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2007 DIGILAW 949 (MAD)

Krishnan, Tiruvannamalai Taluk & District v. Perumal Chettiar, Tiruvannamalai Taluk & District

2007-03-15

R.BANUMATHI

body2007
Judgment :- Challenging issuance of Sale Notice and issuance of Proclamation of Sale, Judgment Debtor has preferred this Revision. 2. This Revision arises on the following facts:-Respondent has obtained a Money Decree in his favour for a sum of Rs.9,525/-with subsequent Interest and costs in O.S.No.35 of 1998 based on a Promissory Note executed by Revision Petitioner. For realisation of the Decree amount, Respondent / Decree Holder filed E.P.No.52 of 2001 on the file of DMC, Tiruvannamalai. The Judgment Debtor was arrested and produced before the Court. As Judgment Debtor has not paid the amount, he was sent to Civil Prison and he was lodged in Central Prison, Trichy. Revision Petitioner filed an Insolvency Petition in I.P.No.13 of 2002 on the file of DMC, Trichy and the Petition was allowed on 211. 2002. Immediately on filing of Insolvency Petition, Judgment Debtor was released from Civil Prison. Judgment Debtor had not further pursued the Insolvency Petition and got himself discharged. 3. Decree Holder has again filed Execution Petition in E.P.No.164 of 2002 on the file of DMC, Tiruvannamalai for Attachment and Sale of House Property and another Item of Immovable property. Judgment Debtor entered appearance and contested the matter. Execution Court has ordered sale and issued Proclamation to proclaim and sale on 01.09.2004. Challenging Proclamation of Sale, the Judgment Debtor has preferred this Revision. 4. Main contention of Revision Petitioner is that he was declared to be an Insolvent in I.P.No.13 of 2002 and once Insolvency is declared, all the property of the Insolvent would be vested in Court or with an Official Receiver as per Sec.28(2) of the Provincial Insolvency Act and only Official Receiver has to bring the property to sale to discharge the Debts. It was further contended that ignoring the order in I.P.No.13 of 2002, Execution Court has erroneously ordered Attachment of Properties and ordered Sale in E.P.No.164 of 2002. Before the Execution Court, Judgment Debtor had also filed Counter to that effect and also examined himself as R.W.1. .5. Under the Provincial Insolvency Act, a Debtor whose debts amount to Rs.500/-or who is under arrest or imprisonment in execution of a decree for payment of money or against whom an order of attachment in execution of such decree has been made, may apply to the Court for being adjudicated as insolvent. .5. Under the Provincial Insolvency Act, a Debtor whose debts amount to Rs.500/-or who is under arrest or imprisonment in execution of a decree for payment of money or against whom an order of attachment in execution of such decree has been made, may apply to the Court for being adjudicated as insolvent. After a debtor is adjudicated an insolvent, his assets come within the control and purview of the Insolvency Court and he is afforded certain protection and immunities from arrest and his property being proceeded with in execution of decrees. Remedies by way of suits etc., cannot be taken against him. The State of Insolvency begins from the date of adjudication and ends (a) when a discharge is given by the Insolvency Court under Section 41 of the Provincial Insolvency Act, or (b) when insolvency is annulled under the Act. An order of annulment of adjudication of insolvency may be passed under Sec.35 or Sec.43 of the Act. Annulment under Sec.35 is ordered where a debtor ought not to have been adjudicated as insolvent, or, in case debts of the insolvent have been paid in full. According to Sec.43 of the Act, if debtor does not apply for an order of discharge within the period specified by Court, or, does not appear when application for discharge comes up for hearing, the Court may annul the insolvency. This latter provision is apparently a measure of penalty for any default on the part of insolvent so that he does not enjoy any immunities or safeguards provided by his continuing as an insolvent. However, the effect of annulment, whether made under the provisions of Sec.35 or Sec.43 of the Act, is the same viz., those provided under Sec.37 of the Act. The person is restored back to the original position of a debtor before he was adjudicated an insolvent. .6. Sec.13 of the Act imposes upon the Petitioning Debtor to state the amount and the particulars of all his property and of his debts and he is to make a Statement that he is unable to pay his debts. Sec.24 of the Act imposes upon the duty of the Court, requiring proof of inability of the Judgment Debtor. .6. Sec.13 of the Act imposes upon the Petitioning Debtor to state the amount and the particulars of all his property and of his debts and he is to make a Statement that he is unable to pay his debts. Sec.24 of the Act imposes upon the duty of the Court, requiring proof of inability of the Judgment Debtor. For the purpose of proving his inability to pay his debts, Judgment Debtor is required to furnish such proof as to satisfy the Court that there are prima facie grounds for believing the sale. Under sub-sec.2 of Sec.24 of the Act, the Court shall examine the Debtor as to his conduct, dealings and property in the presence of such Creditors as appear at the hearing and the Creditors shall have the right to question the Title therein. In this case, in I.P.No.13 of 2002, the Court does not seem to have proceeded to carry out that obligation imposed upon it by sub-sec.(2). In fact, apart from Respondent / Decree Holder, no other Creditors were impleaded as Respondents in I.P.No.13 of 2002. Revision Petitioner has not produced any material showing that he has placed the proof before the Court to satisfy that there are prima facie ground for believing his inability to pay the debts. It is not difficult to perceive that Insolvency Petition I.P.No.13 of 2002 must have been filed only for the purpose of getting release from Civil Prison. 7. The above conclusion is fortified by the subsequent conduct of the Judgment Debtor. DMC, Trichy has allowed I.P.No.13 of 2002 granting six months time to the Judgment Debtor for getting himself discharged. There is no evidence showing that Judgment Debtor has further pursued the Insolvency Petition by applying for discharge. Unless discharge is given by the Insolvent, there is no bar for filing Second Execution Petition. In the Insolvency Petition, Petitioner has stated that he does not own any moveable or immovable properties, which is demonstrably false. The second Execution Petition has been filed for realisation of the amount by Attachment and Sale of Immovable properties. Item No.1 relates to a terraced house in Kottavur Village, Tiruvannamalai District and Second Item relates to a landed property in S.No.224/1-B-2 – 2.50 acres with Well thereon. The second Execution Petition has been filed for realisation of the amount by Attachment and Sale of Immovable properties. Item No.1 relates to a terraced house in Kottavur Village, Tiruvannamalai District and Second Item relates to a landed property in S.No.224/1-B-2 – 2.50 acres with Well thereon. Resisting Second Execution Petition for sale of immovable property, Judgment Debtor contended that Item No.1 – House Property belonged to his Father Thulasi Gounder and Item No.2 belonged to his Minor Son – Vinoth Kumar and one Ramachandran and that properties of others cannot be brought to Attachment. The contention of Judgment Debtor that Item No.1 belonged to his Father cannot be countenanced. Though in his Chief-examination, the Judgment Debtor has stated that Item No.1 – House Property belongs to his Father, no document had been produced evidencing the same. On the other hand, the Decree Holder has produced House Tax Receipts showing that House Tax is paid in the name of the Judgment Debtor. Admittedly, the Judgment Debtor is residing in the house. In the absence of any proof, the contention of the Judgment Debtor that Item No.1 – House Property belonged to his Father was rightly negatived by the Execution Court. Likewise, Settlement Deed for Item No.2-Landed Property is said to have been executed in favour of Judgment Debtors Son and the said property is stated to be self-acquired property of Father of Judgment Debtor. Absolutely no document had been produced showing that Item No.2-Landed Property is self-acquired property of Judgment Debtors Father. By perusal of Encumbrance Certificate, it is seen that the Settlement Deeds were executed only in 1996. Serious doubts arise as to the intention behind the Settlement Deeds. Rightly, Execution Court has ordered sale of Item No.2 – Landed property also. .8. When no material had been produced showing that Judgment Debtor has been discharged, the order in I.P.No.13 of 2002 is not an impediment for proceeding with the Execution Petition to sell the immovable properties. Nor can it be said that the properties of the Judgment Debtor is vested with the Official Receiver? Though the suit is of the year 1998, the Decree Holder was not able to enjoy the fruits of the Decree because of the dilatory tactics adopted by the Judgment Debtor. This Revision is bereft of merits and the same is bound to fail. 9. Though the suit is of the year 1998, the Decree Holder was not able to enjoy the fruits of the Decree because of the dilatory tactics adopted by the Judgment Debtor. This Revision is bereft of merits and the same is bound to fail. 9. For the foregoing reasons, the issuance of Proclamation dated 03.06.2004 by District Munsif, Tiruvannamalai in E.P.No.164 of 2002 in O.S.No.35 of 1998 is confirmed and this Civil Revision Petition is dismissed. No costs. Interim Stay already granted on 30.08.2004 in C.M.P.No.13438 of 2004 is vacated and the Petition is dismissed. Consequently, the connected V.C.M.P.No.309 of 2006 is allowed. The Execution Court is directed to proceed with the further proceedings expeditiously and dispose of the Execution Petition in accordance with law.