A debtor-petitioner must prove his inability to pay debts as a pre-requisite for adjudication as an insolvent under Section 10(1) of the Provincial Insolvency Act, and the proviso to Section 24(1)(a) does not dispense with this requirement.

GOPAL RAO EKBOTE, J.

( 1 ) THE respondent herein filed an application under Sections 10 (1) (c), 13 (1) and 20 of the Provincial Insolvency Act alleging inter alia that he is a debtor and is indebted to the persons mentioned in Schedule A. He has property mentioned in Schedule B. He being unable to discharge the debts, he wanted himself to be adjudicated as an insolvent.

( 2 ) THE petition was resisted by the 1st respondent therein. His main contention was that the debts contracted were bogus and the creditors were mostly the petitioners relatives. He asserted that the petitioner was in a position to pay the debts of the creditors. He asserted that the petitioner was in a position to pay the debts of the creditors. He sold some of the property and therefore he had cash also.

( 3 ) THE learned Subordinate Judge after making a proper enquiry held that the petitioner is in a position to discharge the debts and as a result dismissed the application.

( 4 ) AGGRIEVED by that order of the learned Subordinate Judge, the petitioner carried the matter in appeal, C. M. A. No. 29 of 12968 to the District Judge. The leaned Additional District Judge reversed the order of the trial Court mainly on the ground that the debtor-petitioner has a statutory right to be adjudged an insolvent and his petition cannot be dismissed merely because he does not disclose his assets. In other words, the learned Additional District Judge found that it is unnecessary for the petitioner-debtor to prove that he is unable to discharge the debts in order to get an order of adjudication in his favour.

( 5 ) 1st respondent to the petition therefore filed C. R. P. No. 92 of 1970 in this Court. Ramachandra Raju. j. has referred the case to a Bench as he was of the opinion that Venkata Janikamma v. Venkateswara Rao, 1955 ALT 14 requires reconsideration. Rao, 1955 ALT 14 requires reconsideration. He thought that the said decision has followed Charapat Singh Dugar v. Kharaj Singh Lachirma, ILR 44 Cal 535 = (AIR 1916 PC 64), a decision given under the previous Provincial Insolvency Act and the change brought about in Section 10 was not noticed by the learned Judge who decided that case.

( 6 ) SECTION 10 (1) in so far as it is relevant reads as under: "a debtor shall not be entitled o present an insolvency petition, unless he is unable to pay his debts and----------"a debtor shall not be entitled to present an insolvency petition, unless he is unable to pay his debts and--- (a) his debts amount to five hundred rupees: or (b ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . the proviso to Section 24 (1) (a) may also be read: The Provided that, where the debtor is the petitioner, he shall, for the purpose of proving his inability to pay his debts be required to furnish only such proof as to satisfy the Court that there are prima facie grounds for believing the same and the Court, if and when so satisfied, shall not be bound to hear any further evidence thereon. "

( 7 ) WHATEVER may have been the position under the old Act, Section 10 makes it abundantly clear that a debtor shall not be entitled to present an insolvency petition unless it is proved that he is unable to pay his debts. It is therefore an essential pre-requisite for debtor-petitioner to get an order of adjudication to satisfactorily establish that he is unable to pay his debts. That requirement of Section 10 therefore has to be necessarily satisfied by the debtor.

( 8 ) WHAT all the proviso to Section 24 (1) (a) says is that the debtor-petitioner shall be required to furnish only such proof as to satisfy the Court that there are prima facie grounds for believing that he is unable to pay his debts. It vests discretion with the Court. Unless the Court is satisfied that there are prima facie grounds for believing that a debtor petitioner, for the purpose of proving his inability to pay his debts, has furnis

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