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Muthu K.R.V. Alagappa Chettiar Vs. Nagindas Fulchand Chinoy - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 10 of 1926 and Petition for Insolvency No. 1508 of 1925
Judge
Reported in(1926)28BOMLR680
AppellantMuthu K.R.V. Alagappa Chettiar
RespondentNagindas Fulchand Chinoy
DispositionAppeal allowed
Excerpt:
.....act of insolvency had been committed, must definitely allege what available act or acts of insolvency were committed as detailed in section 9 of the presidency towns insolvency act, 1909. it is not sufficient to make some vague allegations in the petition, and then endeavour by means of evidence to prove that certain available acts of bankruptcy have been committed.;where there was no allegation in the petition of the petitioning creditors that the debtor had given notice of suspension to any of his creditors, but all that was alleged was that certain creditors went to the place of business of the debtor and were told by the agent of the debtor that his principal had stopped payment :-;that such statement by the agent would not be a notice of suspension by the debtor, since, in..........of the branches of the said chettiar's business were in insolvent circumstances and was made to defraud the creditors; and (c) that with intent to defraud the creditors of the said firm he stopped payment to the creditors since the last three months. all the petitioners, who sent their men to call for the money due to them, were given a reply by his agent, nagalingam pillai, in charge of the bombay firm, that his master had stopped payment, and that as no remittances were sent to him from his master at madura he was unable to make any payment whatsoever,2. the last paragraph of the petition does not allege any act of insolvency. it states that in the month of september 1925 the said firm intimated to messrs. ramchandra ranchhoddas the second petitioners, by their letter of july 25,.....
Judgment:

Norman Macleod, Kt., C.J.

1. On November 2, 1925, a petition was presented in this Court alleging that one Muthu K.R.V. Alag-appa Chettiar of Madura, who carried on business at various places including Bombay, had committed certain acts of insolvency within three months of the date of the petition, in that (a) he had mortgaged one of the properties belonging to him at Madura for Rs. 18,000 to a creditor, Messrs. Jhaverchand Gumanchand, as security for their debt of Rs. 25,000; (b) that the said mortgage was executed when many of the branches of the said Chettiar's business were in insolvent circumstances and was made to defraud the creditors; and (c) that with intent to defraud the creditors of the said firm he stopped payment to the creditors since the last three months. All the petitioners, who sent their men to call for the money due to them, were given a reply by his agent, Nagalingam Pillai, in charge of the Bombay firm, that his master had stopped payment, and that as no remittances were sent to him from his master at Madura he was unable to make any payment whatsoever,

2. The last paragraph of the petition does not allege any act of insolvency. It states that in the month of September 1925 the said firm intimated to Messrs. Ramchandra Ranchhoddas the second petitioners, by their letter of July 25, 1925, that for the present they were not in a position to meet their liabilities and make payment to their creditors. Two affidavits were put in, in support of the petition, but no further particulars were given in those affidavits. They only confirmed the several statements made in the jointpetition.

3. On the presentation of the petition to the Court an ex parte order for the adjudication of the debtor was made. The debtor then applied to have the adjudication order annulled. The Judge found that the mortgage, which was alleged in the petition to have been executed in order to defraud the general body of the creditors, was not so executed, but he refused toany the adjudication on the ground that, the debtor had given notice to one or more of his creditors that he had suspended, or was about to suspend, payment of his debts. There is no allegation in the petition of such an act of insolvency, as is referred to in Section 9 (g) of the Presidency Towns Insolvency Act. In my opinion, it is absolutely necessary that an application for the adjudication of a debtor by a creditor, on the ground that an available act of insolvency had been committed, must definitely allege what available act or acts of insolvency were committed as detailed in that section. It is not sufficient to make some vague allegations in the petition, and then endeavour by means of evidence to prove that certain available acts of bankruptcy have been committed,

4. The cases which have been referred to in the lower Court are cases in which the question was whether on the evidence the debtor had given notion of suspension to his creditors. In this case I do not think it is necessary for us to touch that question, because, in my opinion, there is no allegation in the petition that the debtor gave notice of suspension to any of his creditors. All that was alleged was that certain creditors went to the Bombay office, and ware told by the agentNagalingam Pillai that his master had stopped payment. That would not be a notice of suspension by the debtor, since, in the ordinary course, an agent does not have an authority within the general scope of his agency to commit an act of insolvency on behalf of his principal That appears to be the simple issue in the case. We cannot agree with the learned Judge, as we think that the adjudication order should be annulled.

5. We must allow the appeal and dismiss the petition with costs throughout.


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