The main legal point established in the judgment is that the interpretation and application of the legal provisions of the Provincial Insolvency Act, including Section 9(1)(c) and Section 10, are crucial in determining the validity of an insolvency petition and the rights of the creditors.

JUDGMENT

(Prayer: This Civil Miscellaneous Appeal is filed under Section 75 of Provincial Insolvency Act, against the order, dated 09.09.2021, passed in I.A.No.20 of 2018 in I.P.No.37 of 2017, on the file of the Additional District Judge (FTC), Theni.)

1. This Civil Miscellaneous Appeal has been filed against the order, dated 09.09.2021, passed in I.A.No.20 of 2018 in I.P.No.37 of 2017, on the file of the Additional District Judge (FTC), Theni. The appellant herein is the respondent in I.A.No.20 of 2018 and creditor-petitioner in I.P.No.37 of 2017. The respondent herein is the petitioner in I.A.No.20 of 2018 and third respondent in I.P.No.37 of 2017.

2. Brief substance of the petition filed by the petitioner, in I.A.No.20 of 2018 in I.P.No.37 of 2017, is as follows:

2.1. The petitioner is the third respondent in I.P.No.37 of 2017. The main petition was filed by the respondent, to adjudicate the first respondent in the main petition as insolvent and to vest his properties, as on the date of the filing of I.P. No. 4 of 2015 in the hands of the official receiver for sale and an equitable distribution of proceeds amongst his creditors in accordance with law and costs. There was no specific Act of insolvency. The legal requirements and ingredients as per law are not fulfilled and hence, the main insolvency petition is not maintainable, either on facts or on law. The remaining two persons, namely, Ram Prasath and Shanmugam Velsamy, who were alleged to have entered into a lease agreement along with the respondent herein, were not added as parties to the proceedings and the amount due to them can be claimed only by all of them jointly and the claim is barred by limitation. The property mentioned in the petition was purchased, on 11.04.2016, by the respondents 3 to 5, mentioned in the I.P.No.4 of 2015. Item No.1 of the schedule B property was mortgaged with Axis Bank, Theni Branch and major part of the sale consideration was paid to redeem the property. If the respondent has a right to question the alienations the same should be only within three months as per Section (9) (1) (c) of the Insolvency Act. At least within a period of one year from the date of alienation, if the transaction is fraudulent. The respondent has obtained an encumbrance certificate on 26.06.2016. The petition in I.P.No.37 of 2017 ought to have filed within three months from the date of sale deed or within one month from the date of receipt of the encumbrance certificate.

2.2. The respondent in I.A.No.37 of 2017 and his brother had filed a complaint before the District Crime Branch, in Crime No.2 of 2015 and the case was taken on file in C.C.No.266 of 2016, pending before the Chief Judicial Magistrate, Theni. I.P.No.37 of 2017 was filed only on 09.07.2017, that is, after the limitation period, not within one year from the date of knowledge and the petition to be dismissed at the threshold as the petition is not maintainable.

3. Brief substance of the counter filed by the respondent, in I.A.No.20 of 2018 in I.P.No.37 of 2017, is as follows:

The respondent herein has filed the petition in I.P.No.37 of 2017 to adjudicate the first respondent in the main petition as insolvent and to vest his property as on the date of filing of I.P.No.4 of 2015 in the hands of the Official Receiver for sale and an equitable distribution of proceeds amongst his creditors. The first respondent in the main petition filed an insolvent petition under Section 10 of the Provincial Insolvency Act, in I.P.No.4 of 2015 before the Principal District Judge, Theni, to declare him as an insolvent. That petition was dismissed for default. The Act of insolvency committed by the first respondent, by name, Vignesh Gandhan, is a continuing one that he himself has moved a petition, for restoration of I.P.No.4 of 2015, hence, the respondent in I.A.No.20 of 2018 was mentioned as creditor No.101 in I.P.No.4 of 2015. Hence, the respondent herein is entitled to file I.P.No.37 of 2017. The sai