An attachment of property for 21 days in execution of a money decree constitutes an act of insolvency under Section 9(e) of the Presidency Towns Insolvency Act, provided that the attachment is valid in law. The cessation of the attachment due to the dismissal of the execution petition for default does not have the effect of deeming no attachment at all between the date of filing the execution petition and its dismissal. Subsequent events, such as the dismissal of the execution petition, can be considered by the court in determining the existence of an act of insolvency.

JAGADISAN, J. :- This is a creditors petition for adjudicating the respondent-debtor as an insolvent under the provisions of the Presidency Towns Insolvency Act. It is alleged in the petition, that the respondent, who will hereinafter be referred to as the debtor, executed two promissory notes in favour of one RM. Shunmugham of Athikkadu Thekkur, Bamanathapuram Dt. and borrowed two sums of money, Rs. 5000 and Rs. 7500. The first promissory note for Rs. 5000 is dated 6-9-1960 and the second promissory note for Rs. 7500 is dated 5-7-1960. The petitioner, who will hereafter be referred as the petitioning creditor, claims to be the assignee of these two promissory notes from RM. Shanmugham for valid consideration. The act of insolvency relied upon by the petitioning creditor is that the property of the debtor remained under attachment in execution of a money decree for 21 days prior to the filing of this petition. Though the petition contains allegations of other acts of insolvency said to have been committed by the debtor, the petitioning creditor is unable to substantiate them. The debtor resists the application on the ground that there is no debt due and owing by him to the petitioning creditor, as the promissory notes assigned by RM. Shunmugham in favour of this petitioning creditor became discharged and satisfied by reason of his having executed a consolidated promissory note in favour of one Sivalinga Chettiar. The debtor also avers that he has not committed any act of insolvency, and that the attachment of his property relied upon as an act of insolvency will not any longer avail as the execution petition of the decreeholder, who attached the property, has itself been dismissed.

2. The petition came on for hearing before Kailasam J. The learned Judge recorded evidence and heard the parties. He reached the conclusion that the plea of the debtor that the promissory notes were assigned over in favour of the petitioning creditor by RM. Shanmugham were discharged was not acceptable. He found that the promissory note debts were due by the debtor, and that the petitioning creditor could therefore maintain the petition. On the question of the subsistence of an act of insolvency, the learned Judge referred to two decisions of this Court, one in Venkatakrishnayya v. Malakondayya, 1942-1 Mad LJ 38 : (AIR 1942 Mad 306) and the other an unreported decision in 0. S. A. 38 of 1960. The learned Judge took the view that the decision of a Bench of this Court in Appavu Mudaliar v. T.K. Ratna Mudaliar, O.S.A. No. 38 of 1960 is not in conformity with the Bench decision in 1942-1 Mad LJ 38 : (AIR 1942 Mad 306). He directed that the papers be placed before the learned Chief Justice for being placed before a Division Bench in view of the conflict of judicial opinion in the matter. By order of the learned Chief Justice, the matter has now been placed before us.

3. The liability of the debtor under the two promissory notes, which have been marked as Exs. P. 2 and P.3 in the case, is beyond question, particularly in view of the definite finding of the learned Judge, Kailasam J. It is not open to us to go into that question at this stage, and we must mention that the learned counsel for the debtor quite properly did not seek to canvass that finding before us. The only question that has been debated before us centred on the availability of an act of insolvency due to the attachment of the debtors properties in execution of a money decree in O. S. No. 1703 of 1961 on the file of the City Civil Court, Madras.

4. It will now be convenient to refer to the various proceedings in the suit 0. S. No. 1703 of 1961, City Civil Court, Madras. That suit was filed by one Meyyappa against the debtor for recovery of a substantial amount due to him. On 10-8-1961, Meyyappa filed an application, I.A.No. 1174 of 1961 praying for attachment before judgment of three items of properties belonging to the debtor in the city of Madras. The Court granted an interim attach