The main legal point established is that under Section 26(1) of the Provincial Insolvency Act, petitioners may apply for compensation regardless of the grounds for dismissal of the insolvency petition and their personal liability for the debt.

Horace Owen Compton Beasley, Kt., C.J.

1. The respondent presented a petition in insolvency against a Hindu father and his two sons to have them declared insolvents. The two sons are the petitioners. Their father executed a promissory note in favour of the respondent for Rs. 1,500 on 6th June, 1931. On 4th March, 1932, the respondent made a demand upon the father for payment of the promissory note debt. Between that date and 14th March, 1932, there were a series of alienations of joint family property, the petitioners with their father being parties to these alienations. On 27th June, 1932, the respondent presented the insolvency petition already referred to on the ground that the father in his capacity as family manager had executed the promissory note in question and alleging that the debt was binding on all the members of the family and that the debt had not been discharged in spite of repeated demands. He alleged that the three respondents to the insolvency petition had brought about a number of sales in favour of their relations, friends and others quoting fictitious debts. This petition was returned on the ground inter alia that the creditor must state how the respondents 2 and 3 to the petition were liable to be adjudged insolvents. It was re-presented with the following endorsement:

The first respondent is the family manager. Respondents 2 and 3 are liable for the debt and they have joined the first respondent in fraudulently dealing with the properly. They are therefore liable to be adjudged.

2. On 30th November, 1932, the creditor filed a statement to the effect that his claim was satisfied and that the insolvency petition might therefore be dismissed. On 1st December, 1932, the petitioners put in an application for compensation under Section 26 of the Provincial Insolvency Act and the Additional Subordinate Judge on 2nd December, 1932, passed the following order on the insolvency petition:

Petitioners vakil files memo, that ciaim is satisfied and that the petition may be dismissed. Respondents press for costs. So, the point whether this petition was filed on sufficient grounds has to be gone into. Respondents 2 and 3 have filed a petition for compensation. For enquiry, 20th January, 1933.

3. On the application for compensation the following order was made, "counter in a week. Enquiry on 20th January, 1933". Later, the matter came up before Mr. Narayana Menon, the then Additional Subordinate Judge, whose predecessor had passed the orders to which I have referred. As regards the father, he passed the following order:

The first respondent admittedly owed the money to the petitioner when the insolvency petition was filed. He had also admittedly alienated a major extent of his properties. The first respondent did not pay the petitioners debt for nearly four mcnths after the alienation. The petitioner had therefore some justifiable apprehension that the alienation was intended to defeat him. The first respondent paid the debt due to petitioner after filing of the insolvency petition. In these circumstances I order the first respondent to bear his costs.

4. With regard to the petitioners he held that on the face of the insolvency petition they were not necessary parties and could not be adjudged insolvents as they were not personally liable and he ordered the creditor to pay their costs. It is clear that the creditors statement where he says that the debt had been settled by payment asks for a dismissal of the petition. I think that it must be tajcen that the petition was dismissed under Section 25 of the Provincial Insolvency Act and it is not suggested by Mr. K.S. Jayarama Aiyar for the respondent that it could be dismissed under any other section though he contends that it was merely withdrawn and not dismissed. With this contention I do not agree as in my view this comes within the words of the section:

Or that for any other sufficient cause no order ought to be made, the Court shall dismiss the petition.

5. The petitio