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Krishnappa Chetti Vs. Adimula Mudali - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Judge
Reported in(1897)ILR20Mad84
AppellantKrishnappa Chetti
RespondentAdimula Mudali
Cases ReferredAmthul Latheef Syed Onissa Begum Saheba v. Choonoolalji Sowcar O. S. Appeal No.
Excerpt:
contract act - act ix of 1872, section 23--unlawful agreement--promissory note given in fraud of insolvency law. - .....of the insolvent and the plaintiff's consent to the arrangement among the creditors. 2. by the promissory note the plaintiff secured for himself a larger payment than he was entitled to under the composition deed, and this was unknown to the other creditors.3. it is contended on plaintiff's behalf that the circumstance that the note was given by a third party and not by the insolvent rendered the transaction an innocent one as far as the law of insolvency is concerned.4. in our opinion it makes no difference whether the note is given by the insolvent or by a stranger if it is given with the insolvent's knowledge and as a part of an arrangement for securing to one creditor an advantage over the others. the ease is on all fours with knight v. hunt 5 bing. 432. the case cited amthul.....
Judgment:

1. The circumstances under which the promissory note was given by the defendant are stated in the reference. The consideration was the withdrawal of threatened opposition to the discharge of the insolvent and the plaintiff's consent to the arrangement among the creditors.

2. By the promissory note the plaintiff secured for himself a larger payment than he was entitled to under the composition deed, and this was unknown to the other creditors.

3. It is contended on plaintiff's behalf that the circumstance that the note was given by a third party and not by the insolvent rendered the transaction an innocent one as far as the law of Insolvency is concerned.

4. In our opinion it makes no difference whether the note is given by the insolvent or by a stranger if it is given with the insolvent's knowledge and as a part of an arrangement for securing to one creditor an advantage over the others. The ease is on all fours with Knight v. Hunt 5 Bing. 432. The case cited Amthul Latheef Syed Onissa Begum Saheba v. Choonoolalji Sowcar O. S. Appeal No. 16 of 1895 unreported is distinguishable, for there it was expressly found that there was no fraud.

5. Here the other creditors being ignorant of the arrangement must be taken to have been deceived.

6. Tiruvengadasami and Subbayya, Attorneys for Plaintiff.


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