant provision of the Presidency Towns Insolvency Act, namely, the amended provision of Sec.9(2) of the Presidency Towns Insolvency Act 1909. By virtue of the Insolvency Laws (Amendment) Act, 1978, No. 28 of 1978, the Parliament had enacted the following provision :-

"9(2). Without prejudice to the provisions of sub-section (1), a debtor commits an act of insolvency if a creditor, who has obtained a decree or order against him for the payment of money (being a decree or order which has become final and the execution whereof has not been stayed), has served on him a notice (hereafter in this section referred to as the insolvency notice) as provided in sub-section (3) and the debtor does not comply with that notice within the period sp