APHC010527762016 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3311]

(Special Original Jurisdiction)

Wednesday, the twelfth day of February two thousand and twenty five Present The Honourable Ms. Justice B.S. Bhanumathi Civil Miscellaneous Second Appeal No:12 of 2016 Between:

Udumula Ramana Reddy ...Appellant and Gogireddy Narasa Reddy & 42 Others ...Respondents Counsel for the appellant:

1. T.V. Jaggi Reddy Counsel for the respondents:

None The Court made the following:

JUDGMENT

This appeal under Section 75 of the Provincial Insolvency Act, 1920, by the appellant / 1^st respondent / petitioner in I.P.No.17 of 2001 on the file of the Court of the Senior Civil Judge, Markapur, is preferred against the judgment and decree, dated 05.08.2015, passed in A.S.No.15 of 2012 on the file of the Court of VI Additional District Judge, Markapur, allowing the appeal setting aside the order, dated 12.07.2011, of the Senior Civil Judge, Markapur, in I.P.No.17 of 2001 adjudging the petitioner in the insolvency petition as an insolvent.

2. During the pendency of this appeal, the 3^rd respondent died and after his death, the legal representatives of the deceased 3^rd respondent were brought on record as respondents No.44 to 46, vide order, dated

23.10.2024, in I.A.No.3 of 2024.

3. Heard Sri T.V. Jaggi Reddy, learned counsel for the appellant. In spite of service of notice on respondents No.1 & 2, and respondents No.44 to 46, no appearance has been made. The other respondents are stated to be not necessary parties to this appeal.

4. The parties shall hereinafter be referred to as they are arrayed in the insolvency petition before the trial Court.

5. The facts, in brief, are as follows:

a. The petitioner is a permanent resident of Venkatareddipalli village of Pullalacheruvu Mandal, Prakasam district. He is engaged in the business of fertilizers and seeds in Yerragondapalem by borrowing debts from the creditors and investing in his business. The petitioner is separated from the joint family and residing separately and is unaware of the worldly affairs. He used to sell fertilizers and seeds on credit basis without obtaining any promissory notes for the said credit sales. The petitioner used to execute promissory notes at higher rate of interest for the amounts borrowed and renew the old promissory notes at the instance of his creditors. Most of the villagers who purchased fertilizers and seeds from his shop deceived him and failed to pay the amount. Consequently, the petitioner sustained heavy loss in the business and he has no properties of his own. The petitioner is not in a position to discharge the debts due to the respondents since the persons who borrowed fertilizers and seeds on credit basis from him failed to discharge the debts due to him. As such, he is not in a position to discharge the debts. Therefore, he filed the present petition to adjudge him as an insolvent.

b. The 6^th respondent filed his counter and the same was adopted by respondents Nos.1, 2, 4, 5, 7 to 9, 11, 12, 14, 20, 23 and 25 by filing a joint memo.

c. The contesting respondents denied the material averments in the petition and contended that the petitioner constitutes a member of Hindu undivided joint family consisting of himself, his father and brothers and the joint family owns extensive properties. The petitioner is an educated person. The father of the petitioner is an old and illiterate person and unable to manage the affairs of the joint family. The petitioner who acted as manager of the joint family borrowed debts from the creditors and when the creditors approached the father of the petitioner, he promised to discharge the debts by selling some of the joint family properties. Thereafter, the father of the petitioner also resiled from the said agreement. Consequently, some of the creditors filed suits. The respondents Nos.1 and 6 have filed suits in O.S.Nos.23 of 2001 and 24 of 2001 before the Court of the Senior Civil Judge, Markapur, for recovery of money. Thereafter, at t