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Duraiswami Chettiar Vs. Abdul Suban Sahib and Abdul Sukur Sahib Company and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1932Mad237; 137Ind.Cas.390; (1932)62MLJ234
AppellantDuraiswami Chettiar
RespondentAbdul Suban Sahib and Abdul Sukur Sahib Company and ors.
Cases ReferredChhatrapat Singh Dugur v. Kharag Singh Lachmiram
Excerpt:
- - to pass an adjudication order on a petition like this would be useless and oppressive (see 1 q. section 25 relates to the dismissal of the petition and clause (2) of that section says that in the case of a petition presented by a debtor, the court shall dismiss the petition if it is not satisfied of his right to present the petition. these sections show that the debtor has a statutory right of getting himself adjudicated an insolvent if he satisfies the provisions of section 10 and that the court can refuse adjudication only if it is not satisfied of his right to present the petition......to prove before he is adjudicated insolvent. the conditions which should be complied with by a debtor presenting an application for adjudication are mentioned in section 10 of the act. according to this section he must prove that he is unable to pay his debts and that his debts amount to rs. 500 or that he is under arrest or imprisonment in execution of the decree of any court for the payment of money or that an order of attachment in execution of such a decree has been made and is subsisting 'against such property.' no reference is made to the possession of assets as one of the conditions for presenting a petition. section 24 of the act prescribes the procedure to be followed by the judge at the time of the hearing of the petition. it is stated there that the court shall require.....
Judgment:

Madhavan Nair, J.

1. This is an appeal against an order of the learned District Judge of South Arcot refusing to adjudicate the appellant an insolvent. The appellant presented an application on the 9th February, 1924, for getting himself adjudicated an insolvent. That was dismissed by the Official Receiver for default. A second application filed by him was also dismissed as he and his pleader were absent. The present application was the third one. The petition disclosed no assets and the learned District Judge held 'that this is a case in which adjudication ought not to be made as the petition discloses no assets nor any reasonable prospect of future assets. To pass an adjudication order on a petition like this would be useless and oppressive (see 1 Q.B. 50). The Insolvency Act would appear to proceed on the assumption that there would be at least some assets.' On these grounds he dismissed the application.

2. It appears to us that the possession of assets does not seem to be a condition necessary for a debtor to prove before he is adjudicated insolvent. The conditions which should be complied with by a debtor presenting an application for adjudication are mentioned in Section 10 of the Act. According to this section he must prove that he is unable to pay his debts and that his debts amount to Rs. 500 or that he is under arrest or imprisonment in execution of the decree of any Court for the payment of money or that an order of attachment in execution of such a decree has been made and is subsisting 'against such property.' No reference is made to the possession of assets as one of the conditions for presenting a petition. Section 24 of the Act prescribes the procedure to be followed by the Judge at the time of the hearing of the petition. It is stated there that the Court shall require proof that the creditor or the debtor, as the case may be, is entitled to present the petition, i.e., we must take it that in this case the petitioner must prove that the conditions mentioned in Section 10 existed. Section 25 relates to the dismissal of the petition and Clause (2) of that section says that in the case of a petition presented by a debtor, the Court shall dismiss the petition if it is not satisfied of his right to present the petition. Section 27 says that if the Court does not dismiss the petition, it shall make an order of adjudication. These sections show that the debtor has a statutory right of getting himself adjudicated an insolvent if he satisfies the provisions of Section 10 and that the Court can refuse adjudication only if it is not satisfied of his right to present the petition. In support of his opinion the learned Judge refers to 1 Queen's Bench, page 50. We are not able to trace this case. If he meant to rely on Ex parte Painter. In re Peinter (1895) 1 Q.B. 85 in support of his argument that there should be some assets disclosed in the petition before proceeding with it, then that decision does not support him. The view that we have taken receives support from the Privy Council decision in Chhatrapat Singh Dugur v. Kharag Singh Lachmiram , though in that case the petition was dismissed on the ground that it was an abuse of the process of the Court. The observations of their Lordships in that case show that the debtor has a statutory right to get himself adjudicated an insolvent if he complies wi,th the provisions of Section 10; we therefore set aside the order of the Lower Court and direct the learned Judge to take the petition on his file and dispose of it according to law in the light of our observations. In the circumstances of the present case we make no order as to costs.


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