Skip to content


Vassanji Mulji Vs. Mulji Ranchhod Ved - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 9 of 1926 and Petition for Inslovency No. 1233 of 1925
Judge
Reported in(1926)28BOMLR677
AppellantVassanji Mulji
RespondentMulji Ranchhod Ved
DispositionAppeal allowed
Excerpt:
presidency towns insolvency am (iii of 1909), section 9, clause (g)-act of insolvency -petition containing allegations not in accordance with the requirement of the act-petition incompetent-suspension of payment without notice to creditors not sufficient-declaration of inability to pay to creditors-declaration not communicated to creditors-notice.;for an act of insolvency, under section 9, clause (g), of the presidency towns insolvency act, 1909, it is necessary that there must be a notice given by the debtor to any of his creditors that he has suspended or that he is about to suspend payment of his debts.;if an act of insolvency, as defined in section 9 of the presidency towns insolvency act, is not set out in the petition, then the petition is incompetent. it is not correct for..........an act of insolvency as partners in the firm, coming within section 9 (g) of the presidency townsinsolvency act. no doubt, the decision of the question depends upon the facts as proved in each case, but the question whether such an act of insolvency has been committed or not has been the subject of numerous decisions, some of which are very hard to reconcile and which, as the learned judges have themselves stated, in some cases, are very difficult to appreciate. my difficulty in this caseis also increased by the fact that the act in (b) is not put in the proper form in which it ought to have been put . if, then, a particular act of insolvencyis not alleged as coming within the four corners of the provisions of section 9 of the presidency towns insolvency act, the court would have.....
Judgment:

Norman Macleod, Kt., C.J.

1. This is an appeal against an order of Mr. Justice Taraporewalla adjudicating certain persons insolvents, under the Presidency Towns Insolvency Act, on the petition of a creditor, one Mulji Ranchhod, Various acts of in-solvency were alleged in the petition. The Judge considered that none of the acts mentioned had been proved except the act alleged under heading (6), viz,:-

That with intent to defeat and delay their creditors bhe saidVasanji Mulji and Daraodar Kallianji have suspended payment since the early part of June 1925 and had declaredtheir inability to meet their creditors and had for that reason been declared defaulters by the Native Share and stock Brokers Association on June 17, 1925.

2. Section 9 of the Presidency Towns Insolvency Act deals with acts of insolvency. By Clause (g) it is an act of insolvency ' if the debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts.' It was necessary, then, for the creditors to allege that the debtor had committed an act of insolvency as defined in Clause (g). Instead of doing so, they alleged that the debtor had done something entirely different which was not an act of insolvency at all. The Judge said :-

Coming to the act in (b) I have, after a very anxious consideration, come to the conclusion that the insolvents have committed an act of insolvency as partners in the firm, coming within Section 9 (g) of the Presidency TownsInsolvency Act. No doubt, the decision of the question depends upon the facts as proved in each case, but the question whether such an act of insolvency has been committed or not has been the subject of numerous decisions, some of which are very hard to reconcile and which, as the learned Judges have themselves stated, in some cases, are very difficult to appreciate. My difficulty in this caseis also increased by the fact that the act in (b) is not put in the proper form in which it ought to have been put . If, then, a particular act of insolvencyis not alleged as coming within the four corners of the provisions of Section 9 of the Presidency Towns Insolvency Act, the Court would have to dismiss the petition. It was strenuously argued before me that the act in (b) as stated in the petition, did not put forward the ground as required by Section 9 (g) of the Presidency Towns Insolvency Act. No doubt, it does not literally comply with that provision, and at the first hearing of this petition, counsel for the petitioning creditor made an application for amendment. I refused leave to amend, and expressed my opinion that if the words were capable of the construction which would bring them within Section 9 (g), I would consider the ground on the merits; and the amendment in that case would not be necessary, but that if the words by themselves did not import the ground under Section 9 (g), then it would be against all the principles of bankruptcy practice to allow the amendment. I have given anxious consideration to the wording of the act in (b) and I express my very strong disapproval of the way in which it has been framed. But I am of opinion that in the ends of justice I ought not to allow the mere verbal defects to come into the way of the petitioning creditor, if he has succeeded in making out a case, for holding that an act of insolvency coming under Section 9 (g) of the Presidency Towns Insolvency act has been committed by the debtors, and the said act is sufficiently put forward in the petition.

3. We think that was not the right way to deal with the acts of insolvency alleged in the petition, because, when the Act lays down directly that the only available acts of insolvency are those mentioned in Section 9, no other acts can be said to come within the purview of the section. If an act of insolvency as defined in Section 9, is not set out in the petition, then the petition is incompetent. It is not correct for a creditor to make various allegations of acts which are not acts of insolvency as defined in the section, and then endeavour to prove by evidence that, as a matter of fact, an act of insolvency, as defined in Section 9, had been committed. A man may suspend payment, but if he does not give notice to his creditors, then that is not an act of insolvency. Again, a man may declare his inability to meet his creditors, but, unless he declares such inability to one of his creditors, that is not a notice that he has suspended, or is about to suspend, payment of his debts. It is not a question of mere verbal defects coining in the way of a petitioning creditor. Under heading (b), no act of insolvency is alleged, so that the petition, as soon as it was found that all the other acts alleged had not been proved so as to support the adjudication order, should have been dismissed, and it would not have been necessary to go into a lengthy discussion as regards the English cases on the question whether as a matter of fact what the insolvents had actually done amounted to an act of insolvency as defined in Section 9 (g).

4. The appeal, therefore, must be allowed, and the petition dismissed, but as the appellants do not ask for costs, there will be no order as to costs throughout.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //