Revision against dismissal of protection order application. Court held that protection order under Insolvency Act requires prior adjudication, but directed expeditious adjudication enquiry.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
MONDAY, THE 25TH DAY OF JULY 2016/3RD SRAVANA, 1938
CRP.No. 224 of 2016
CMA 44/2014 OF PRINCIPAL DISTRICT COURT, KOTTAYAM DATED 30-01-2016 IA.545/2013 IN IP.1/2013 OF SUB COURT, PALA
PETITIONER/ APPELLANT/ PETITI0ONER:
K.M.PAREETH,
AGED 63 YEARS, MOHAMMED, MANACKAL HOUSE, NADACKAL KARA, ERATTUPETTA, MEENACHIL TALUK.
BY ADV. SRI.RAJEEV V.KURUP
RESPONDENT(S)/RESPONDENT/ RESPONDENT:
M.N.MURALEEDHARAN NAIR, S/O NARAYANAN PILLAI, PROPRIETOR, PRAYIL TIMBERS, EXCHANGE ROAD, ALAPPUZHA
BY ADVS. SMT.ELIZABETH MATHAI IDICULLA
SRI.RACHEL JOSEPH
SRI.MOHAN IDICULLA ABRAHAM SRI.MARTIN D.ALUMKARA SMT.R.REMA MENON
THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON 25-07-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
PJ
K. RAMAKRISHNAN, J.
.................................................. C.R.P.No.224 of 2016
....................................................... Dated this the 25th day of July, 2016.
O R D E R
This revision is filed against the order in I.A.No.545/2013 in I.P.No.2013/2014 of Sub Court, Pala which was confirmed in C.M.A.No.45/2014 of Principal Sub court, Kottayam. The respondent herein filed O.S.No.209/2004 of Sub Court, Alleppey for realization of the amount and the suit was decreed and thereafter the decree was transferred to Sub Court, Pala for execution where it was numbered as E.P.No.76/2010. There the revision petitioner herein contended that he has no means to pay the amount. That contention was rejected and arrest warrant was issued against him. Though he challenged the same before this court, that was also dismissed. Thereafter he filed I.P.No.1/2013 before the Sub Court, Pala to adjudge him as insolvent. In that, he filed I.A.No.545/2013 under section 31 of Insolvency Act for protection order against the arrest. That petition was dismissed by the Sub Court, Pala as per order dated 18.8.2014. Though the revision petitioner filed C.M.A.No.44/2014 before the District Court, that was also dismissed, against which the present revision has been field.
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under the provisions of the Insolvency Act. It is for the insolvency court to consider as to whether he has got the means to discharge all the liabilities and if the court is satisfied that he has no assets or means to discharge the entire liability of the creditors, it is after adjudication, the court can adjudge him as an insolvent and initiate proceedings for discharge after appointing a receiver if any property is available for sale and discharge of the liabilities and then pass an order declaring him as insolvent ultimately if the amount is not sufficient to discharge the liabilities of the creditors. Section 31 of the Insolvency Act deals with protection order which says that any insolvent in respect of whom an order of adjudication has been made may apply to the Court for protection and the Court may on such an application make an order for protection of the insolvent from arrest and detention. It further says that a protection order may apply either to all the debts of the debtor, or to any of them as the Court may think proper and may commence and take effect at and for such time as the Court may direct and may be revoked or renewed as the Court may think fit. It further says that a protection order shall protect the insolvent from being arrested or detained in prison for any debt to which such order applies, and any insolvent arrested or detained contrary to the terms of such order shall be entitled to his release provided that no such order shall operate to prejudice the rights of any
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creditor in the event of such order being revoked or adjudication annulled. Any creditor shall be entitled to appear and oppose the grant of protection order. So it is clear from the section itself that only after an order of adjudication has been made in favour of the person, who applied for declaring him as an insolvent, then only granting protection order arises. In this case no such adjudication has been made so far. So under such circumstances, this court find no reason to interfere with the orders passed by the court below. However, while disposing the revision petition this court feels that a direction can be given to the Sub Judge, Pala to expedite the enquiry in I.P.No.1/2013 regarding adjudication as to whether the petitioner is entitled to be adjudged as insolvent or not as expeditiously as possible, at any rate, within four months from the date of receipt of a copy of this order. Needless to say that the respondent herein is entitled to raise all his contentions before the insolvency court as to whether insolvency application is maintainable as against him or not as well and if such a contention is raised, it is for that court to pass appropriate orders.
Once the petitioner is adjudged as insolvent or adjudication order is made under the provisions of the Insolvency Act, the dismissal of this petition will not be a bar for him to apply to that court to get protection order as provided under section 31 of the Act and if such an application is filed, the court below is at liberty
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to pass appropriate orders in that application. Any observation made by the court below in the impugned order by this court in this order shall not stand in the way of adjudicating the main insolvency petition and passing appropriate orders on the basis of the evidence adduced in that proceedings.
With the above directions and observations this revision petition is disposed of.
Sd/-
K. RAMAKRISHNAN, JUDGE.
/true copy/
P.S to Judge
cl
2 issues framed by the court
Whether a protection order under Section 31 of the Insolvency Act can be granted before an adjudication order is made.
Whether pendency of an execution petition or existence of means to pay is a bar to filing an insolvency petition.
2 provisions across 2 enactments
K.M.Pareeth
M.N.Muraleedharan Nair
K. Ramakrishnan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
