IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.12.2011 CORAM THE HON'BLE MR. JUSTICE VINOD K.SHARMA I.P.No.130 of 2006 ORDER This petition under Sec.9(2), 10, 11, 12 and 13 of the Presidency Towns Insolvency Act (hereinafter referred to as "Act"), read with Order II Rule 1 of the Insolvency Rules, 1958, has been filed by the petitioning creditor for adjudicating the respondent herein as insolvent; and to direct that the estate of the respondent be vested with the Official Assignee, High Court, Madras, for being administered in a regular manner. 2 The respondent Mr.G.Ramkumar, borrowed money from the petitioning creditor by executing promissory notes, agreeing to repay the borrowed money with interest at the rate of 36% p.a. On failure of the respondent to discharge the liability, the petitioning creditor filed O.S.No.2503 of 2004 in the court of VIII Assistant Judge, City Civil Court, Chennai. The suit was decreed for a sum of Rs.1,15,000/- (Rupees one lakh fifteen thousand only), together with interest at the rate of 36% p.a. on Rs.1,36,645/- (Rupees one lakh thirty six thousand six hundred and forty five only) from 07.06.2004 till realisation, along with the cost of Rs.26,596/- (Rupees twenty six thousand five hundred and ninety six only). After the decree, the respondent paid a sum of Rs.59,000/- (Rupees fifty nine thousand only) till the date of filing Insolvency petition. 3 The respondent thereafter, failed to repay the amount which resulted in filing of Insolvency Notice No.16 of 2006 under Sec.9(2) of the Act, demanding a sum of Rs.2,21,533.30 (Rupees two lakhs twenty one thousand five hundred thirty three and paise thirty only). 4 Since the respondent refused to receive the notice, he was ordered to be served by way of substituted service by publication in tamil daily "Malai Sudar". On publication, the respondent appeared. 5 The petition is contested by the respondent, by filing counter taking a stand, that the respondent does not owe any amount to the petitioning creditor. 6 The case of the respondent, is that the borrowings were made from the husband of the petitioner, against which the respondent executed promissory notes and issued cheques in favour of the petitioner. 7 The case of the respondent further is that interest was regularly paid on the amount borrowed. Furthermore, the respondent has paid a sum of Rs.70,000/- (Rupees seventy thousand only) which was received by the counsel for the complainant in the criminal complaint filed by the petitioner herein. 8 It is the case of the respondent that the petitioner had undertaken to withdraw both criminal complaint and civil case on receipt of the money. That as against the settlement of liability, a sum of Rs.59,000/- (Rupees fifty nine thousand only) was paid. The further stand of the respondent is that he can meet the liability, therefore, cannot be declared as insolvent. 9 In support of the petition, the petitioning creditor appeared in the witness box as P.W.1, and supported the averments made in the petition. In addition, produced the following documentary evidence. Ex.P1 Certified copy of the decree dated 14.03.2005 in O.S.No.2503 of 2004 passed by the VIII Assistant Judge, City Civil Court, Chennai. Ex.P2 Insolvency Notice in I.N.No.16 of 2005 addressed to the respondent/debtor. Ex.P3 Returned cover with an acknowledgement cover with an endorsement "Intimation delivered, not claimed returned to sender" Ex.P4 Copy of Paper publication effected in tamil daily "Malai Sudar" on 31.08.2006. 10 In the cross examination, the petitioner admitted that after institution of this proceedings, the respondent has paid a sum of Rs.74,000/- (Rupees seventy four thousand only) towards the dues. The petitioner also showed ignorance about the amount referred to in the notice, and also the quantum of money for which the insolvency proceedings were initiated. The petitioner also states that no steps have been taken to effect the recovery. 11 In defence, the respondent appeared in the witness box as R.W.1 and supported the averments made in the counter. In the cross examination, he admitted that no appeal has been filed against the decree passed in the civil Court. 12 In the cross examination, a suggestion put to the respondent, by the petitioner that after filing of complaint under Sec.138 of Negotiable Instrument Act, the respondent has paid a sum of Rs.59,000/- (Rupees fifty nine thousand only), to the petitioning creditor, it was volunteered by him that he had paid a sum of Rs.70,000/- (Rupees seventy thousand only) in the criminal complaint. 13 He also denied the suggestion that he paid Rs.15,000/- (Rupees fifteen thousand only) before filing the suit and Rs.59,000/- (Rupees fifty nine thousand only) after filing the suit, thus totalling Rs.74,000/- (Rupees seventy four thousand only). It was admitted that on payment of cheque amount, the petitioning creditor withdrew the complaint filed under Sec.138 of the Negotiable Instrument Act against the respondent. However, he did not dispute that the decreetal amount was not paid. 14 In addition, the respondent also examined one Mr.R.Murugan, R.W.2. However, his evidence is not much important, as he had not answer any specific question, and his evidence is based on hearsay. 15 The petitioner placed reliance on the judgment of this Court in the case of M/s.Mohammed Siddique & Co. by Partners and 7 others vs. Ghanshamdas and another [1994-2 L.W.369] wherein it was held as under: "7. As regards the submission that the decree could have been executed in accordance with the provisions of the Code of Civil Procedure, it is sufficient to notice the provisions of S.9(2) of the Act which has been inserted by the Insolvency Laws Amendment Act, 1978. The provision deals with a case where the decree has become final, but, the payments under it have not been made by the judgmment-debtor. All cases relied on by the learned counsel for the appellants in support of his submissions are cases prior to 1978 and must be held to be irrelevant for the purpose." 16 However, on consideration, I do not find it to be a fit case for declaring the respondent as insolvent. There is a clear admission of the petitioning creditor that after institution of the suit, some amount has been paid. Even though the evidence lead by both the parties is sketchy, and does not inspire confidence, but at the same time, one thing is admitted that the respondent has been making some payment. 17 The contention of the learned counsel for the petitioner that in view of the Division Bench judgment of this Court in the case of M/s.Mohammed Siddique & Co. by Partners and 7 others vs. Ghanshamdas and another (supra), the remedy of execution of decree cannot be a bar to insolvency proceedings, cannot be disputed being settled law, but at the same time, the Court is not bound to declare a person as insolvent in all the cases merely because some amount is claimed to be due. In this case, part of the decreetal amount has been paid. The respective stand and evidence led by the parties shows that there were transactions even after passing of decree wherein the respondent paid some amount. It is also proved, that the respondent is a government employee and decreetal amount can be easily recovered even by attachment of property. Therefore, it is not a fit case where the respondent should be declared as insolvent. 18 No merit, dismissed. 19 However, the petitioner if so advised, can proceed with the execution of the decree in accordance with law after adjusting the amount admitted to have been received. No cost. vaan