1. This is an appeal arising out of the dismissal of an application in insolvency. The applicant was a creditor of the respondent, Atwargir. The applicant alleged that the said Atwargir was indebted to him in a sum far exceeding Rs. 500, and further, that Atwargir had committed an act of insolvency by transferring certain property with intent to defeat the applicant's claim. It was alleged that the transfer was effected in the following manner: that Atwargir brought a collusive suit claiming certain property from one Musammat Baldevi, which suit he proceeded to compromise in such a manner that a decree might be passed having the effect of leaving Musammat Balievi in possession of the property and preventing Atwargir from ever claiming the same from her. On notice being issued to Atwargir, the latter presented an application admitting the debts set forth by the applicant and asking for an enquiry by the Insolvency Court. The District Judge has dismissed the application, holding that there hns been no act of insolvency on the part of the debtor, Atwargir. He has done this without any inquiry into the facts. He seems to have been of opinion that under no circumstances could the institution of a collusive suit and subsequent withdrawal from or compromising of the same, even though this transaction was carried out with the express object of putting another party in possession of immoveable property, amount to a transfer of property by an insolvent within the meaning of Clause (6) of Section 4 of the Provincial Insolvency Act, III of 1907. We do not accept this view of the law. In our opinion the Court below should have made an enquiry into the facts alleged by the petitioner and should have disposed of the application in accordance with the result of that enquiry.
2. We set aside the order complained of and remand the case to the Court below, with directions that it be re-admittecl on to the file of pending applications and be disposed of on the merits. Costs of this appeal will be costs in the cause.