The main legal point established in the judgment is the interpretation and application of Section 6 of the Provincial Insolvency Act, 1920 in determining acts of insolvency and the maintainability of the appeal by purchasers of the debtor's property.

1. The creditor, E.K.Gopal / petitioner filed I.P.No.40 of 2002, seeking to adjudge the first respondent, C.Manoharan, as insolvent. That petition was allowed with costs. Challenging the judgment, CMA No.10 of 2007 was filed by respondents 2 and 3 in I.P.No.40 of 2002 and the appeal was allowed and I.P.No.40 of 2002 was dismissed. Challenging the dismissal, the petitioner in I.P.No.40 of 2002 has preferred this Civil Revision Petition.

Brief facts:-

2. The first respondent, Manoharan, borrowed a sum of Rs.1,50,000/-from the petitioner for his business expense on 23.05.1999 and executed a promissory note. As promised, he did not repay the amount. The first respondent, with an intention to cheat and defraud the petitioner as well as other creditors, placed his assets beyond the reach of the creditors and towards that end, executed two sale deeds, in favour of respondents 2 and 3, on 28.11.2001, with regard to his entire properties. Respondents 2 and 3 purchased the properties knowing fully well about the debts due to the petitioner from the first respondent. The act of the first respondent would amount to an act of insolvency as contemplated under Section 6 of The Provincial Insolvency Act, 1920 (hereinafter will be referred to as the Act). Therefore, for the acts of insolvency committed, the first respondent has to be adjudged as insolvent.

2.1. The first respondent, though initially appeared, remained exparte subsequently.

2.2. The case of respondents 2 and 3 is that the petition-mentioned property originally belonged to one Kandappa Gounder (the grand father of the first respondent and his two brothers, in whose favour there had been a Will, dated 07.02.1985); there had been a suit for partition in O.S.No.232 of 1993 in which properties were allotted to the share of the first respondent and his two brothers, Rangaswamy and Selvam; all the three of them executed a power of attorney in favour of one Selvaraj on 02.04.2001 and respondents 2 and 3 purchased the property for a valuable consideration from the holder of power of attorney; the purchase was made after ascertaining that there was no debts due from the first respondent and his two brothers; after the sale was over, the first respondent demanded a sum of Rs.10,000/-and on refusal, the first respondent has instigated the petitioner to file this petition; the petitioner's counsel, by name, Anbarasu, had filed a criminal complaint in C.C.No.473 of 2002 before the learned Judicial Magistrate No. III, Erode, on the basis of two cheques, dated 15.01.2002 and 14.03.2002 and those debts are not mentioned in the Insolvency Petition; in any event, respondents 2 and 3 are bona fide purchasers for value and this petition has been filed to get unlawful gain.

3. The trial court considered the issue as to whether the first respondent had committed an act of insolvency within the meaning of Section 6 (b) of the Act and came to the conclusion that the debt due under the promissory note, Ex.A-1, has been clearly proved and that the act of the first respondent would amount to act of insolvency. So finding, the first respondent was adjudged as insolvent.

3.1. With regard to the contention of respondents 2 and 3 that they were bona fide purchasers for value, that issue was relegated to the separate proceedings under Section 53 of the Act.

4. The first appellate court reversed the findings of the trial court and whether the reversal is justified or not is the issue to be considered in this Civil Revision Petition.

5. The first contention of the Revision Petitioner is that the first appellate court should have held that the appeal filed by the purchasers of property from the debtor / insolvent is not maintainable. It is his contention that when the debtor himself has not filed any appeal challenging his status as insolvent, it is not for the purchasers to file the appeal challenging the finding that the first respondent / debtor is an insolvent.

6. Whether the finding