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2021 DIGILAW 308 (AP)

Nakka Venkata Ramudu v. C. Ramireddy

2021-05-05

LALITHA KANNEGANTI

body2021
JUDGMENT Lalitha Kanneganti, J. - The present civil revision petition under Article 227 of the Constitution of India is filed assailing the order dated 16.03.2017 passed in I.P.(C.F.)No.2873 of 2017 by the learned Principal Senior Civil Judge, Ananthapuram whereby the petition filed by the petitioner under Section 10 of the Provincial Insolvency Act, 1920 (for short 'P.I. Act') was returned on the ground of jurisdiction. 2. The brief facts of the case are: The petitioner started chit fund business by investing the amounts borrowed from the respondents as shown in 'A' schedule property on different dates by executing blank pronotes and cheques as security. During the course of the business, the petitioner gave amounts to his customers but they did not repay the amounts and the petitioner was unable to collect the amounts. Therefore, the petitioner sustained huge loss in the business and he is not in a position to clear the amounts borrowed from the respondents. The respondents are pressurizing the petitioner to repay their amounts. They are sending their henchmen irrespective of timings and making demands for repayment of the amounts. The petitioner being unable to bear the said pressure, had filed the above mentioned insolvency petition. 3. The Court below returned the said petition by docket order dated 16.03.2017 holding that as per Section 63 of Insolvency and Bankruptcy Act, 2016, Civil Court has no jurisdiction to try insolvency petitions. Assailing the same the present revision is filed. 4. Heard Sri Narasimhulu Parise, learned counsel for the petitioner. Though notice are served on some of the respondents, there is no representation on their behalf. 5. The petitioner filed insolvency petition on the file of the Principal Senior Civil Judge, Anathapuram under Section 10 of the P.I.Act to adjudge him as insolvent vide C.F.No.2873 dated 14.03.2017. The same was returned by the learned presiding officer on 16.03.2017 with an endorsement which reads thus: "As per Section 63 of Insolvency and Bankruptcy Act, 2016, Civil Court has no jurisdiction to try I.Ps. Hence returned to be present in proper Court." 6. The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016) came into force from 28.05.2016. The lower Court referred to Section 63 in Chapter-VI of Part II of the P.I. Act, which deals with adjudication authority for Corporate Persons. Hence, Section 63 of Chapter-VI does not apply to the case on hand. 7. The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016) came into force from 28.05.2016. The lower Court referred to Section 63 in Chapter-VI of Part II of the P.I. Act, which deals with adjudication authority for Corporate Persons. Hence, Section 63 of Chapter-VI does not apply to the case on hand. 7. The petitioner, an individual, filed insolvency petition to adjudge him as insolvent. Hence, Part III of Act 31 of 2006 would be applicable. However, Section 49(1) defines adjudication authority means Debts Recovery Tribunal constituted under sub-section (1) of Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Chapter VI of part-III of the P.I. Act also makes it clear about the adjudicating authority for individuals and partnership firms and express of Civil Courts. 8. The learned counsel for the petitioner submits that though the Debt Recovery Tribunals are having territorial jurisdiction over the place where the individual debtor actually and voluntarily resides as per Section 179 of the P.I. Act 31 of 2016, the Government has not notified the Debt Recovery Tribunals to deal with these matters. Having no other option, he invoked the jurisdiction of the Civil Court to adjudge him as insolvent. 9. When a similar issue came up for consideration before this Court in W.P.No.7110 of 2019 with regard to constitution of Rent Control Courts under Andhra Pradesh Residential and Nonresidential Premises Tenancy Act, 2017 (Act 10 of 2018), placing reliance on Commissioner of Income Tax, Orissa Vs. Dhadi Sahu, (1994) Supp1 SCC 257, held that till the adjudicatory machinery contemplated under an enactment is brought into existence, the arrangement that has been functional prior to it would continue." 10. In the light of above, since the Debts Recovery Tribunals are yet to be notified to deal with the matters as per Act 31 of 2016, this Court feels it just and proper to set aside the order impugned. 11. In the result, this civil revision petition is allowed by setting aside the docket order dated 16.03.2017 passed in I.P.(C.F.) No.2873 of 2017 by the learned Principal Senior Civil Judge, Ananthapuram and the said Court is directed to number the insolvency petition, if it is otherwise, in order and proceed with same as per Law. There shall be no order as to costs. 12. As a sequel, pending miscellaneous petitions, if any, shall stand closed.