Rule of practice of English Courts applicable.

This is an application filed by one Mrs. Rahmath Bi to implead her as the second petitioning creditor in I.P. No. 31 of 1967. The facts giving rise to this application are these:

I.P. No. 31 of 1967 has been filed by one Angappa Raja to adjudge one R. A. Khaleel, the first respondent therein as insolvent. R. A. Khaleel had executed a promissory note for Rs. 20,000 on 16th July, 1963 in favour of Mrs. Rahmath Bi, who happens to be his sister. That promissory note was endorsed on 10th April, 1967 in favour of Angappa Raja. The endorsement was only for purposes of collection, the actual endorsement being “ I do hereby endorse this promissory note in favour of Sri D. Angappa Raja of No. 28, Muniappa Naicken St., Madras-11, for the purpose of collection.”

On 9th March, 1967 the debtor, Khaleel, had sold his lands, 12 acree 89 cents, in Arokkonam taluk to Shasukraj for Rs. 43,000. The deed was also registered on the same day. Angappa Raja filed I.P. No. 31 of 1967 on 22nd May, 1967, to adjudicate Khaleel as insolvent, the act of insolvency relied on being the above sale deed, dated 9th March, 1967. It is alleged that the sale was made with intent to defeat or delay the creditors of Khaleel. It is stated that he was indebted to an extent of Rs. 1,75,000, and that the lands in question were practically the only property of the debtor. He had no doubt a 15th share as a partner in a firm Abdul Rahman & Go. manufacturing beedies. But the firm itself was in an insolvent condition. It is further averred that the lands would be worth more than Rs. 70,000 and that the value of Rs. 43,000 mentioned in the deed was low.

Khaleel in his counter admitted his indebtedness to Mrs. Rahmath Bi but contended that Angappa Raja was not a creditor at all and was not entitled to file the petition for adjudication. The contention is that the endorsement in his favour is only for purposses of collection and would not authorise him to institute insolvency proceedings and that Angappa Raja had no proprietory interest in the promissory note and had not paid any consideration for getting the endorsement. Khaleel further pleaded on merits that he was solvent, that the sale was for a fair price and that be was not liable to be adjudicated.

The transferee, Shasukraj, also filed a similar counter contending that the transfer was bona fide and did not amount to an act of insolvency.

Before enquiring into the merits of the application, the contention that Angappa Raja was not entitled to file the petition was argued as a preliminary point. Thiru S.K. Ahmed Meeran, Counsel for Khaleel, based that contention on the grounds (i) that Angappa Raja being only an indorsee for collection and it being admitted that he had not paid any consideration for the endorsement was not a creditor entitled to file an insolvency petition; (it) in any case he became a creditor only on 10th April, 1967, after the alleged act of insolvency, dated 9th March, 1967 and only a person who was a creditor on the date of the act of insolvency could file a petition for adjudication.

Arguments were heard in part and before the adjourned date, Appln. No. 94 of 1968 was put in by Mrs. Rahmath Bi to implead her as the second petitionercreditor in order to overcome the above objection of the debtor Khaleel. This application has been stoutly resisted by the learned Counsel, Thiru S.K. Ahmed Meeran, for the debtor, and Thiru T.R. Srinivasan and Thiru M.P. Sundararajan appearing for the transferee, Shasukraj. Their point is that on 7th March, 1968, the date of Appln. No. 94 of 1968, more than three months had elapsed after the alleged act of insolvency (9th March, 1967), and therefore Mrs. Rahmath Bi could not herself file an independent application for adjudicating Khaleel as insolvent and so should not be allowed to get over the bar of limitation, by being impleaded as the second petitioning creditor in the petition, I.P. No. 31 of 1967, filed by Angappa Raja.

The relevant statutory provisions are t