THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.M.S.A.41 OF 2008 JUDGMENT: The appellant herein is the petitioner in I.P.No.31 of 2000 on the file of the Court of II Additional Senior Civil Judge, Vijayawada. It was a creditor’s insolvency petition filed by him challenging that the sale deed executed by the first respondent in favour of the second respondent is to defeat and defraud the genuine creditors. According to the petitioner, on 22-01-1998 a sum of Rs.50,000/- was borrowed by the first respondent and when the amount was demanded the first respondent has executed a collusive and nominal sale deed to defeat his rights and consequently the alienation is not valid. The respondents have filed a counter contending that the debt claimed by the petitioner is not true. The first respondent, in order to discharge the lawful debts payable to the creditors who filed the suits in O.S.Nos.269 of 1997 and 286 of 1997, has sold the property and a sum of Rs.20,000/- was also paid to the petitioner and therefore there is no act of insolvency. On behalf of the petitioners, PWs.1 and 2 are examined and marked Exs.A-1 to A-6. On behalf of the respondents RWs.1 and 2 were examined and marked Exs.B-1 and B-2. After considering the material on record, the insolvency petition was dismissed and as against the said order A.S.No.4 of 2002 was filed and it was also dismissed. Now the points that arise for consideration are:- 1. Whether the first respondent has committed an act of insolvency? 2. Whether the alienations are not valid? POINTS:- The substance of the contention of the respondents that the alienation made by the first respondent in favour of the second respondent is for the purpose of discharging of the debts due to the other creditors and there is no act of insolvency. In fact, before the lower court, Exs.B-1 and B-2 were filed to prove that decrees are obtained against the first respondent and that they were discharged. The contention of the appellant that the property was sold for a lower value is not proved by any evidence. The appellant also did not dispute the fact of discharge of debts due under Exs.B-1 and B-2 after the sale of the property. Merely because the single creditor was left out, it cannot be said that there is an act of insolvency and there was an intention to defraud the body of the creditors. Before the lower court decisions reported in Vadamala Sanjeevi Reddy Vs. Ellappa Reddy and others [AIR 1967 A.P. 243] and also Pydimarri Venkateswarlu Vs. Pydimarri Jalamma [AIR 1969 A.P. 318] were relied upon, which goes to show that when the property was sold and some debts were discharged, the act of insolvency as contemplated under Section 6(b) of the Provincial Insolvency Act,1920 is not applicable. In fact relying on the above decisions, this court held in a decision reported in Gutta Nirmala Vs. Gutta Nageswara Rao and Others([1]) that in circumstance of similar nature when there is no intention to defeat or defraud the creditors, there is no act of insolvency. Therefore, there is no substantial question of law is involved in this appeal and on question of fact it was found that the sale in favaour of the second respondent is bonafide and for consideration. Therefore, the appeal is devoid of merits and is liable to be dismissed. In the result, the Civil Miscellaneous Second Appeal is dismissed. No costs. _______________________ N.R.L.NAGESWARA RAO,J 06-07-2011 TSNR [1] 2011 (4) ALT 171