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Shyamsundar Dwivedy Vs. Divisional Forest Officer - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal No. 29 of 1955
Judge
Reported inAIR1958Ori117; 24(1958)CLT167
ActsProvincial Insolvency Act, 1920 - Sections 10
AppellantShyamsundar Dwivedy
RespondentDivisional Forest Officer
Appellant AdvocateS.N. Dasgupta, Adv.
Respondent AdvocateS.C. Das, Adv. for ;Adv. General
DispositionAppeal allowed
Cases ReferredMoti Ram Prem Chand v. Kewal Ram Dharam Chand
Excerpt:
.....the petition cannot be dismissed merely because the petitioner failed to show that he was unable to pay his debts, especially when in the present case before me the only objection of the respondent is that he owns 1/5th -share in the joint family property, without stating the value of that 1/5th share. the respondent failed to prove the quantum of assets of the insolvent except stating that he (the insolvent) owned considerable property......loss incurred by the petitioner in business and any evidence that he has no share in the joint family property, there was no prima facie case in the petitioner's favour and that a prima facie case of insolvency had to be established by the petitioner. the petition was dismissed as the appellant failed to satisfy these conditions.4. mr. s.n. dasgupta, the learned counsel appearing for the appellant contends that the order of the learned district judge is contrary to law. he submits that the learned district judge ought to have held that on the evidence adduced by the appellant, he made out a prima facie case that he was unable to discharge his debts. he also contends that the learned district judge ought to have, on the strength of the decision in the case of bhagirath choudhry v. mt......
Judgment:

P.V. Balakrishnarao, J.

1. This appeal is filed against the order of the learned District Judge, Cuttack dismissing the application of the appellant to be adjudged an insolvent.

2. The appellant took a forest lease for Rs. 17,500/- on 13-9-50, paid two instalments due to the Government under that lease, but defaulted in payment of the balance amounting to about Rs. 8,900/-. In consequence of this default, certain proceedings were taken and the amount was sought to be realised by detention of the appellant in civil prison when he filed this insolvency application.

3. The Divisional Forest Officer through the Government Pleader opposed the application. The learned District Judge came to the conclusion that in the absence of 'any evidence about the real loss incurred by the petitioner in business and any evidence that he has no share in the joint family property, there was no prima facie case in the petitioner's favour and that a prima facie case of insolvency had to be established by the petitioner. The petition was dismissed as the appellant failed to satisfy these conditions.

4. Mr. S.N. Dasgupta, the learned counsel appearing for the appellant contends that the order of the learned District Judge is contrary to law. He submits that the learned District Judge ought to have held that on the evidence adduced by the appellant, he made out a prima facie case that he was unable to discharge his debts. He also contends that the learned District Judge ought to have, on the strength of the decision in the case of Bhagirath Choudhry v. Mt. Jamuni, reported in AIR 1927 Pat 188 (A), ordered the appellant to be adjudged an insolvent. It was held in the said case, as quoted in the judgment:

'At the stage of the application for adjudication no very careful inquiry is necessary with regard to the inability to pay debts. If the Court is satisfied that a prima facie case is establish-ed by the debtor, the Court will adjudicate him to be an insolvent; and the consideration of the further question as to whether there has been a concealment of property and as to title to property such as an inquiry into the benami character of a transaction or the jointness or separateness of a family is deferred till the stage when the discharge is applied for.'

In the present case before me, the contention of the Respondent was that the appellant owned 1/5th share in the joint family property. The appellant in his turn stated that his father gave him Rs. 5000/- towards his share which he invested in business and incurred losses. He also examined three witnesses who stated that it was decided that the appellant should be given Rs. 5000/- towards his share of the family property. The petitioner attempted to show to the Court below that on account of the losses in business he was unable to pay the sum of Rs. 8,900/- due to the opposite party. In the petition he stated that his only assets were the wearing apparel. The opposite party did not State the value of the 1/5th share, if any, of the petitioner in the joint family property. Under these circumstances. I am of opinion that the learned District Judge erred in coming to a conclusion that the petitioner had not proved that he was unable to pay his debts.

5. Mr. S.C. Das appearing for the Advocate-General strongly contends that the appellant (ailed to prove that the debts exceeded his assets and that he was unable to pay his debts. In support of the contention, he relied upon a decision of the Allahabad High Court in the case of Siya Ram v. Kishori Lal reported in AIR 1933 All 841 (B). In that case it was held by a Division Bench of the Allahabad High Court:

'The expression 'unable to pay his debts' means that the market value of the realisation of assets is less than the total amount of his debts.'

In the judgment delivered by Justice Rachhpal Singh with whom the other learned Judge agreed, except this bare statement no authorities or reasons were given in support of it. In my opinion, the existence of assets may not be the criterion to determine whether one is able to pay the debts or unable to pay the debts. Even though a man may own several assets, still he can be said to be unable to pay his debts if he cannot raise money by sale of those properties. The learned counsel also relied upon a decision in the case Moti Ram Prem Chand v. Kewal Ram Dharam Chand reported in AIR 1928 Lah 202 (C) in which it was held,

'Under the Act of 1920 it is a condition precedent to the presentation of an insolvency petition by a debtor that he must show that he is unable to pay his debts and if he fails to satisfy the Court of his inability to pay his debts his petition must under Section 25(2) be dismissed.' But in this case it is also held by the learned Judge delivering the judgment, 'At this stage the Court is not required to make a detailed or lengthy enquiry into the Alleged inability of the appellant to pay the debts. It is not intended that there should be a regular trial of this matter at the very outset'. In my opinion, the fact that the assets exceed the liabilities is colourless and will not disentitle the debtor to an order of adjudication. The petition cannot be dismissed merely because the petitioner failed to show that he was unable to pay his debts, especially when in the present case before me the only objection of the respondent is that he owns 1/5th -share in the joint family property, without stating the value of that 1/5th share. Admittedly the appellant is indebted to the respondent to the extent of about Rs. 9000/-. In the absence of any evidence as to the value of the appellant's interest in the joint family property, the learned District Judge was wrong in coming to a conclusion that the petitioner did not prove that he was unable to pay his debts or that he screened the properties. At this stage, it is enough if a prima facie case is made out. The petitioner examined three witnesses and he himself stated that he was unable to pay his debts. If the opposite party was certain that the petitioner had 1/5th share in the joint family property, the opposite party can prove before the receiver that those properties belong to the insolvent's estate, get the receiver to sell those properties and realise the amount.

6. In my opinion, therefore, the petitioner against whom proceedings for arrest are pending and who filed the application to adjudge him an insolvent, offered prima facie proof of his inability to pay his dues. The respondent failed to prove the quantum of assets of the insolvent except stating that he (the insolvent) owned considerable property. On these facts in my opinion, the learned District Judge erred in refusing to adjudge the appellant an insolvent. The order of the learned District Judge is therefore set aside, the appeal is allowed and the petitioner is adjudged an insolvent. The learned District Judge shall appoint a receiver to take possession of the assets of the insolvent. Time for application for discharge is six months. There will be no order as to costs.


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