Applicability of the provisions of Section 6(1)(b) of the Act.

C.R.P.No.381 of 1986 arises out of the order passed in C.M.A.No.51 of 1985, which in turn arose out of the order passed in I.P.No.26 of 1982. C.R.P.No.382 of 1986 arises out of the order passed in C.M.A.No.19 of 1985, which in turn arose out of the order passed in I.P.No.25 of 1982. The petitioner herein is the respondent in I.P.No.25 of 1982. C.R.P.No.2306 of 1986 arises out of the order passed in C.M.A.No.19 of 1985 which in turn arose out of the order passed in I.P.No.25 of 1988. Respondents 3 to 5 in I.P.No.25 of 1982, are the petitioners herein. C.R.P.No.2307 of 1986 arises out of the order passed in C.M.A.No.51 of 1985, which in turn arose out of the order passed in I.P.No.26 of 1982. Respondents 3 to 5 in I.P.No.26 of 1982 are the petitioners herein.

2. I.P.No.25 of 1982 was filed by one Saraswathi Ammal and I.P.No.26 of 1982 was filed by one Velammal. The respondents in both the petitions are common.

3. In I.P.No.25 of 1982 the facts are as under: The first respondent M.R.Arumugam is the son of Rangasamy Gounder. The second respondent R.Sellakumar is the predeceased son of Ranagasamy Gounder. Rangasamy Gounder, M.R.Arumugham, R.Sellakumar and one R.Velusamy another son of Rangasamy Gounder constituted a partnership firm called “M/s.Jothikumar Textiles” dealing in handloom and powerloom textiles. On 12. 1980 the said Rangasamy Gounder acting in his capacity as a partner, borrowed a sum of Rs.5,000 from Saraswathiammal (the petitioner) for the purpose of the said firm and executed a promissory note promising to repay the said amount with interest at 0.05 per cent per day. Thereafter, inspite of repeated demands none of the partners in the firm made any payment towards the promissory note debt. As on date, the amount due on the promissory note dated 12. 1980 was Rs.7,185.

4. Apart from the debt due to the petitioner, the said firm is heavily indebted and placed itself in an irretrievable situation and being unable to discharge the debts, the partners have begun devising ways and means of cheating the creditors and avoiding payment of debts. Respondents 1 and 2 colluding together, have resorted to similar decisions to defraud their creditors in cheating the petitioner.

.5. Mr.R.Arumugam (R1) colluding with his sister’s son Arul Arangam (R3) and another sister’s husband Chinnathambi Gounder (R4) executed two agreements on 30.3.1981, one in favour of 3rd respondent and the other in favour of 4th respondent. In one agreement, M.R.Armugham agreed to sell some of his properties to the 3rd respondent for a sale consideration of Rs.30,000 on the date of agreement. Third respondent was put in possession of property agreed to execute the sale deed on or before 29. 1981 on receiving the balance consideration of Rs.5,000. The second agreement was also executed on the same date. By this agreement M.R. Arumugam agreed to sell the rest of the properties to 4th respondent for a sum of Rs.40,000, Rs.35,000 was received by way of advance on the date of agreement. The purchaser was put in possession of the properties. He undertook to execute the sale deed on or before 29. 1981 on receiving the balance of Rs.5,000.

6. R.Sellakumar in collusion with 5th respondent, who is 2nd respondent’s father’s brother executed an agreement of sale on 4. 1981. He agreed to sell his properties to 5th respondent for Rs.77,000. He received an advance of Rs.65,000 on the date of agreement. The purchaser was put in possession of the properties. He undertook to execute the sale deed on or before expiry of six months from the date of agreement on receipt of balance of Rs.12,000.

7. By executing such documents, the respondents 1 and 2 intended to put their properties beyond the reach of the creditors including the petitioners. There is no truth in the documents. The properties are grossly undervalued. The value mentioned in the agreements is less than 1/5th of their value. Respondents 1 and 2 never parted with possession of the properties as state