This High Court dismissed a Civil Revision Petition challenging the denial of an application to set aside an insolvency petition. The debtor argued the petition was filed beyond the limitation period, but held that the act of 'going underground' continued until discovery, making the petition timely.
Revision petition dismissed at the threshold with no costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date : 18.04.2016
CORAM
THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR
C.R.P (PD) No.1197 of 2016 &
C.M.P.No.6570 of 2016
Radha
... Petitioner
vs.
Ramamoorthy
...Respondent
Civil Revision Petition filed under Article 227 of the Constitution of India against the order and decretal order in I.A.No.40 of 2015 in I.P.3 of 2011 on the file Principal District and Sessions Judge, Ariyalur dated 25.11.2015.
For Petitioner : Mr.V.Raghavachari
O R D E R
The debtor against whom a creditor's petition came to be filed under Section 9 of the Provincial Insolvency Act, 1920 in I.P.No.3 of 2011 on the file of Principal District and Session Judge, Ariyalur for adjudging him as insolvement, is the petitioner in the present revision.
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creditor's petition and the creditor's petition was not filed within three months from the date of alleged commission of the Act of insolvency, the debtor filed an application in I.A.No.40 of 2015 in the above said I.P.No.3 of 2011 for the rejection of the debtor's petition under Order VII Rule 11 CPC.
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petitioner that though an act on the part of the revision petitioner in going underground has been sought to be projected as an act of insolvency, the insolvency petition, as originally filed, recited the date of commission of such act of insolvency as 16.10.2010; that when the Court returned the petition questioning as to how the petition was filed in time in the light of Section 9(1)(c) of the Provincial Insolvency Act, the respondent herein/creditor corrected the date to 20.10.2010 and re-presented the same and that the same will show the act of insolvency alleged in the insolvency petition was illusory.
contention. Of course, the act of insolvency, namely going underground as contemplated under Section 6(1)(d)(ii) and 6(1)(d)(iii) of the Provincial Insolvency Act would have started on 10.10.2010 or even prior to that. But, so long as the debtor does not surface and make him available to be approached by the creditors,
every moment of such retreat shall amount to a fresh act of insolvency. Clear averment has been made in the insolvency petition that from 20.10.2010, the revision petitioner/debtor went underground disabling the creditors to communicate him and that debtor was not available in his dwelling house. As the said act of hiding and making inaccessible to the creditors continued on 20.10.2010, within three months from which date the insolvency
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petition came to be filed by the creditor, the revision petitioner cannot contend that the condition stipulated in Section 9(1)(c) of the Provincial Insolvency Act has not been complied with warranting rejection of the insolvency petition.
Accordingly, the revision petition is dismissed. No costs. Consequently, the connected miscellaneous petition is closed.
18.04.2016
Index : Yes/No Internet : Yes/No gpa
To
The Principal District and Sessions Judge Ariyalur
P.R.SHIVAKUMAR, J.
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gpa/-
C.R.P (PD) No.1197 of 2016 & C.M.P.No.6570 of 2016
Dated : 18.04.2016
2 issues framed by the court
Whether the insolvency petition was filed within the limitation period prescribed under Section 9(1)(c) of the Provincial Insolvency Act given the nature of the act of insolvency.
Whether the trial court's dismissal of the application to reject the insolvency petition under Order VII Rule 11 CPC for limitation is sustainable in revision.
4 provisions across 3 enactments
Radha
Ramamoorthy
P.R. SHIVAKUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
P.R. SHIVAKUMAR
Parties & counsel
