A debtor seeking to be adjudicated as an insolvent under Section 10 of the Provincial Insolvency Act, 1920 must prove that he is unable to pay his debts. Failure to disclose all assets and liabilities, non-compliance with the conditions of Section 13(1)(e) of the Act, and lack of evidence of efforts to discharge the debt may lead to a finding that the debtor has not satisfied the burden of proof.

1. This CMSA is directed against the order dated 30.3.92 passed by the District Court, Dharmapuri at Krishnagiri in CMA. No. 37 of 1989.

2. The appellant herein got a decree against the first respondent in O.S. No. 32 of 1978, O.S.361of 1978 and O.S. No. 292 of 1982 and also filed execution petition before the District Munsif Court, Karur. The respondents 2 to 4 are the other creditors of the first respondent and they were also making arrangement to take necessary action against the first respondent. Only at that time the first respondent filed an application in I.P. No. 2 of 1989 before the sub-court, Dharmapuri stating that the value of his property is lesser than his debts and he would not be able to satisfy the debts and therefore prayed for an adjudication that he must be adjudicated as an insolvent.

3. The application filed by the first respondent was resisted by the appellant on the ground that the first respondent was having 5 acres of land with a motor pump set. He was earning more than Rs 20,000 per annum. The first respondent also has not disclosed all his assets. Apart from the assets listed in the petition the first respondent owns lands measuring 23 cents in Survey No. 121/4 and also another 1 acre and the first respondent is the absolute owner of those properties. The first respondents also has not disclosed the house property which alone would worth more than Rs 15,000. The first respondent was owning property worth more than Rs 80,000 and that therefore the value of his assets are more than the actual debt and in the said circumstances he was not justified is having filled an application to declare him as an insolvent. The respondents 2 and 3 are the sons-in-law of the first respondent and the fourth respondents is also related to the first respondents. The first respondents was having sufficient means to pay the debts and therefore the petition filed by him to adjudge him as an insolvent is not at all maintainable.

4. The insolvency court had considered the case of the first respondent and the appellant herein. Section 10 of the Provincial Insolvency Act prescribes the conditions on which a debtor can file a petition to adjudge him as an insolvent as follows:- A debtor shall not be entitled to present an insolvency petition, unless he is unable to pay his debts and

.(a) his debts amount to five hundred rupees;or

.(b) he is under arrest or imprisonment in execution of the decree of any Court for the payment of money;or

.(c) an order of attachment in execution of such a decree has been made, and is subsisting his property."

The insolvency court inferred that the appellant had taken necessary steps to bring the property of the first respondent in auction for the realisation of the amount. But, however, it has found that the first respondent even more than Rs 500 to the appellant and that therefore clause(b) of section 10 of the Provincial Insolvency Act is attracted and in holding as it has come to the conclusion that the appellant was taking necessary steps either to attach the properties of the first respondent or to arrest him and send him to civil jail and that the first respondent was not able to pay his debts and allowed the petition by adjudge the first respondent as an insolvent. As against the same, the appellant herein preferred an appeal in C.M.A. No. 37 of 1989 before the District Court, Dharmapuri at Krishnagiri and which also confirmed the order of the insolvency court and dismissed the appeal by its judgment dated 30.92. Aggrieved by the same, the appellant has preferred this appeal.

5. The lower appellate court has considered the facts and evidence and it came to the conclusion that the appellant had already obtained a decree against him and also made arrangements to execute the decree either laid down by the courts that if it is satisfied prima facie that the petitioner (insolvent) is unable to pay his debt and on being satisfied, it is not bound to hear any further evid