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Keramat Ali Khan Vs. Baidya Nath Biswas and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal955,95Ind.Cas.297
AppellantKeramat Ali Khan
RespondentBaidya Nath Biswas and ors.
Excerpt:
provincial insolvency act (v of 1920), section 10 - application for adjudication--assets not sufficient to satisfy liabilities--fictitious transfer previous to date of petition, whether ground for rejection of petition. - .....he stated that his liability amounted to sum of rs. 806 and that his assets were only rs. 70. the learned judge found that he had a rent-free tenure, raiyati holdings and a homestead which had been transferred a few years ago to his wife his case was that he had transferred his properties to his wife in discharge of the dowry which he owed to her. the learned judge found that the transfer was merely a paper transaction to defeat the claims of his creditors and further that if the petitioner behaved honestly he would not be unable to pay his debts.2. i do not think that on the facts found and proved the judge was entitled to reject his application. section 10 provides that a debtor shall not be entitled to present an insolvency petition unless he is unable to pay his debts and his debts.....
Judgment:

Cuming, J.

1. The facts of this appeal are as follows; The present appellant filed an application to be adjudicated an insolvent. He stated that his liability amounted to sum of Rs. 806 and that his assets were only Rs. 70. The learned Judge found that he had a rent-free tenure, raiyati holdings and a homestead which had been transferred a few years ago to his wife His case was that he had transferred his properties to his wife in discharge of the dowry which he owed to her. The learned Judge found that the transfer was merely a paper transaction to defeat the claims of his creditors and further that if the petitioner behaved honestly he would not be unable to pay his debts.

2. I do not think that on the facts found and proved the Judge was entitled to reject his application. Section 10 provides that a debtor shall not be entitled to present an insolvency petition unless he is unable to pay his debts and his debts amount to five hundred rupees; and Section 25 further provides that in the case of a petition presented by a creditor the Court shall dismiss the petition if it is not satisfied with the proof of his right to present the petition. His right to present the petition depends upon his satisfying the necessary requirements under Section 10 to which I have already referred. Now in the present case it has not been denied that the petitioner's liability amounted to Rs. 806. It has been proved that the rent-free tenure, raiyati holdings and the homestead had been transferred to his wife by a document. It cannot, therefore, be said that these properties are any longer available for the discharge of the appellant's debts, because by his own acts he has made it impossible to sell these properties, being unable to give the purchaser a good title. It has not been shown that he has any other property available for the discharge of his debts. It is quite possible that the Court or the Receiver, if appointed, may or may not be able to avoid this transaction under Section 53 of the Provincial Insolvency Act, But on the facts found it cannot be said that the appellant is in a position to pay his debts. He is, therefore, entitled, as he admittedly had debts more than Rs. 500 to be declared an insolvent.

3. The order of the learned District Judge must, therefore, be set aside and the case be remitted to the lower Court in order that the appellant debtor may be adjudicated an insolvent.

4. There will be no order as to the costs of this appeal.

Ghose, J.

5. I agree.


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