A debtor cannot be declared insolvent if he possesses assets that can be liquidated within a reasonable time to pay off his debts.

( 1 ) THE appellant Pirthi has been adjudged insolvent. The respondent Budh Singh applied to the court for adjudging Pirthi an insolvent on the ground that Pirthi has taken a loan on pronote dated 10-1-1971 for Rs. 16,000/- bearing interest at the rate of 12 per cent per annum. The amount due, according to Budh Singh, was Rs 20,025/ -. It was asserted that the appellant had sold a major portion of his Bhumi-dhari property on 20-2-1973 in favour of Rura and Tilka sons of Mohan Lal and Inder Singh son of Daryao with an intent to delay and defeat the creditor. It was asserted that this sale deed had been effected by Pirthi after the filing of the Suit No. 65 of 1973 by the creditor in the Court of the Civil Judge, Muzaffar Nagar on 16-2-1973 for the recovery of the amount of the loan.

( 2 ) THE appellant contested the petition. He denied taking of loan of Rs. 16,000/- as alleged by the creditor. He also asserted that the sale deed had been effected in pursuance of an agreement of sale executed by him prior to the institution of the suit by the petitioner against him in the Court of the Civil Judge, Muzaffarnagar. The appellant further asserted that he possessed agricultural property worth about Rs. 20. 000/- and that he also had a Gher worth about Rs. 15,000/-, He denied having committed any act of insolvency.

( 3 ) THE Insolvency Judge found that the appellant had taken a loan on a pronote as asserted by the creditor. The Insolvency Judge further found that though the agreement to sell had been entered into between the debtor and the vendees on 15-2-1973, nevertheless such an agreement did not create an interest or charge in the properly and the sale was calculated to delay and defeat Ihe creditor. It further found that the land possessed by the appellant-debtor was un-irrigated land; whereas the land sold by him was irrigated land. The value of the land possessed by the appellant was held to be not more that Rs. 100/- per Bigha. It further took note of the fact that the creditor had filed the lease deed, Ex, 7, executed by the appellant which showed that one Bigha 19 biswas of land was sold for Rs. 500/- and the land sold was of the same quality as the land still possessed by the debtor-appellant. As regards the Notha, it found that it was practically of no value. It recorded a finding that the appellants assets were less than the amount of the debt The insolvency Judge also found that the fact that the value of the appellants assets might exceed his debt, was of no consequence if the debtor did not have liquid assets to pay of the debt For arriving at this conclusion the Insolvency Judge relied upon two decisions, namely a decision of nagpur High Court in the case of Gadi Bhi-kaji v. Govindrao Bapuji (AIR 1937 Nag 127) and a decision of Lahore High Court in the case of Bhagvan Dass v. Mahammad Nawaz Shah, (AIR 1939 Lah 349 ). The Insolvency Judge took note of the fact that in the suit filed by the creditor, respondent, the debtor-appellant had applied to the Court to pay the decretal amount in instalments. In the circumstances, the Insolvency Judge allowed the petition and adjudged Pirthi an insolvent.

( 4 ) AGGRIEVED, Pirthi has come in appeal. The learned counsel for the appellant has not challenged the finding that the appellant was indebted to the respondent and, therefore, we w. ould proceed on the basis that the appellant is, in fact, indebted to the respondent to the extent determined by the Insolvency Judge.

( 5 ) THE learned counsel for the appellant has, however, assailed the finding of the Insolvency judge that the appellant did not possess sufficient assets to pay his debt as incorrect. He pointed out that in the application for attachment of the appellants property the creditor had sought attachment of 5-5-0 of Bhumidhari land belonging to the appellant. The creditor had shown the value of the attached property at Rs. 16,000/- vide paper No. 35c. It is urged and rightly so that the creditor must ha