1938 Supreme(Mad) 23

IN THE HIGH COURT OF MADRAS
Devarinti Dasi Reddi Annaji Chinnappa Reddi and Ors.
Versus
Dasari Venkobayya
Decided On : 20.01.1938

The creditor need only prove the right to present the petition and the alleged act of insolvency, and adjudication must follow unless the debtor proves his ability to pay debts.

Headnote:

Creditor's Right - Insolvency - The creditor need only prove the right to present the petition and the alleged act of insolvency, and adjudication must follow unless the debtor proves his ability to pay debts (Section 25 (1) Provincial Insolvency Act).

Fact of the Case:

The learned District Judge erred in requiring the creditor to prove the debtor's inability to pay debts. The creditor only needs to prove the right to present the petition and the alleged act of insolvency.

Finding of the Court:

The appeal is allowed, the order of the District Judge is set aside, and the insolvency petition is restored for disposal according to law. The appellants will recover the costs from the estate.

Issues: The requirement for the creditor to prove the debtor's inability to pay debts and the correct interpretation of Section 25 (1) of the Provincial Insolvency Act.

Ratio Decidendi: The creditor need only prove the right to present the petition and the alleged act of insolvency, and adjudication must follow unless the debtor proves his ability to pay debts.

Final Decision: The appeal is allowed, the order of the District Judge is set aside, and the insolvency petition is restored for disposal according to law. The appellants will recover the costs from the estate.