Skip to content


inderlal Agarwalla Vs. M.B. Medhora - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberAppeal No. 316 of 1971 and Insolvency Case No. 9 of 1970
Judge
Reported inAIR1978Cal16
ActsPresidency Towns Insolvency Act, 1909 - Section 13(2)
Appellantinderlal Agarwalla
RespondentM.B. Medhora
Appellant AdvocatePrativa Banerjee, Adv.
Respondent AdvocateT.P. Das, Adv.
DispositionAppeal dismissed
Excerpt:
- .....purpose of serving the notice hereto annexed and marked with the letter 'a' upon the abovenamed debtor m.b. medhora. on arriving at the said premises i found, pointed out and identified to my co-deponent, the said m.b. medhora, myco-deponent then and there tendered to him a true copy of the original notice together with a copy grounds in support thereof for service. but the said m.b. medhora refused to acknowledge the receipt of such service by signing his name on the back of the said original notice. my co-deponent then and there affixed a true copy of the said original notice together with a copy grounds in support thereof at the outer door of the house and premises no. 19c, jawaharlal nehru road in calcutta in my presence, and in the presence of the said m.b. medhora.' 13. these.....
Judgment:

Sankar Prasad Mitra, C.J.

1. This is an appeal against the order of Mr. Justice Deb made on the 2nd August, 1971 in Insolvency Case No. 9 of 1970. The petitioner before Mr. Justice Deb, who is the appellant before us, applied for, inter alia, an adjudication order in respect of the estate of the respondent. The learned trial Judge has dismissed the application.

2. The facts briefly are that the appellant advanced a sum of Rs. 10,000 to the respondent on the 20th Aug., 1967 for the respondent's business with interest at the rate of 12% per annum until realisation and the respondent executeda promissory note. On the same day the respondent drew a cheque for Rs. 10,000 in favour of the appellant.

3. On the 19th Sept., 1967 and the 20th Sept., 1967, the respondent addressed two letters to the appellant requesting the appellant not to present the cheque for payment as he did not have sufficient credit in the bank.

4. The appellant's case is that on the 31st July, 1970 the respondent gave the verbal notice of suspension of payment His further case is that the respondent had secluded himself to deprive the appellant of all means of communication with the respondent. On this ground the application for adjudication started.

5. Section 13 of the Presidency Towns Insolvency Act, 1909, makes provisions for proceedings and orders on creditor's petition. Sub-section (2) of Section 13 provides as follows:--

'At the hearing the Court shall require proof of-

(a) the debt of the petitioning creditor, and

(b) the act of insolvency, or, if more than one act of insolvency is alleged in the petition, some one of the alleged acts of insolvency.'

6. A petitioner applying for adjudication, therefore, has to prove (1) the debt due to him, and, (2) the act or acts of insolvency of the respondent.

7. In para. 5 of the affidavit of the appellant affirmed on the 20th August, 1970 in support of the Notice of Motion, it is alleged as follows: --

'That the said M.B. Medhora within three months before the date of the presentation of this petition has committed the following acts of insolvency namely:

(a) That on the 31st day of July, 1970 the said debtor gave verbal notice to me that he had in fact suspended payment of his debts and he had no intention to pay any of his creditors, including myself.

(b) That the said debtor since 31st day of July, 1970 has enclosed himself so as to deprive me of the means of communicating with him.'

8. An adjudication order means an order of civil death. The Court before making an order must, therefore, be fully satisfied on the evidence on record that such an order is justified on the facts and in the circumstances of the case.

9. In the instant case the allegations in para. 5 (a) do not contain any particulars. It is not stated, for instance,where the respondent had met the appellant to give the verbal notice of suspension of payment and whether any one else was present on that occasion.

10. In paragraph 3 of the appellant's affidavit-in-reply affirmed on the 7th January, 1971, the appellant has stated as follows:

'The said debtor is in utter financial difficulties and is a bankrupt and insolvent. He is out to deprive his creditors by selling whatever little assets still he has and he should not be allowed to swindle the public. He is heavily indebted to various persons. Beside me he is indebted to Srish Chandra Chakravarty, Solicitor to the tune of Rs. 20,000. He has not paid Government excise duties for the liquor and wines already sold in the market. He was in the habit of abusing his creditors when they would try to meet him.'

11. These allegations were not made in the first affidavit to give an opportunity to the respondent to answer them. Secondly, there is no supporting affidavit either of Sirish Chandra Chakravarty or any other creditors about the respondent's liability to pay his or their debts.

12. The allegations in para. 5 (b) referred to above also suffer from grave infirmities. In the affidavit of service of the Notice of Motion affirmed by Inderlal Agarwalla, the appellant, and Sushil Kumar Das, his co-deponent, on the 3rd Sept., 1070, certain averments have been made, which clearly disprove the allegations in the aforesaid para. 5 (b). Paras. 1 and 2 of the affidavit of service run thus:--

'1. I, Inderlal Agarwalla, for myself say that I know and am well acquainted with the abovenamed debtor, M.B. Medhora, who ordinarily carries on business and was on the 28th day of Aug., 1970 actually carrying on business under the name and style of 'Florida' as sole proprietor thereof at premises No. 19C, Jawaharlal Nehru Road, Calcutta.

2. I, Inderlal Agarwalla, for myself further say that I did on the 28th day of Aug., 1970 at. about 2 P.M. proceed accompanied by my co-deponent to the house and premises No. 19C, Jawaharlal Nehru Road, Calcutta, for the purpose of serving the notice hereto annexed and marked with the letter 'A' upon the abovenamed debtor M.B. Medhora. On arriving at the said premises I found, pointed out and identified to my co-deponent, the said M.B. Medhora, Myco-deponent then and there tendered to him a true copy of the original notice together with a copy grounds in support thereof for service. But the said M.B. Medhora refused to acknowledge the receipt of such service by signing his name on the back of the said original notice. My co-deponent then and there affixed a true copy of the said original notice together with a copy grounds in support thereof at the outer door of the house and premises No. 19C, Jawaharlal Nehru Road in Calcutta in my presence, and in the presence of the said M.B. Medhora.'

13. These averments clearly establish that the debtor was not making any attempt to seclude himself and was actually carrying on his business. In fact, import licenses for foreign wines, liquor and other drinks granted by the appropriate authorities in favour of the respondent dated the 15th May, 1970 and the 3rd August, 1970 have been printed in the paper book at pages 12 to 22. There is also a letter of the 1st June, 1970 at page 23 of the paper book to show that the respondent was dealing in 'WHITE LABEL' Dewar's Scotch Whisky. These documents support the respondent's contention that he was in fact carrying on business.

14. On these facts, we are of the opinion that no prima facie case of any act of insolvency as required by Section 13(2)(b) of the Presidency Towns Insolvency Act, 1909 was made out by the appellant in the trial Court.

15. Mrs. Banerjee, appearing for the appellant, has argued before us that the trial court might have been justified in rejecting the grounds advanced in paragraph 5 (b) aforesaid, but on the basis of the grounds alleged in para. 5 (a) an order for trial on evidence should have been made In our opinion, in the absence of the requisite particulars or of a prima facie case, as we have stated above, the trial court had no materials before it to make an order for trial on evidence.

16. The trial court, however, had made an observation that this application was a wrongful abuse of the process of the Court and was wholly mala fide. As we are disposing of the appeal on grounds stated above we express no opinion on the aforesaid observations of the learned trial judge and would treat them as obiter dicta.

17. This appeal, therefore, is dismissed with costs.

S.K. Datta, J.

18. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //