1. This second appeal arises out of an order in an insolvency case. The appellant who holds a decree in O.S. No. 22/37-38 on the file of the Subordinate Judge, Shimoga, against the respondent for Rs. 2855-7-0 made an application on 17-8-43 for declaring the respondent an insolvent. The respondent raised several objections which were negatived and the Subordinate Judge directed that he should be adjudicated. On appeal the District Judge of Shimoga reversed that order and dismissed the appellant's application on the ground that the respondent was able to pay his debts and he has come up in second appeal.
2. For the respondent, Mr. M. Ramachandra Rao, his learned counsel, has raised a preliminary objection to the hearing of this second appeal. He urges that under Section 75(1) of the Mysore Insolvency Act XI of 1925 which governs this case, only certain orders passed under the Act are subject to second appeal and that the present order, which falls under Section 25 of the Act, is not liable to be appealed against to the High Court. In support of that position he has relied on -- 'Wan Taik Ya v. M.S.S. Chettyar Firm', AIR 193S Rang 26 (A); -- 'Alagirisubba Naik v. Official Receiver, Tinnevelly', AIR 1931 Mad 745 (B) and -- 'Ghulam Rasul v. Kidar Nath', AIR 1934 Lah 807 (1) (C). The language of Section 75(1) and those cases clearly support the objection he has taken and a second appeal, therefore, does not lie in this case.
3. But Mr. Somasekhara Rau, learned counsel for the appellant, contends that nevertheless this Court may under Section 75(3) examine the order of the District Judge and determine about its legality and correctness, and that the present case is one in which such powers of revision ought to be exercised in favour of his client. He points out that this course has been adopted in -- 'AIR 1036 Rang 26 (A)'. In view of the past history of this case, and its facts and circumstances and the clearly incorrect way in which the matter has been decided by the learned District Judge, I am inclined to adopt that procedure.
4. The order of the District Judge cannot be sustained. He has held that there was sufficient ground in law for the appellant, a creditor of the insolvent, to base his application. Indeed he was bound to do so as this matter has been finally decided between the parties by this Court as reported in -- 'Ramanna v. Syed Abbas Hussein', 52Mys HCR 373 (D). He, however, came to the conclusion that the respondent owned sufficient properties and was in a position to discharge his debts and therefore under Section 25 of the Insolvency Act the Court would be justified in dismissing the application for insolvency. This particular ground, viz. that the respondent was able to pay off his debts was never taken in the objection statement filed before the Subordinate Judge, the ground relied on then being that the sale of the house in Bhadravati which was in execution of a decree for arrears of assessment was not an act of insolvency and did not afford a ground to the creditor for making the application. Though the appellant's application was made so far back as in August 1943, right clown till December 1949 when the District Judge made his order or even till today the respondent has not been able to pay off his debt or even the smallest portion of it. This, I think, would not be an improper test to determine about the bona fides of such a claim. (After considering the evidence his Lordship proceeded:) The learned District Judge appears to have had no evidence at all before him to come to the conclusion he has done, and for that reason alone his order is liable to be set aside even in revision. Moreover, there is another observation by the learned District Judge in his judgment which clearly shows that he has not properly directed himself in the disposal of this case. In the concluding paragraph of his judgment he has observed that if the appellant cannot recover the amount due to him by proceeding against other properties of the respondent 'it is yet open to him to 'press his petition' for the appellant being adjudged insolvent'. He has apparently lost sight of the fact that then there would be no petition to press and it would be useless for the appellant to present another application which would be long after the alleged collusive sale in favour of the respondent's second wife and which would be of no use to him even if he showed that this alienation ought to be set aside.
5. In the result this appeal is allowed and the order of the learned District Judge is set aside. The respondent will pay the costs of the appellant in this Court (Advocate's fee Rs. 15/-).
6. Appeal allowed.