Syndicate Bank, T. Nagar, Madras v. Rajivi Naik — 1991 DIGILAW 563 (MAD)

Judgment :- Syndicate Bank, T. Nagar Branch, Madras-17 filed an Original Suit No. 1583 of 1974 on the file of the City Civil Court, Madras against one Haridass Kamath and the respondents, who are the legal representatives of the deceased N.V. Naik, claiming a sum of Rs. 44,934/- in the suit. Haridass Kamath remained ex parte . The legal heirs of late N.V. Naik appeared through counsel and made an endorsement before the Court seeking for a decree being passed as prayed for against the assets of the deceased N.V. Naik in their hands. The Court after recording the endorsement passed a decree on 20.7.1979 personally against Haridass Kamath with costs and a decree against the assets of the late N.V. Naik in the hands of the legal representatives, viz., the respondents herein. According to the Bank, the Bank was not able to realise the decree amount as per the joint endorsement in the suit, inspite of several attempts. The present petition has been filed under S. 108 of the Presidency Towns Insolvency Act (hereinafter referred to as the Act) for administration of the estate of late N.V. Naik in the hands of the legal representatives, viz., the respondents in the present petition. 2. The present petition is resisted by the respondents. They filed a common counter - statement dated 11.10.1990. According to the respondents, the petition is not maintainable for the following reasons: 1. The petitioner has not made the necessary averments to maintain a petition in Insolvency; 2. The Judgment debtor is not the estate of Sri N.V. Naik. No decree has been granted against the estate of Mr. N.V. Naik, nor is the estate of Mr. N.V. Naik a party to the said suit. No act of Insolvency has been committed by Mr. N.V. Naik or his estate. 3. Assuming that the petition is based on the original cause of action for the suit, namely the promissory note, even then the claim will be hopelessly barred by limitation (Pronote, dated 28.11.1970) and the estate cannot be liable to satisfy a time barred claim. 4. The petitioner has not made out and has not even pleaded an act of Insolvency which could support the petition. 5. S. 11 of the Presidency Towns Insolvency Act precludes the passing of an order of adjudication even on facts of the case. 3. 4. The petitioner has not made out and has not even pleaded an act of Insolvency which could support the petition. 5. S. 11 of the Presidency Towns Insolvency Act precludes the passing of an order of adjudication even on facts of the case. 3. On behalf of the petitioner, the present Manager of the Bank viz., Padma Srinivasan was examined as P.W. 1 and Exs. P. 1 and P. 2 were marked through her. None was examined on behalf of the respondents. 4. The only point that arises for consideration in this petition is whether the petition filed under S. 108 of the Act is maintainable or not. 5. As stated above, the petitioning creditor Bank has filed the present petition under S. 108 of the Act only on the ground that the Bank was not able to realise the decree amount, inspite of their several attempts and hence, the present petition for administration of the estate of late Naick has been filed. 6. I have heard the arguments of Mr. M. Ramachadran on behalf of Mr. S. Sampathkumar, learned counsel appearing for the petitioning creditor Bank and Mr. S.B.S. Raman, learned counsel appearing for the respondents in detail. 7. Mr. S.B.S. Raman, learned counsel for the respondents first argued on the question of maintainability of the present petition under S. 108 of the Act. It is relevant at this stage to extract S. 108 of the Act: “108. (1) Any creditor of a deceased debtor whose debt would have been sufficient to support an insolvency petition against the debtor, had he been alive, may present to the Court within the limits of whose Ordinary Original Civil Jurisdiction the debtor resided or carried on business for the greater part of the six months immediately prior to his decease, a petition in the prescribed form praying for an order for the administration of the estate of the deceased debtor under this Act. (2) Upon the prescribed notice being given to the legal representative of the deceased debtor, the Court may, upon proof of the petitioners debt, unless the Court is satisfied that there is a reasonable probability that the estate will be sufficient for the payment of the debts owing by the deceased, make an order for the administration in insolvency of the deceased debtors estate, or may upon cause shown dismiss the petition with or without costs. (3) A petition for administration under this Section shall not be presented to the Court after proceedings have been commenced in any court of justice for the administration of the deceased debtors estate; but that court may in that case, on proof that the estate is insufficient to pay its debts, transfer the proceedings to the Court exercising jurisdiction in insolvency under this Act, and thereupon the last mentioned court may make an order for the administration of the estate of the deceased debtor, and the like consequences shall ensue as under an administration order made on the petition of a creditor.” 8. The section contemplates that any creditor of a deceased debtor may present a petition to the insolvency court within the limits of whose ordinary original civil jurisdiction the debtor resided or carried on business for the greater part of the six months immediately prior to his decease, a petition in the prescribed form praying for an order for the administration of the estate of the deceased debtor under the Act. 9. We are not concerned with sub clauses (2) and (3) of S. 108 of the Act in the present case. 10. It is seen from the Insolvency Rules, 1958 that a creditors petition for order of Administration of Deceased Debtors Estate, S. 108 (Order XIII,-Rule 1) has to be filed in the prescribed for viz., Form No. 52. 11. Order XIII Rule 1 of the Insolvency Rules is also reproduced hereunder for the sake of convenience: Order XIII Administration of Estate of a Deceased Debt - 1. A petition under S. 108 of the Act shall be in Form No. 52 with such variations as the case may require and shall be signed and verified by the petitioner. The Registrar shall appoint a day for the hearing of the petition.” It is also relevant to extract the preamble portion of paragraph 1 of the prescribed form No. 52. “I, of . hereby petition the Court that an order be made for the administration in Insolvency of the estate of the late . (a) who died on .. the day of . 19 . and say— 1. That the said for the greater part of the six months immediately prior to his decease resided (or carried on business) at .. within the limits of the Ordinary Original Civil Jurisdiction of this Court.” 12. (a) who died on .. the day of . 19 . and say— 1. That the said for the greater part of the six months immediately prior to his decease resided (or carried on business) at .. within the limits of the Ordinary Original Civil Jurisdiction of this Court.” 12. A perusal of the petition filed by the petitioner, it is seen that the petitioner has not made the necessary averments to maintain a petition in insolvency. The preamble portion of the present petition is also reproduced hereunder: “I, Nalini Shankar, Manager Syndicate Bank, T. Nagar, hereby petition the court that an order be made for the administration in Insolvency of the Estate of the Late N.V. Naik who died. (date of death not known to the petitioner) say.” 13. P.W. 1 the Bank Manager, who was examined has also deposed in cross examination that she was not aware of the death of the deceased N.V. Naik. The question put by the learned counsel for the respondents to the witness and the answer given by the witness (P.W. 1) are reproduced as under: Q. While you are aware that he died before the date of institution of this Suit, O.S. No. 1583 of 1974, you are not aware of the date of death. A I am not aware Am I right? A. I am not aware. 14. Thus, the mandatory condition precedent prescribed under S. 108 of the Act has not been satisfied at all. As stated above, the date of death of the deceased has been left blank in the petition filed by the petitioner. That apart as provided under the format in Form No. 52, the date of death of the deceased has to be given, which will only enable the Court to reckon the period of six months immediately preceding to the date of death of the debtor. Since such a vital factor has been omitted to be mentioned in the petition, in my opinion, the court is unable to know the date of death of the deceased N.V. Naik. 15. The petitioner has also not made out any case and has not even pleaded on the act of Insolvency Against the deceased N.V. Naik, which could support this petition. 16. 15. The petitioner has also not made out any case and has not even pleaded on the act of Insolvency Against the deceased N.V. Naik, which could support this petition. 16. In the light of the abovementioned facts, let me now consider the questions whether the present petition filed under S. 108 of the Act is maintainable and whether the mandatory requirements required under the said Section are satisfied or not. 17. The provisions of S. 108 of the Act for administration in Insolvency of the estate of the person who had died as an insolvent is peculiar to the Act and no parallel provisions are found in the Provincial Towns Insolvency Act V of 1920. In Order to maintain a petition under the aforesaid Section, it is obligatory on the part of the creditor who presents the petition to plead and prove that the deceased debtor resided or carried on business for the greater part of six months immediately prior to his decease within the limits of ordinary original civil jurisdiction of the court. Unless this condition is satisfied a petition under S. 108 of the Act, in my opinion is not maintainable. 18. Rule 1 of Order XIII of the insolvency Rules, 1958, provides that a petition under S. 108 of the Act shall be in Form No. 52 with such variations, as the case may require and shall be signed and verified by the petitioner. Form No. 52 which has been extracted above also contains necessary provisions for indicating the date of death of the deceased debtor. 19. The provisions contained in Form No. 52 with regard to the date of death of the deceased debtor is mandatory because the jurisdiction of this court to entertain a petition depends on the fact of the date of death of the debtor and the further fact that six months immediately preceding the date of death of the deceased debtor either resided or carried on business for the greater part within the Ordinary Original Civil Jurisdiction of this court. Therefore, the date of death is very crucial and necessary in order to entertain and decide an application under S. 108 of the Act. If the mandatory condition with regard to the date of death is not furnished by the creditor, the petition, in my opinion is liable to be dismissed. 20. Therefore, the date of death is very crucial and necessary in order to entertain and decide an application under S. 108 of the Act. If the mandatory condition with regard to the date of death is not furnished by the creditor, the petition, in my opinion is liable to be dismissed. 20. Coming to the facts of the present case, the petitioning creditor Bank not only failed to disclose the date of death of the deceased debtor in the petition, but P.W. 1, the Bank Manager in her evidence has also been candid enough to admit that she is not aware of the date of death of the deceased debtor. 21. Further, being a peculiar provision for the administration in insolvency of the estate of persons dying insolvent the same has got to be strictly construed. It is necessary on the part of the creditor to establish that the deceased debtor died in insolvent circumstances, besides proving the debt of the petitioner making the petition under S. 108 of the Act. If such a construction is not placed on S. 108 unscrupulous creditors may resort to abuse the provisions of S. 108 of the Act. There is no iota of evidence in the present case to show that the deceased debtor died as an insolvent. Hence, there is no question of administering his estate in the hands of legal representative arises for consideration. 22. Even though the Act is of the year 1909 neither counsel would bring to my notice any decided authority as to the scope and ambit of S. 108 of the Act. The attempts made by me to find out the scope of the section by reference to any decided authority were also in vain and there does not appear to be any decided authority of Indian Courts on this aspect. 23. In my anxiety to find out the jurisdiction of the court under S. 108 of the Act, I went through the corresponding provisions of English Law, viz., Bankruptcy Act of 1914 and the Law and Practice in Bankruptcy by Williams (18th Edition) The provisions of Sub-S. 1 of the S. 130 read with sub-S. 10 of the Bankruptcy Act, 1914 reveals that the language of S. 108 of the Act is in pari matcria with S. 130 of the Bankruptcy Act 1914. So also the Form prescribed (Form No. 165) under Rule 299 of the Bankruptcy Rules is almost similar to Form No. 52 prescribed under Rule 1 of Order XIII of Insolvency Rules, 1958. The Jurisdiction and grounds for exercise by Upjohn, J. in Finer v. Bradleywhich has been referred to by Williams on his Law of Bankruptcy (18th Ed. P. 540). It has been clearly laid down by English Courts in Re-Hay (1915) 2 C.H. 198) that in addition to showing a prima facie debt the petitioner has to satisfy the court that the estate is insolvent. 24. Therefore, it is essential on the part of the petitioner not only to satisfy the two conditions set out in S. 108 of the Act viz., 1. that there is a debt sufficient to support an Insolvency Petition and 2. that the deceased debtor for greater part of six months immediately prior to his death either resided or carried on business within the ordinary original civil jurisdiction of this court but also to satisfy the court that the estate of the deceased debtor is insolvent. 25. There is total lack of evidence as to the date of death of deceased debtor. Therefore, the statutory condition upon which alone an application can be maintained under S. 108 of the Act remains unfulfilled. 26. There are no merits in this petition and accordingly the same is dismissed with costs of Rs. 500/-The petitioner Bank shall pay a cost of Rs. 500/-(Rupees five hundred only) and the cost will go to the Madras Bar Association Library Fund. High Court, Madras.