The court upheld that a business is considered active until all debts are paid, establishing the court's jurisdiction based on the debtor's previous business activities despite claims of inactivity.

1. The debtor, one Girdharlal Shankar Dave, has taken out two Notices of Motion both dated 18th November 1965, one of which is for setting aside the order of adjudication passed in petition No. 69 of 1965 against the debtor on 19th October 1965 and the other for setting aside the insolvency notice dated 18th May 1965 which was issued at the instance of the petitioning creditors against the debtor. The admitted facts are that the debtor carried on business in Bombay as a partner in the firm of M/s J. M. Dave and Co. in export and import. The petitioning creditors filed a suit No. 193 of 1961, in this Court against the said firm of M/s J. M. Dave and Co. in respect of certain amounts borrowed by the said firm from the petitioning creditors for the purpose of its business. On 22nd August 1961 a decree on admission was passed in favour of the petitioning creditors against the said firm. On 18th May 1965 the petitioning creditors got issued an insolvency notice being No. N / 89 of 1965 against the debtor. On 10th June 1965 the petitioning creditors obtained an order for substituted service of the said insolvency notice against the debtor. On 22nd September 1965 the petitioning creditors filed a petition being Petition No. 69 of 1965 for an order of adjudication against the debtor and on 19th October 1965 an order of adjudication was passed against the debtor. In the affidavits filed by the debtor in support of the two Notices of Motion he has made certain allegations about his not having received the insolvency notice or notice of petition. At the hearing, however, Mr. Palan, for the debtor, made it clear that the debtor did not challenge the correctness of the order for substituted service which was obtained by the petitioning creditors or contend that the order of adjudication or the insolvency notice were bad on the ground of want of service. It may be pointed out that the registered packet containing the insolvency notice was returned by the postal authorities with an endorsement "Refused" made on 22nd June 1965. The disputes as to whether the debtor received the insolvency notice or the notice of the petition are not relevant because Mr. Palan has made it clear that the only ground on which he challenges both, the order of adjudication and the insolvency notice is that the Court had no jurisdiction either to issue the insolvency notice or to entertain the petition against the debtor.

2. The provision in the Presidency Towns Insolvency Act, 1909 , which deals with the question of restrictions on jurisdiction is S.11 and the relevant portion of that Section is as follows :
"The Court shall not have jurisdiction to make an order of adjudication unless -
(a)  xxxx xxxx xxxx
(b) the debtor, within a year before the date of the presentation of the insolvency Petition, has ordinarily resided or had a dwelling house or has carried on business either in person or through an agent within the limits of the ordinary original Civil jurisdiction of the Court".

3. Both the Notices of motion were called together with the consent of the parties and the parties have also agreed that as the same question is involved in both the Notices of Motion, the evidence taken should be treated as common. The evidence of the debtor, which had been taken on commission, was tendered in evidence and has been taken on record as Ex. A. In his evidence the debtor has stated that since May 1961 he has been residing at Calcutta, but that prior to that time he was residing in Bombay with his family in a flat in Khira Bhavan. The debtor stated that prior to May 1960 he was doing export - import business in Bombay as a partner in the firm of M/s J. M. Dave