JUDGMENT 1. ON 10th January 1983 the creditor filed a suit being Suit No. 7 of 1983 against M/s. Patel Ramnicklal Haribhai and Co. and one M/s. Kamal Roadways which is a registered partnership firm. The debtors No. 1to 4 are partners of the said firm being debtor no. 5. On 18th July 1983 a decree in favour of the creditor and, inter alia, against the said debtor no. 5 was passed for a sum of Rs. 83,262. 50p. with interest thereon at the rate of 9% per annum from 2nd February 1980 until realisation and cost. On 2nd April 1985 the creditor filed a tabular statement supported by an affidavit of Sri Kishor Kumar Thakkar affirmed on 2nd April 1985. On 3rd April 1985 an order was passed by C. K. Banerji, J. inter a1ia for attachment of moveable properties and the Bank account CE mentioned in column 10 of said tabular statement. Pursuant to the said order on 24th April 1983. the goods belonging to the said debtor no. 5 as referred to in the report dated 24th April 1985 were seized and attachment levied. Attachment has also been levied On a sum of Rs. 96. 05 only lying to the credit of the debtor no. 5 in its current account with Syndicate Bank Burrabazar Branch, Calcutta. The aforesaid attachments arc still continuing. On lila April 1965 the creditor made an application for appointment of Receiver Over the attached moveables and for sale thereof. On about 14th May 1985 C. K. Banerjee, J. passed an order of sale en the said application. An application was made by M/s, Gaubati Indore Roadways arid M/s. Motiram Singhal and Company, inter alia, for adjudication upon the objection: raised by the said applicants to the said attachment. C. K. Banerji, J. refused to entertain the said application and by an order passed on 21st June 1985 rejected and dismissod the same with costs. The said M/s. Gauhati Indore Roadways and M/s. Motiram Singhal and Co. preferred an appeal against the said order. n the said appeal no prayer for stay of execution was made nor any stay has been granted of execution of the decree. The said appeal is still pending. 2. The said M/s. Gauhati Indore Roadways and M/s. Motiram Singhal and Co. preferred an appeal against the said order. n the said appeal no prayer for stay of execution was made nor any stay has been granted of execution of the decree. The said appeal is still pending. 2. IN view of the aforesaid attachment being continued for more than 21 days and view of other alleged acts of insolvency having been committed creditor issued and served a Notice of Demand dated 30th July 1985 under Presidency towns Insolvency Act specifying therein the amount due under the said decree being a sum or Rs. 1,61,330. 00 and requiring the debtors to comply with the said notice by making payment of the said sum or by furnishing security for the same to the satisfaction of the creditor. The creditor also specified therein for compliance of the notice a period of thirty three days after its service and stated the consequences of noncompliance. However, the debtor nos. 1 to 3 made an application under section 9 (5) of the Presidency Towns Insolvency Act, 1909 in this Court, inter alia for setting aside the said Insolvency notice. 3. UPON the said application the following order was passed by this Court on 2 5th September 1985. This application is disposed of by the following orders: - "the decree-holder has agreed to accept the sum of rs. 1,40,000/- in full and final settlement of the decretal dues provided the applicant, before me, pays' the said amount of Rs. 1,40. 000/- in four equal instalments and the first of such instalment shall be paid by the applicant on or before 10th October 1985 and thereafter the other instalments by 10th of each succeeding month. In default of payment of the first instalment or any of the instalments this application will stand dismissed and the plaintiff decree-holder will be at liberty to proceed in accordance with law. All parties to act on a signed copy of the minutes of this order. " 4. THE said debtors have defaulted in making payment of instalment pursuant to the said order and therefore the default clause has become operative. The said application therefore stands rejected and dismissed. In the premises, this application has been made. All parties to act on a signed copy of the minutes of this order. " 4. THE said debtors have defaulted in making payment of instalment pursuant to the said order and therefore the default clause has become operative. The said application therefore stands rejected and dismissed. In the premises, this application has been made. It is alleged that neither the creditor nor any person on its behalf holds any security for payment of the aforesaid decretal dues of the creditor or any portion thereof. In these circumstances within a period of three months before the date of presentation of this petition the debtors are deemed to have committed following acts of insolvency viz., (a) property of debtors has been attached for a period of not less than twenty one days in execution of the said decree for payment of money under Section 9 (i) (e) of the Presidency Towns Insolvency Act, 1909 and the said attachment still continuing, (b) inspite of the notice dated 30th July 1985 having been served on the debtors, the debtors have neither paid the amount specified therein nor have furnished security to the satisfaction of the creditor within the said period or at all and (c) the said application of debtors no. 1 to 3 have been rejected and dismissed as aforesaid under provisions of Section 9 (2) (b)of the Presidency Towns Insolvency Act, 1909. 5. TO complete the narration, a few more facts having material bearing on this application have to be stated. In or about 1986 the debtors instituted a suit in this Court for setting aside the decree dated 18th July 1983 on the ground that the same is nullity and not binding on the debtors. In the said suit an application was made by the debtors for an interim order restraining the creditors from executing and/or acting and/or taking any steps in respect of the said decree dated 18th July 1983 in so far as the said debtors are concerned. The said application was disposed of by R. N. Pyne, J. by the order dated 31st March 1986. The said order is, inter alia, to the following effect : "after hearing the parties and after considering the facts and circumstances of this case, there will be an order in terms of prayer (a) until 28th April, 1986. The said application was disposed of by R. N. Pyne, J. by the order dated 31st March 1986. The said order is, inter alia, to the following effect : "after hearing the parties and after considering the facts and circumstances of this case, there will be an order in terms of prayer (a) until 28th April, 1986. If within the said period the petitioner furnishes a security in favour of the Registrar, Original Side in the sum of Rs. 1,00,000/- (Rupees one lakh) either by cash or by way of bank guarantee or immovable property within the jurisdiction will continue until the disposal of this suit. If immovable property is offered by way of security, the Registrar, Original Side will satisfy himself about the sufficiency thereof. If the security is furnished, Mr. Surana appearing on behalf of the defendant no. 1 waives service of writ of summons. The defendant no. 1 will file his written statement within four weeks from the date of filing security. This order is without prejudice to the rights and contentions of the parties in any other pending proceedings. If security is furnished, cost of this application will be the cost in the cause. If no security is furnished, then the order of injucation will stand vacated and the petitioner will pay the cost of the application to the respondent no. 1. 6. IN view of the said order it is contended by the learned advocate for the debtors that this application is not maintainable and the Court should stay the proceeding otherwise the interim order obtained in the suit instituted by the debtors would be completely infrutuous. It is also the contention of the debtors that the creditors have proceeded with this insolvency petitioner on the ground that the decrtaal dues have not been paid but since the execution of the decree has been stayed the adjuncation preceding cannot be continued any further. On the other hand, it is contended by the learned advocate for the creditors that even though a suit pending challenging the decree there is no bar in preceding with the insolvency petition. On the other hand, it is contended by the learned advocate for the creditors that even though a suit pending challenging the decree there is no bar in preceding with the insolvency petition. It is also contended that under section 9 any person served with an insolvency notice., may, within the period specified therein for his compliance, apply to the court to set aside the insolvency notice, inter alia on the ground that he is entitied to have a decree or order set aside under any law providing for the before the decree or order o0r the time he has made an application before the competent authority under such law for making of such application has not expired or that the decree or order is not executable under the order the provisions of any law. It is contended that this court by the order dated 25th September 1985 dismissed the application for stay of the Insolvency proceeding is similar to winding up proceedings. It is neither a proceeding to execution nor a proceeding to enforcement of a judgment and accordingly the interim order passed in the said suit. Reliance has been placed in this connection on decision of the court of appeal in Re. A Company reported in (1915) 1 Ch. 520. there the court of appeal speaking through Lord Cozens-Hardy M. R. observed:- "the learned judge seems to have been pressed by expressions used by various judges to the effect that a winding up order is in effect giving the petitioner equitable execution. Lord Bowen used these words in a case where the petitioner was not a judgment creditor. I protest against treating such phrases as though they were contained an Act of Parliament. They were sufficient and apt for the purpose far which they were employed. The winding up order secures that all the assets of the company shall be applied for the benefit of all the creditors, and that is all that was intended. In my opinion the winding up petition is neither a proceeding to execution on, nor a proceeding to the enforcement of, a judgment within the meaning of Section 1, sub-section 1, of the Act". 7. I have considered the rival contentions. In my opinion the winding up petition is neither a proceeding to execution on, nor a proceeding to the enforcement of, a judgment within the meaning of Section 1, sub-section 1, of the Act". 7. I have considered the rival contentions. It is true that to determine whether this Court has jurisdiction to entertain this Insolvency Petition, the facts as those were on the date when the petition was presented have to be considered. But subsequent change of events even if does not take away the jurisdiction of the Court to try and determine the petition, is relevant and cannot be ignored for the purpose of giving appropriate relief to the parties. I am unable to accept the contention of Mr. Chatterjee that the Insolvency petition is not valid or maintainable. The validity of a petition must be judged on the facts as they were at the time of its presentation and a petition which was valid when presented cannot cause to be maintainable by reason of event subsequent to its presentation. But even if the petition is valid or maintainable the Court cannot ignore the subsequent events which have material bearing on the issues involved in the present proceeding. It is true that the application made by the debtor under section 9 (2) of the Act was rejected, but the claim of the creditor to proceed against the debtor indisputably arises out of the said decree passed in their favour. The Interlocutory court has stayed the operation of the decree upon the debtors furnishing security. If the security is furnished and before the suit is heard, an order is made on this application, that will make the entire proceeding in the suit nugatory. It will be illogical and as well as against the principles of justice and fair play if the debtors are adjudicated as insolvent during the pendency of the suit which may ultimately succeed and is compelled to suffer all the disqualifications of an insolvent in the meantime. If ultimately the suit of the debtors is decreed and the decree obtained' by the creditors is set aside the debtors cannot be put back into the same position. On the contrary, if this application is stayed on certain conditions until disposal of the suit, final relief can be moulded without the position of the parties being altered during the pendency of the said suit. On the contrary, if this application is stayed on certain conditions until disposal of the suit, final relief can be moulded without the position of the parties being altered during the pendency of the said suit. It is the duty of the Court to stay hearing of the Insolvency petition if there is a ground for supporting that there is a bonafide dispute pending as regards the execution of the decree which forms the basis of the claim of the creditor. The Insolvency Court is not a debt collecting Court. Ordinarily the Creditor should take recourse to the ordinary remedy open to him. When the debt is not disputed and on the admitted facts it is found that the debtor is unable to pay its debt, the Insolvency Court may allow the Insolvency petition. But where a dispute arises with regard to the debt itself and which is the subject of properly constituted suit, the Insolvency Court in such a case will be slow and cautions in making an order of adjudication which will visit the debtors with civil consequence. 8. IT is contended that in view of the provisions of Section 41 (b) of the Specific Relief Act, 1 963 there cannot be any injunction against the creditor from proceeding with the Insolvency Court to pass appropriate order on the insolvency petition. Reliance has been placed on a decision of the Supreme court in the case of Cotton Corporation of India Limited v. United Industrial Bank reported in A. I. R. 1983 S. C. 1272. There the Supreme Court observed that in view of the provisions of Section 4kb) of the Specific Relief Act, 1953 the Court has no jurisdiction to grant,a perpetual injunction restraining a person from instituting a proceeding in a Court not subordinate to it, as a relief, ipso facto temporary relief cannot be granted in the same terms. I am however, unable to accept the contention of Mr. Surana. It is true that the order of an interlocutory Court in the suit filed by the debtor is no bar to deciding the insolvency petition on merits. But the pendency of the suit challenging the decree obtained by the creditor which is the subject matter of the insolvency proceeding cannot be overlooked. If the contention of Mr. Surana. It is true that the order of an interlocutory Court in the suit filed by the debtor is no bar to deciding the insolvency petition on merits. But the pendency of the suit challenging the decree obtained by the creditor which is the subject matter of the insolvency proceeding cannot be overlooked. If the contention of Mr. Surana is accepted and the order of adjudication is made, in that event the suit of the debtors will be rendered completely nugatory. The decision of the Supreme Court relied an by Mr. Surana has also application to the facts in this case. There a Bank sought to restrain a Corporation by an injunction of the Court from instituting a proceeding for winding up of the Bank. Supreme Court held that the Court has no power be grant any injunction restraining a person from instituting a proceeding in a Court not subordinate to it. In this case an insolvency proceeding has already been institute. The creditor has not been restrained from instituting such proceeding. The question here is whether the creditor should be allowed to prosecute the insolvency proceeding having regard to the orders made in the suit filed by the debtors. It is not that the interlocutory Court restrained the prosecution of the insolvency proceeding. It is the duty of the insolvency Court to take into account all the relevant facts AND circumstances before making any order on the insolvency petition. One of such relevant facts is the order passed in the suit filed by the debtors where the execution of the decree has been stayed upon furnishing security. On the facts and circumstances of this case I am of the view that this Court at this stage should not make any order of adjudication making the suit instituted by the debtors ineffectual and this application should remain stayed till the disposal of the said suit subject to the conditions mentioned hereafter: 9. IN terms of the order passed by the Insolvency Court on 25th September, 1985, the creditors agreed to accept a sum of Rs. 1,40,000/- in full and final satisfaction of the decretal dues. Pursuant to the order dated 31st March, 1986 made by the Interlocutory Court. The debtors were directed to furnish security in the sum of Rs. 1,00,000/ -. The debtors therefore shall deposit a sum of Rs. 1,40,000/- in full and final satisfaction of the decretal dues. Pursuant to the order dated 31st March, 1986 made by the Interlocutory Court. The debtors were directed to furnish security in the sum of Rs. 1,00,000/ -. The debtors therefore shall deposit a sum of Rs. 40,000/- with the Advocate on record for the creditors within one month from date who shall hold the said sum free from lieu and subject to further order of this Court. The said sum shall be invested in a short term fixed deposit at least for A year and renewable thereafter from year to year till the said suit of the debtors is disposed of. In default of deposit of the said sum within the time specific above, this application will stand allowed with costs. All parties to act on the signed copy of the operative part of the judgment. Application stayed.