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Prabhulal Madhavlal Desai Vs. Jeshing Bhai Bala Bhai and Sons and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1942Mad86; (1941)2MLJ598
AppellantPrabhulal Madhavlal Desai
RespondentJeshing Bhai Bala Bhai and Sons and ors.
Cases ReferredC.A.P.C.S. Chettiar Firm v. V.V.R. Chettiar Firm I.L.R.
Excerpt:
- - 686. in that case the petition merely alleged that the debtors had given notice to the petitioners as well as to their other creditors that they had suspended or were about to suspend payment of their debts, but in the affidavit which verified the petition the deponent made this statement: the court has to be satisfied that there has been notice of suspension of payment or that the debtor has intimated to his creditors that he is about to suspend payment and the supporting affidavit is filed for that purpose. , held that the petition was sufficiently clearly worded and we are in full agreement with him......the petition three acts of insolvency were alleged namely: (1) with intent to defeat and delay the firm's creditors ramanlal had absented himself from the firm's usual place of business; (2) with similar intent he had secluded himself so as to deprive the creditors of the means of communicating with him and (3) the debtors had intimated that they had suspended payment of their dues. the learned judge sitting in insolvency (krishnaswami aiyangar, j.) has found that all these allegations are true. the appellant contends that the action of his partner in absenting himself from the place of business and in secluding himself cannot affect him, but he concedes, as he must, that if the appellant's partner gave notice of suspension of payment, the law allows both of them to be adjudicated. the.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The appellant and one Ramanlal Trikamlal Desai carried on business in partnership in Madras under the style of Prabhulal Madhavlal Desai. On the 14th October, 1940 the first and second respondents filed a petition in this Court asking for an order adjudicating the appellant and his partner insolvents. On the 17th February, 1941 an order of adjudication was passed. This appeal is against that order. It may be mentioned that the correctness of the order has not been challenged by Ramanlal.

2. In the petition three acts of insolvency were alleged namely: (1) with intent to defeat and delay the firm's creditors Ramanlal had absented himself from the firm's usual place of business; (2) with similar intent he had secluded himself so as to deprive the creditors of the means of communicating with him and (3) the debtors had intimated that they had suspended payment of their dues. The learned Judge sitting in Insolvency (Krishnaswami Aiyangar, J.) has found that all these allegations are true. The appellant contends that the action of his partner in absenting himself from the place of business and in secluding himself cannot affect him, but he concedes, as he must, that if the appellant's partner gave notice of suspension of payment, the law allows both of them to be adjudicated. The appellant, however, says that there was no notice of suspension of payment. It is not necessary to consider whether there is any substance in the appellant's first contention because it is obvious that in this case notice of suspension of payment was given.

3. Before considering the evidence relating to the notice of suspension of payment it is necessary to deal with a preliminary argument advanced on behalf of the appellant to the effect that the petition is defective in so far as it relates to the third act of insolvency. The allegation in the petition is couched in these words:

On the evening of the 5th October, 1940 the debtors intimated that they had suspended payment of their dues.

4. In paragraph 3 of the affidavit which was filed in support of the petition it is said,

On the evening of the 5th October, 1940 the second debtor when pressed for payment intimated to me and Mr. Vallabhdas, a partner of Vallabhdas and Brothers, another creditor, that the firm was no longer in a position to meet its dues and that it had suspended payment of debts due by it and that he intended to file an insolvency petition.

5. It has been argued by Mr. Naidu on behalf of the appellant that the actual words used by Raman Lal should have been set out in the petition and that a defect of this nature is not cured by anything contained in the affidavit filed in verification. In this connection Mr. Naidu has drawn our attention to the decision of the Rangoon High Court in C.A.P.C.S. Chettiar Firm v. V.V.R. Chettiar Firm I.L.R.(1935) Rang. 686. In that case the petition merely alleged that the debtors had given notice to the petitioners as well as to their other creditors that they had suspended or were about to suspend payment of their debts, but in the affidavit which verified the petition the deponent made this statement:

I say that the debtors' manager and kartha further told me that they were not in a position to pay in full to their creditors.

The Court held that the act of insolvency alleged in the petition was not couched in terms sufficiently clear and precise to be the basis of an insolvency petition or to justify the Court in passing an order of adjudication. It was also held that an affidavit filed in verification could not be read in conjunction with the petition in order to supply a deficiency in the petition itself. With great respect, we are unable to accept this judgment as representing a correct statement of the law. In our opinion technicality is here carried too far. Where the petition states that the debtor has given notice to his creditors that he has suspended or that he is about to suspend payment of his debts and the affidavit verifying the petition shows that this is in fact the case, there is compliance with the law's requirements. The petition and the affidavit should be read together and if the petitioning creditor sets out in sufficient detail the facts on which he is relying, the debtor can have no complaint whether the information is contained in the petition or the affidavit. The Court has to be satisfied that there has been notice of suspension of payment or that the debtor has intimated to his creditors that he is about to suspend payment and the supporting affidavit is filed for that purpose. In the present case Krishnaswami Aiyangar, J., held that the petition was sufficiently clearly worded and we are in full agreement with him.

6. Turning now to the facts, the evidence is that Mr. Babu Bhai, a partner in the first respondent's firm, met Ramanlal on the evening of the 5th October, 1940 and demanded payment of Rs. 7,000, which was due to his firm by the insolvents. Thereupon, Ramanlal replied:

My firm is not in a position to pay your moneys. I am not going to pay any one anything. I want to file my insolvency.

7. A clearer intimation of suspension of payment is hardly possible to imagine; but it has been contended that the Court should not give these words their plain and ordinary meaning because Mr. Babu Bhai renewed his demand the next day. It is said that the renewal of the demand shows that he did not regard Ramanlal's statement to him on the 5th as being an intimation of suspension of payment. Mr. Babu Bhai was asked in cross-examination why he made a demand after the notice which he received on the 5th October. His reply was I hat he made the demand 'hoping against hope', but that the statement of the day before convinced him that the insolvents would not pay.

8. We consider that there is no substance in this appeal which consequently will be dismissed with costs in favour of the first and second respondents. The costs will come out of the estate.


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