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Mathura Ram and anr. Vs. Baldeo Ram and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in80Ind.Cas.21
AppellantMathura Ram and anr.
RespondentBaldeo Ram and ors.
Excerpt:
.....be checked against the evidence and weighed in the balance. 'i do not know, you may be able or you may not, but i am not satisfied. ' as a general rule we should like a judge to be able to say:.....do not know, you may be able or you may not, but i am not satisfied.' as a general rule we should like a judge to be able to say: 'there is one piece of property realizable, there again is another piece of property which may be realized easily, there again is a flourishing business or stock, there again is a sum of money in the bank, and taking these matters into consideration and adding them up together and allowing for the difficulty of realization, i am statisfied that the debtor has liquid assets more than sufficient to pay his creditors'. the courts below must consider the matter from the point of liquid assets. a man may have property tied up either in land or securities, which, owing to the state of the market, he cannot realise and be insolvent although the face, value of his.....
Judgment:

1. We are afraid that it will become necessary to warn Judges that they must not seize on Sections 10 and 25 of the Provincial Insolvency Act as an excuse for getting rid of troublesome applications. There seems to be a danger of Provincial Insolvency Courts going from one extreme to the other. The provisions in Section 10 and Section 25 of the new Act were intended to prevent the abuse of debtors filing their applications as a method of evading liability of arrest, and getting out of payment of their debts. On the other hand it would appear that these Sections have been utilised on more than one occasion for getting rid of business before the District Judge, which is certainly not congenial and it gives a great deal of trouble to the Judge. We must press upon the lower Courts, that a finding that a Judge is not satisfied that the appellants are unable to pay their debts must be a finding arrived at like any other finding by a judicial tribunal in which the reason for so holding is stated in such a way that it may be checked against the evidence and weighed in the balance. It is not enough for a Judge to resort to a mere negative and say. 'I do not know, you may be able or you may not, but I am not satisfied.' As a general rule we should like a Judge to be able to say: 'there is one piece of property realizable, there again is another piece of property which may be realized easily, there again is a flourishing business or stock, there again is a sum of money in the bank, and taking these matters into consideration and adding them up together and allowing for the difficulty of realization, I am statisfied that the debtor has liquid assets more than sufficient to pay his creditors'. The Courts below must consider the matter from the point of liquid assets. A man may have property tied up either in land or securities, which, owing to the state of the market, he cannot realise and be insolvent although the face, value of his property may be more than his actual liabilities. Putting one's fingers on the weak spot in the judgment, the defect is that the Judge has said that he is 'far from being statisfied that the applicants were unable to pay their debts'. The statute requires him to be 'satisfied that he is able to pay,' and the learned Judge has given no reasons for being satisfied on that question of fact. Indeed he has not found it. The case must, go back to the lower Court for reconsideration on these lines.


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