The Insolvency Court has the power to enquire into the genuineness of the debts denied by the debtor and can go behind a judgment debt and enquire into the consideration for the judgment debt.

1. This is a revision by Shriram hereafter called the debtor, against the order, dated 7-11-1951, of the District Judge, Akola confirming the order of adjudication passed by the Civil Judge, Class I, Khamgaon.

2. The facts are these Saolaram, hereafter called the creditor, obtained a decree for Rs. 2,440/- in civil suit No. 41-B of 1947 on 1-5-1947 against the debtor. The debtor has also executed a bond, dated 24-9-1947 for Rs. 2,275/- in favour of the creditor who has instituted a suit (civil suit No. 60-B of 1948) for recovery of the amount due on the bond and the suit is pending. The creditor has filed another suit (civil suit no 59 B of 1948) on a second bond dated 25-12-1947, for Rs. 1,085/- and that suit is also pending. Further, the creditor is an assignee of a decree for Rs. 375/- in civil suit No. 347 of 1947 against the debtor.

3. The creditor filed a petition under Section 9 of the Provincial Insolvency Act on 13-1-1949 for adjudging the debtor as insolvent and for appointment of a receiver. He alleged that the debtor was indebted to him to the extent of Rs. 6.175/-. He had committed two acts of insolvency. Firstly, he had filed a compromise petition in the High Court in First Appeal No. 49 of 1947 arising out of a suit for partition and separate possession filed by him and his mother against his uncle Sakharam Tukaram and the compromise provides that the debtor would not prosecute the appeal and the judgment of the trial Court would stand.

According to the creditor the compromise is fraudulent and collusive with an intention to defeat and delay the creditors of the debtor. The Second act of insolvency consists of an execution of a karar kharedikhat by the debtor on or about 6-12-1948 in favour of his uncle. This was done to defeat and delay the claims of the creditors.

4. The petition was opposed by the debtor who denied that he was indebted to the extent of Rs. 6,175/-. Regarding the decree, he stated that it was collusive and fraudulent while the bonds executed by him were also bogus, fraudulent and without consideration and were, therefore, void. He denied that he had committed any act of insolvency. He averred that the compromise was genuine and the transfer in favour of his uncle Sakharam. Tukaram was intended to be a mortgage and. was made for the purpose of enabling him to carry on agricultural business and to meet the expenses of litigation.

5. The first Court did not enquire into the allegations of the debtor in respect of the debts. It only examined the acts of insolvency alleged by the creditor. It found that the act; of withdrawal of the appeal by the debtor was not an act of insolvency, but regarding; the transfer to Sakharam it held that it was. made with the intention to defeat or delay the creditors and was an act of insolvency on the part of the debtor under Section 6(b) of the Act The debtor was, therefore, adjudged insolvent.

6. The debtor took the matter in appeal. Regarding the debts, the lower appellate Court observed:

The debtor has failed to show that the debts were bogus. He was, therefore, clearly indebted to more than Rs. 500/-.

Regarding the act of insolvency, its conclusion was the same as that of the trial Court.

7. The contention of Shri Kaiele, learned Counsel for the debtor, is that it was the duty of the Court to enquire into the existence of the alleged debts due to the creditor. The lower appellate Court was also wrong in assuming that the debts exceeded Rs. 500/- without proof. He says that the transfer was not a sale and did not in any way prejudice the rights of the creditor. The property was already under attachment and the creditor was not affected by the transfer by reason of Section 64, Code of Civil Procedure. Further, as the transfer ac-cording to the creditor was bogus, it could not amount to an act of insolvency and there was no intention to defeat or delay his creditors.

8. When this case first came up before us, the non-Applicant creditor was not represented. As an imp