HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO C.M.S.A. No.10 OF 2006 JUDGMENT: The appeal is filed against the Judgment in A.S.No.113 of 2004 on the file of the I Additional District Judge, Ongole, setting aside the order in I.P.No.14 of 2002 on the file of the Additional Senior Civil Judge, Ongole. 2. The 1st respondent herein filed an application to declare him as an insolvent on the ground that he has become indebted to others and the appellant herein obtained a decree in O.S.No.728 of 1999 and his assets are below the liabilities. The appellant herein and others contested the application. The Insolvency Court found that the 1st respondent in this appeal has suppressed the assets and dismissed the application. As against that order, an appeal was preferred in A.S.No.113 of 2004 on the file of the I Additional District Judge, Ongole. The appellate Court set aside the same and allowed the appeal. Aggrieved by the said order, the second present appeal is filed. 3. This being a second appeal, the point that arises is for consideration is whether that the 1st respondent has suppressed his assets and also gave wrong particulars of the debts and approached the Court with unclean hands and as per the decision reported in Dasari Srihari Rao Vs. Talluri Haranadha Babu (2002(2) Law Summary 89), the petition is liable to be dismissed and the order of the appellate Court is not valid. 4. As can be seen from the evidence of the 1st respondent in his application, he was arrested as he was unable to pay the debts and he was released after informing the Court that he intends to file an application for the insolvency and his debts are nearly Rs.4,00,000/- and the assets owned by him are not sufficient. The appellant herein contended that the debts of some of the respondents are created and in fact, respondents Nos.3 and 6 in the original petition, who are creditors, were examined and they stated that the petitioner i.e., 1st respondent herein, has not borrowed any amounts from them. Insolvency Court found that the debt due to the appellant herein is only Rs.15,000/- and a compromise decree was passed after the institution of the suit by the appellant herein and the 2nd respondent in the lower Court. The insolvency Court after relying upon the above dismissed the insolvency petition. Whereas the appellate Court came to the conclusion that though the debts of respondents Nos.3 and 4 are excluded, still the debts of respondents Nos.5 and 6 are worth of Rs.2,00,000/- and the total liability is Rs.2,30,000/- and item No.1 is valued at Rs.30,000/- and there is no proof of any other property owned by the 1st respondent. Accordingly, the appeal was allowed. 5. Therefore, as matter stands even if the above decision is taken into consideration or respondents Nos.3 and 4 in the insolvency petition have disowned the debts, the fact remains that the other debts are of Rs.2,30,000/- and the assets are evidently less and the petitioner was brought under arrest in execution of the decree and therefore, the claim of the 1st respondent to be declared as insolvent cannot be said to be baseless. It is a case where the genuineness of the other debts can also be decided by the official receiver and if any assets are suppressed, they can be proceeded with. Therefore, there are no merits in the appeal. Accordingly, the second appeal is dismissed. There shall be no order as to costs. _______________________________ JUSTICE N.R.L. NAGESWARA RAO Date:18.10.2011 INL