JUDGMENT - Smt. K.K. BAAM, J.:---This Notice of Motion has been taken out on behalf of the applicant/Judgment Debtor praying that it may be held that the applicant has not committed any act of insolvency in Notice No. N/55 of 1998; in the alternative and without prejudice to prayer (a), in terms of prayer b(i) to condone the delay made by the applicant in making payment of Rs. 10 lacs to respondent No. 1, (ii) extend the time for making payment of Rs. 10 lacs from 2-9-1998 to 14-10-1998 and condone delay in taking out this Notice of Motion. 2. In the Notice of Motion as taken out, the applicant/judgment debtor has also prayed that the Insolvency Notice No. N/55 of 1998 be set aside and Insolvency Petition No. 54 of 1998 taken out by respondent No. 1 (judgment creditor in Notice No. N/55 of 1998) against the applicant be dismissed and also for dismissal of Insolvency Petition No. 65 of 1998 taken out by respondent No. 2 herein (petitioning creditors in Petition No. 65 of 1998) against the applicant/ judgment debtor. 3. This application has been made on behalf of the applicant as it is the case of the applicant/judgment Debtor that there were several disputes between the parties on account of financial dealings with the applicant herein, his father Harinarayan Bajaj, his brother Rahul Bajaj and Creative Group of Companies with which respondents Nos. 1 and 2 are connected as one Shri Vijay Aggarwal is a partner in the partnership business of Creative Garments (respondent No. 1) and is also concerned with Creative Outwear Limited (respondent No. 2) as he is the Chief Promoter of the creative group of companies. 4. In respect of the said financial dealings/transactions, to secure the said creative group of companies/firm, the shares of one M/s. Sesa Goa Limited held/or owned by the applicant and his family were pledged by him and his family members as 1st collateral securities. 5. Under the said transactions, several disputes arose due to which various proceedings inter se between the parties were filed such as, Suit No. 1673 of 1998 filed by the applicant against the respondents herein, Suit No. 2256 of 1998 by Harinarayan G. Bajaj and Rahul Bajaj against said Vijay Agarwal and others in which the respondents herein are defendants. 5. Under the said transactions, several disputes arose due to which various proceedings inter se between the parties were filed such as, Suit No. 1673 of 1998 filed by the applicant against the respondents herein, Suit No. 2256 of 1998 by Harinarayan G. Bajaj and Rahul Bajaj against said Vijay Agarwal and others in which the respondents herein are defendants. Apart from these civil disputes, a Criminal Case No. 6/S/1998 has also been filed by Harinarayan G. Bajaj against the said Shri Pramod Banka and others wherein said Shri Vijay Agarwal is accused No. 2. Similarly, a Criminal Complaint No. 313 of /S/96 was filed by Creative Outwear Limited (respondent No. 2) through Shri Banka against the applicant/debtor herein in respect of dishonour of two cheques of Rs. 50 lacs given by the applicant to respondent No. 2 as 2nd collateral security. 6. With regard to the Criminal Complaint No. 6/S/1998 filed by the father of the applicant/debtor against Pramod Banka and others which included Vijay Agarwal, process was issued by the Additional Chief Metropolitan Magistrate. The said order was challenged by one Naval Sharma who is accused No. 3 in the said complaint and Defendant No. 4 in Suit No. 2256 of 1998. The said Criminal Application No. 2390 of 1998 challenging the order of issue of process is filed in this Court. The said criminal matter was before Justice Pandya and the parties were directed to arrive at a settlement, more particularly since it was a dispute between the family members of one group and Creative Group on the other. 7. It is the case of the judgment Debtor/applicant herein that the settlement talks were for overall settlement of all the disputes including the payment of Rs. 10.00 lacs which was to be paid under the award dated February 26, 1997 which is the subject matter of Insolvency Notice No. 55 of 1998. It is contended on behalf of the applicant/ judgment debtor that an assurance was given to him that until the settlement talks were over, the debtor would not be required to pay the amount of Rs. 10.00 lacs by the debtor to respondent No. 2, and that non payment prior to September 2, 1998 would not be treated as an act of insolvency. 8. 10.00 lacs by the debtor to respondent No. 2, and that non payment prior to September 2, 1998 would not be treated as an act of insolvency. 8. The judgment debtor/applicant has, in support of his contention that an understanding was arrived and the settlement talks were in progress, relied upon the orders by which the hearing of the application in the criminal matter was adjourned from time to time by consent, that is, the matter was adjourned on August 28, 1998, August 29, 1998, September 4, 1998, September 18, 1998 and October 10, 1998. It is also the case of the applicant/judgment debtor that the settlement talks were held but they failed and criminal application was dismissed by this Court after hearing the parties. Therefore, the case of the applicant/judgment debtor herein is that till October 12, 1998, on account of settlement talks between the parties and the assurance given to the debtor that he would not be required to pay Rs. 10.00 lacs to respondent No. 2 till the settlement talks are over and non payment prior to September 2, 1998 would not be an act of insolvency, there was no question of making payment with regard to the amount of Rs. 10.00 lacs. 9. It is, therefore, the case of the applicant/judgment debtor that said Naval Sharma, who was the applicant in the criminal case, and Pramod Banka, who was signed and verified the petition being Petition No. 65 of 1998, and is one of the accused in Criminal Case No. 6/S/1998 filed by the debtor's father Harinarayan G. Bajaj, were aware of the fact that there were settlement talks going on and that no further proceedings were to be adopted with regard to the payment to be made by the judgment debtor/applicant herein. 10. According to the applicant-judgment debtor, by virtue of the fact that the settlement talks failed on October 12, 1998, immediately on October 14, 1998 he made payment of Rs. 10.00 lacs in favour of respondent No. 1 herein by a cheque dated October 14, 1998 under the covering letter dated October 14, 1998 addressed through debtor's advocate which letter is annexed as Exhibit 3 to the affidavit in support of the Notice of Motion. 11. 10.00 lacs in favour of respondent No. 1 herein by a cheque dated October 14, 1998 under the covering letter dated October 14, 1998 addressed through debtor's advocate which letter is annexed as Exhibit 3 to the affidavit in support of the Notice of Motion. 11. A perusal of the said letter dated October 14, 1998 (Exhibit 3) reveals that in the said letter, there is a reference to insolvency notice dated July 17, 1998 by which the debtor was called upon to pay a sum of Rs. 10.00 lacs being the amount due under the award dated February 27, 1997 obtained by the judgment creditors being the 1st respondents herein. The said letter also records the fact that they, namely, the Advocates for the debtors, have forwarded the pay order dated October 14, 1998 for the sum of Rs. 10.00 lacs being the amount in discharge of the entire liability of the debtor on aforesaid matter and towards the full and final settlement and satisfaction of the judgment debt. The letter further records the fact that the judgment creditors were immediately called upon to withdraw the insolvency proceedings taken out against the judgment debtor upon realisation of the said pay order, and all other proceedings being the subject matter of award dated February 26, 1997. 12. It is, therefore, contended on behalf of the applicant-judgment debtor that the amount has been received by the judgment creditors unconditionally without any grievance or without disputes of any nature. Therefore, according to the applicant-judgment debtor, no act of insolvency has been committed by him and the Insolvency Notice No. N/55 of 1998 and the Petition No. 54 of 1998 have thus become infructous in view of payment of Rs. 10.00 lacs by the judgment debtor to respondent No. 1 herein. According to the judgment debtor Petition No. 54 of 1998 has not been served on him or his advocate. It is also contended on behalf of the judgment debtor that in view of the fact that the settlement talks were going on, there was no question of making payment until it was clear whether all the aforesaid disputes will be settled or not. 13. It is also contended on behalf of the judgment debtor that in view of the fact that the settlement talks were going on, there was no question of making payment until it was clear whether all the aforesaid disputes will be settled or not. 13. In the affidavit in support of the Notice of Motion, the applicant-judgment debtor has referred to Petition No. 65 of 1998 filed by the 2nd respondent herein on the basis of Insolvency Petition No. 54 of 1998 which, according to judgment debtor, has not been served upon him. It is, therefore, contended on behalf of the judgment debtor that on one hand an assurance was given by Shri Pramod Banka that till settlement talks were on, the judgment debtor was not to make payment of Rs. 10.00 lacs to respondent No. 1 and on the other hand respondent No. 1 proceeded to file Insolvency Petition No. 54 of 1998 which action demonstrates and proves mala fide and dishonest tendency on the part of respondent No. 1, and it is the case of the judgment debtor that respondents and in particular Shri Pramod Banka are guilty of "suppresio veri" and "suggestio falsi" as they have not disclosed the correct facts to the courts and have suggested falsely that the debtor has committed act of insolvency. 14. The applicant-debtor has also, in the affidavit, contended that in view of the aforesaid facts and circumstances, more particularly in view of the factum of payment of Rs. 10.00 lacs and acceptance by respondent No. 1 thereof without any dispute, the Court may, under section 90(5) of the Presidency Towns Insolvency Act, 1909, extend the time to make payment beyond the stipulated date, that is, from September 2, 1998 to October 14, 1998 being the date when the payment was made by the debtor. 15. So far as Petition No. 65 of 1998 is concerned, on behalf of the applicant-debtor, it is urged that the creditors in Petition No. 65 of 1998 have filed the said petition on the basis of Petition No. 54 of 1998. 15. So far as Petition No. 65 of 1998 is concerned, on behalf of the applicant-debtor, it is urged that the creditors in Petition No. 65 of 1998 have filed the said petition on the basis of Petition No. 54 of 1998. It is the case of the applicant-debtor that there is no debt payable by him to the creditors in Petition No. 65 of 1998 and on the contrary, the applicant-debtor has a valid counterclaim against respondents No. 2 herein for the reasons set out by the debtor in his affidavit in reply to Petition No. 65 of 1998. 16. The debtor has, in support of his contention that he is entitled to the condonation of delay, relied upon a ruling in (A.D. Gandhi v. S.L. Thakurdas)1, 1974 Bom.L.R. 119 wherein it has been observed as follows : "A judgment-debtor against whom an insolvency notice has been issued can, even at the stage of insolvency notice, not only take up the defences available to him under sections 9(i) and 9(A) of the Presidency-Towns Insolvency Act, 1909 and under sub-cls. (a) and (b) of Rule 52-B (5) of the Bombay Insolvency Rules, 1910, but he may also rely on relevant events, subsequent to the issue of insolvency notice and even after the expiry of the specified period, as may be covered by sub-cl. (c) of Rule 52-B(5) of the Bombay Insolvency Rules." In the aforesaid ruling it has also been observed : "The Insolvency Court has, under section 90(5) of the Presidency-Towns Insolvency Act, 1909, power in appropriate cases to extend time for compliance with insolvency notice although such power should be exercised sparingly and only in special cases, the object being always to ensure that manifest injustice has not taken place by reason of matter not in the control of the judgment-debtor and for no fault of his." It has been further observed to the effect :- "An order of adjudication visits serious consequences on the judgment-debtor and affects his very status. It is to be kept to view by the Court that the law of insolvency has been enacted not only for the benefit of the general body of creditors so that there may be equitable distribution of whatever assets are left with the judgment-debtor but also for the protection of the judgment-debtor himself. It is to be kept to view by the Court that the law of insolvency has been enacted not only for the benefit of the general body of creditors so that there may be equitable distribution of whatever assets are left with the judgment-debtor but also for the protection of the judgment-debtor himself. The provisions of the Act are to be construed strictly and, if possible, in favour of the debtor inasmuch as the status to be affected thereby." 17. Relying upon the aforesaid observations it has been vehemently urged on behalf of the judgment debtor herein that order of adjudication visits serious consequences on the judgment-debtor and affects his very status and, therefore, bearing in mind the events which have taken place, the same are required to be taken into consideration whilst deciding this application so that the status of the debtor is not affected thereby. 18. In the aforesaid ruling, a reference is also made to section 90(5) of the Presidency-Towns Insolvency Act, 1909, which empowers the Court to extend time which is in the following words : - "Where by this Act or by Rules the time for doing any act or thing is limited, the Court may extend the time either before or after the expiration thereof, upon such terms, if any, as the Court thinks fit to impose." 19. The Judgment debtor- applicant herein has sought to take advantage of the above provisions of the Insolvency Act and has made an application for extension of time to make payment even though the same has expired upon such terms and conditions as the Court thinks fit to impose, as it is the case of the debtor herein that as the amount has been paid by him, he has not committed any act of insolvency and, therefore, time deserves to be extended as otherwise a great prejudice would be caused to the debtor which ultimately would affect his status. 20. Shri Shah, appearing on behalf of the respondents-judgment creditors also relied upon the above ruling and has contended that the judgment debtor has failed to set out any special circumstances which would entitle the judgment-debtor to seek extension of time or condonation of delay. 20. Shri Shah, appearing on behalf of the respondents-judgment creditors also relied upon the above ruling and has contended that the judgment debtor has failed to set out any special circumstances which would entitle the judgment-debtor to seek extension of time or condonation of delay. It is vehemently urged on behalf of the judgment creditors that this ruling does not apply to the facts of the case in so far as it relates to the judgment-debtor as in the case, under reference the question involved is as to the setting aside of the decree which was the subsequent event which was required to be taken into consideration. Here the decree is not set aside but payment is made by the judgment (Debtor) on October 14, 1998 by which point of time an act of insolvency was committed by the judgment debtor as the insolvency notice was issued on July 17, 1998, the same was served on debtor on July 29, 1998 and the debtor was required to make payment or give security by September 3, 1998. 21. No doubt, there is substance in the argument advanced on behalf of the judgment debtor that the negotiations and talks of settlement were in progress to October 12, 1998 and when the negotiations and talks failed, the criminal application was heard and disposed of and the payment was made on October 14, 1998. However, the fact remains that on September 3, 1998 the debtor had committed an act of insolvency. The debtor having committed an act of insolvency, the judgment creditors have on September 22, 1998 filed a petition for adjudicating the judgment-debtor insolvent, being petition No. 54 of 1998. On September 30, 1998, respondent No. 2 herein filed Petition No. 65 of 1998 on the basis of act of insolvency committed by the judgment debtor with regard to the non compliance of the Insolvency Notice No. N/55 of 1998. 22. It is contended on behalf of the judgment creditors that if this application for setting aside the Insolvency Notice is allowed and delay is condoned, the same would defeat the rights and interest of other creditors to file the petition, as so far as the applicant-debtor is concerned, he is a defaulter with the Bombay Stock Exchange and there are several proceedings filed against him by various creditors as also criminal complaints. 23. 23. On behalf of the judgment creditors, it is also contended that if extension of time to the judgment debtor is granted, the same would frustrate Petition No. 65 of 1998 and also the claim of other creditors who are not aware of the act of insolvency committed by the judgment debtor herein. It is also vehemently urged on behalf of the judgment creditors that it is onerous responsibility on the Insolvency Court to ensure that the rights of the other body of creditors are not prejudiced. 24. On behalf of the judgment creditor, reliance has been placed on the judgment delivered by Justice Dhanuka (as he then was) in the case of (Sharad R. Khanna v. Industrial Credit and Investment Corp. of India Ltd.)2, reported in 1993(1) Bom.C.R. 546 wherein it has been observed as follows :-- "After coming into force of Amending Act, an Insolvency notice can be set aside only on grounds specified in section 9(5). Rule 52-B(5) has no legal efficacy to extent of inconsistency with the provisions inserted in Act 1909 by Amending Act 28 of 1978." The aforesaid observations are with reference to the judgment reported in 1974 Bom.L.R. 119 (supra) wherein reliance has been placed upon Rule 52-B sub-Cl. (5), which provides as follows:-- "(5) Any person served with an Insolvency notice may within the time allowed for compliance with that notice apply to the Court to set aside the Insolvency notice; (a) on the ground that he has paid the amount claimed or furnished security for the payment of the amount to the satisfaction of the creditor or his agent; (b) on the ground that he has a counter-claim or set-off which equals or exceeds the decretal amount or the amount ordered to be paid by him and which he could not lawfully set up in the suit or proceedings in which the decree or order was made; or (c) on any other ground which would in law entitle him to have the notice set aside" 25. Therefore, it is urged on behalf of the judgment creditors that the debtor cannot take advantage of Rule 52-B sub-Cl. (5)(v) as this law is no longer good law and no right is available to the judgment debtor to have the notice set aside on any other ground. 26. Therefore, it is urged on behalf of the judgment creditors that the debtor cannot take advantage of Rule 52-B sub-Cl. (5)(v) as this law is no longer good law and no right is available to the judgment debtor to have the notice set aside on any other ground. 26. However, in reply to this contention of the judgment creditors, it is contended on behalf of the judgment debtor that he is seeking extension of time under section 90(5) of the Presidency Towns Insolvency Act, 1909. The question arises as to whether the applicant/judgment - debtor herein is entitled to the extension of time. So far as the judgment reported in 1974 Bom.L.R. 119 (supra) is concerned, extension of time was not granted but the matter was referred back to the trial Court with observation that a persona may apply for extension of time under section 90(5) either before or after the expiration of 35 days if sufficient cause is shown. 27. It is vehemently urged on behalf of the judgment creditors that so far as the debtor herein is concerned, he has failed to show sufficient cause to condone delay or extend time and that the time cannot be extended retrospectively as time had expired as far back as on September 3, 1998. 28. On behalf of the judgment creditors, reliance has been placed on several authorities to support their contention that the act of insolvency having been committed, the creditors have a right to adjudicate the debtor as insolvent and even if the petitioning creditor does not want to prosecute his petition or wants the petition to be dismissed for want of evidence before the order is passed, the petitioning creditor is directed to advertise the fact that they want dismissal of petition and sufficient time is to be given to any other petitioning creditor to apply to the Court for substitution. Therefore, if the petitioning creditor is absent or petitioning creditors' claim is settled, the petition cannot be dismissed but an opportunity is required to be given to another creditor to apply for substitution as an act of insolvency committed enures for the benefit of general body of creditors. 29. So far as the instant case is concerned, the question arises whether the judgment debtor herein are entitled for condonation of delay in making the payment. 29. So far as the instant case is concerned, the question arises whether the judgment debtor herein are entitled for condonation of delay in making the payment. The basis on which the present application is made is that the judgment debtor was given to understand that until the claims are settled, the judgment debtor would not be required to make the payment of Rs. 10,00 lacs neither will their default would be considered as an act of insolvency. This is the contention and case of the judgment debtor in the affidavit filed in support of the Notice of Motion. 30. It is also the case of the judgment debtor that because of the settlement talks failed on October, 12, 1998, he immediately on October 14, 1998 through his advocate's letter addressed to the creditor's letter made payment to the petitioning creditors. A perusal of this letter is interesting as in this letter, which has been relied upon by the judgment debtor at Exhibit 3 written by the attorneys of the judgment debtor, reveals that there is no reference whatsoever to the assurances given by the judgment creditors or their representatives to the effect that as per settlement talks an amount of Rs. 10.00 lacs payable under the award was not required to be paid till the settlement talks were finalised. This understanding which was arrived at between the judgment creditors and judgment debtor has not been recorded in the letter neither does this letter record the fact that there was an agreement that the payment made at a later date after the expiry period would tantamount to the act of insolvency on the part of judgment debtor and that Insolvency Notice No. 55 of 1998 be set aside. 31. Curiously enough, the letter dated October 14, 1999, there is no reference whatsoever to the alleged settlement talks, payment being made at a letter date pursuant to the settlement talks, or the fact that it was agreed that delayed payment would not tantamount to an act of insolvency. Though the judgment debtor was aware of the fact that the payment was made after the period of 35 days expired, curiously enough at that point of time also that is on October 14, 1998 the judgment debtor did not make any application neither did he take out any proceedings for condonation of delay in making payment. Though the judgment debtor was aware of the fact that the payment was made after the period of 35 days expired, curiously enough at that point of time also that is on October 14, 1998 the judgment debtor did not make any application neither did he take out any proceedings for condonation of delay in making payment. The proceedings have been taken out by the judgment debtor in February, 1999 by which he seeks to condone delay of payment of Rs. 10.00 lacs to respondent No. 1, extension of time and setting aside the Insolvency Notice No. 55 of 1998 by which the act of insolvency committed by the judgment debtor was sought to be set aside. 32. So far, therefore, as the judgment debtor is concerned, though the act of insolvency has been committed as far as back as on September 3, 1998 when period of 35 days expired and payment was made on October 14, 1998 at which point of time also no application for extension of time or condonation of delay was made. 33. Though the contention of the applicant is that there were settlement talks between the parties and an arrangement was arrived at by which the applicant was informed that the payment made after 35 days would be accepted and would not be construed as an act of insolvency, the same is not recorded in the letter dated October 14, 1998. Further, the judgment debtor having failed to comply with the requisitions contained in the insolvency notice, has committed an act of insolvency which enures for the general body of the creditors. I am, therefore, of the opinion that the judgment debtor, namely, the applicant herein is not entitled to come before the Court at this stage and seek extension of time or condonation of delay. 34. Therefore, as the debtor has committed the act of insolvency which enures to the benefit of general body of creditors, the debtor is not entitled to any relief. Hence, Notice of Motion stands dismissed. Petition will not be heard before September 21, 1999. Certified copy expedited. Notice of motion dismissed.