Court must first decide existence of debt.

The revision petitioner is the third respondent in I.PNo.5 of 1984 on the file of the II Additional Subordinate Judge, Erode and the third respondent in C.M.A.No.37 of 1990 on the file of the District Judge, Erode. The first respondent is the petitioning creditor before the Insolvency Court and the appellant before the lower appellate court. The second and third respondents herein are the respondents 1 and 2 before the Insolvency Court and respondents 1 and 2 before the lower appellate court. In this order, the parties to this revision will hereinafter be referred to as the petitioning creditor and the respondents respectively as they were described before the Insolvency Court. The petitioning creditor filed I.P.No.5 of 1984 to adjudicate the first respondent before the Insolvency Court. That was dismissed on merits. On appeal by the petitioning creditor, the order of the Insolvency Court was set aside and thus the first respondent came to be adjudicated as an insolvent. Hence, the present revision before this Court at the instance of the third respondent.

.2. I heard Mr.V.Narayanaswami, learned counsel appearing for the revision petitioner and though the contesting first respondent has though the contesting first respondent has been served, yet he has not chosen either to engage a counsel or to be present in court when the case was taken up. The facts leading to the present revision are as follows: The second respondent had obtained a money decree against the first respondent in O.S.No.1073 of 1979 on the file of the District Munsif, Erode. That decree was put in execution by the second respondent in E.P.No.71 of 1981. Ultimately, the property was sold through court auction in that execution proceeding. The sale through court was held on 11. 1983 in which, the third respondent became the successful bidder. The sale in favour of the third respondent was confirmed on 1. 1984. Alleging that the first respondent is a debtor for a sum exceeding Rs.500 to the petitioning creditor under a promissory note dated 2. 1982, I.P.No.5 of 1984 came to be filed by him before the Insolvency Court to have the first respondent adjudicated as an insolvent. The second respondent filed a detailed counter which was adopted by the first respondent and the third respondent. The petitioning creditor third respondent. The petitioning creditor examined himself as P.W.I and marked a promissory note in his favour as Ex.A-1. On the side of the respondents, a witness was examined on behalf of the respondent No.2 as R.W. 1 to B-13 on the side of the respondents. The case of the petitioning creditor in his petition was that the first respondent owes only the decree debt in favour of the second respondent; another debt due on a promissory note to one Ramaswamy Mudaliar to the tune of Rs.3,000 besides the debt in favour of the petitioning creditor. The first respondent borrowed on 2. 1982 a sum of Rs.9,500 from the petitioning creditor under Ex.A-1. The property was brought to sale for a price of Rs. 15,000 when its actual value was not less than Rs.30,000. The sale in favour of the third respondent is a fraudulent preference. In the counter filed before the Insolvency petition is an abuse of the pro- cess of the court. The promissory-note is a concoted one and that the debt under Ex.A-1 itself is denied. The application has been filed with mala fide intentions. The promissory note has bene created for the occasion of filing the insolvency application. The sale proceeds of the court sale that took place on 11. 1983 is very much available in tact in Court custody and the petitioning creditor can always move the Civil Court to realise the amount stated to be due under the promissory note and till he gets a decree, the amount lying in court deposit as referred to above may be secured.

3. The Insolvency Court on going through the pleadings and materials placed before it, found that the application filed by the petitioning creditor is a mala fide one and