IMPORTANT POINT
A suit for recovery of money is maintainable even if insolvency proceedings are pending, provided the adjudication has not yet occurred.

JUDGMENT :

M.G. PRIYADARSINI, J.

This Second Appeal is filed by defendant Nos.1 and 3 challenging the judgment and decree dated 31.12.2002 passed in A.S.No.358 of 2001 on the file of the learned X Additional Chief Judge, City Civil Court, Hyderabad, confirming the judgment and decree dated 17.07.2001 passed in O.S.No.5695 of 1998 on the file of the learned VI Junior Civil Judge, City Civil Court at Hyderabad. Thus, the present Second Appeal is filed against the concurrent findings of trial Court as well as first Appellate Court.

2. For the sake of convenience, the parties hereinafter are referred to as they are arrayed before the trial Court.

3. The brief facts of the case, which necessitated the appellants/defendant Nos.1 and 3 to file the present appeal, are as follows:

a) The plaintiff filed O.S.No.5695 of 1998 against defendant Nos.1 to 3 for recovery of money. The brief averments of the plaint are that the plaintiff is the proprietary concern doing wholesale saree business situated at Patel market, Hyderabad.

The defendants are carving on business in the name and style of “Sri Srisha Cloth Emporium) and they used to purchase the sarees on credit basis from the plaintiff. Whenever the defendants purchase saree from the plaintiff, a cash credit memo being issued to the defendants stating about the number of the items purchased and total value of the items. When the defendants paid amounts, the plaintiff used to issue receipt in favour of the defendants. The defendants, who are wife and husband, made last payment to the plaintiff on 16.06.1998 and there was a balance of Rs.74,503/- with interest. The defendants avoided to pay the balance on one pretext or the other despite request of the plaintiff. Hence, the suit.

b) In reply to the plaint averments, the defendant Nos.1 and 3 filed written statement, which was adopted by defendant No.2. The brief averments of the written statement filed by the defendant Nos.1 and 3 is that the business of defendant No.1 sustained losses for various reasons. As the creditors are harassing her, she has no other go except to file Insolvency Petition No.6/1998 before the Senior civil Judge at Sangareddy, Medak District. The plaintiff is one of the parties in the said Insolvency Petition. The Insolvency Court granted interim protection to the first defendant. As per the accounts of the first defendant, she is liable to pay Rs.40,420/- and not liable to pay Rs.74,503/-. The plaintiff is aware of the loss sustained by her and also filing of Insolvency Petition and the notice in the Insolvency Petitions were sent to him. When the plaintiff purposefully avoided to receive the same, the notices were affixed to the door. The plaintiff knowing about the Insolvency Proceedings with a malafide intention and to harass the defendant No.1 filed the suit on false grounds with false accounts. The plaintiff came to court with unclean hands. The brother of the plaintiff by name Sanjiv Agarwal was making regular visits to the defendants along with antisocial elements and threatening that they will kill the defendants. As Insolvency proceedings have already been commenced before filing of the suit, the present suit is not maintainable and the first defendant is not in a position to pay the amounts to the plaintiff. The plaintiff has suppressed the receipts issued by him for payments made by the defendants and thus, prayed to dismiss the suit.

c) Based on the pleadings of both sides, the trial Court framed the following issues:

1) Whether the plaintiff is entitled for recovery of the suit amount?

2) Whether the plaintiff is entitled for future interest at 30% per annum?

3) To What relief?

d) During the court of trial, the plaintiff got examined himself as PW2 and Exs.A1 to A8 were marked. On behalf of defendants, the first defendant was examined as DW1 and got marked Exs.B1 to B17.

e) The trial Court after considering the rival contentions, decreed the suit for Rs.65,938/- with future interest of 12% per annum in favour of pla