THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY CIVIL MISCELLANEOUS APPEAL No.1070 of 1997 DATE:16.09.2009 Between: M. Hanmanthu … Appellant And K.V. Surya Kumar and others … Respondents THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY CIVIL MISCELLANEOUS APPEAL No.1070 of 1997 ORDER: The appellant filed I.P.No.4 of 1991 in the court of the Subordinate Judge, Nizamabad, under Section 10 of the Provincial Insolvency Act, to declare him as insolvent. It was pleaded that he is a civil contractor and executed the works of local municipality and P.W. Department. He alleged that on a request made by him, respondents 1 to 10 have extended hand loans, and on account of delay in payment of bills by the Government and other factors, he could not clear the debts. Reference is made to certain decrees obtained by the respondents. He pleaded that the liability, mentioned in ‘A’ schedule, as on the date of filing of the O.P., is to the tune of Rs.6,19,200/-, whereas his assets shown in ‘B’ schedule are worth Rs.80,400/-. The I.P. was contested by respondents 5 to 8. They pleaded that the appellant did not borrow any amount from respondents 1 to 4 and the claims in relation to them are only fictitious. It is further pleaded that the appellant is possessed of valuable immovable properties, in the form of buildings and agricultural lands, and he has concealed them in ‘B’ schedule. The details of the claims made by them as well as the other movable properties held by the appellant were not cited. Through its order, dated 18.07.1996, the trial court dismissed the I.P. Hence this appeal. Sri B.H.R. Chowdary, learned counsel for the appellant, submits that the appellant proved his case by adducing oral and documentary evidence, and the trial court has dismissed the I.P., by drawing certain inferences. He contends that though a vague allegation was made to the effect that the appellant was possessed of other properties, nothing was placed before the trial court. Though the contesting respondents are served with notices, they have not chosen to enter appearance. The proceedings under the Provincial Insolvency Act have serious legal repercussions. Normally, whenever a person has an obligation to others, he has to discharge the same under law. Failure on his part would enable the other party to enforce it, by instituting proceedings. If a person is declared as insolvent, he will be conferred with a right, which is otherwise not available. Therefore, the courts are required to be cautious and careful in accepting the claims of such nature. In the instant case, the appellant pleaded that he incurred debts towards respondents 1 to 10, to the tune of Rs.6,00,000/-, whereas his assets are worth Rs.80,000/-. To prove his case, he adduced the oral evidence of P.Ws. 1 to 4 and no documents were filed. On behalf of the respondents, R.W.1 was examined and Exs.B.1 to B.17 were filed. The trial court has also taken on record the documents in ‘C’ series being Exs.C.1 to C.19. The plea raised by respondents 5 to 8 that the appellant did not incur any liability towards respondents 1 to 4, was not contradictory, at all. The very fact that respondents 1 to 4 have chosen to remain ex parte, even after receiving notices, adds support to the contention of respondents 5 to 8. Be that as it may, a serious infirmity in the I.P. was pleaded and established by respondents 5 to 8. P.W.4 is none other than the father of the appellant. Through him, it was elicited that the joint family held vast extents of agricultural land and other immovable properties. The appellant did not choose to mention them in the schedule. Time and again, this Court held that the claim of the petitioner in the I.P. must be decided on the touchstone of honesty and truthfulness. If it is found that the appellant has made an attempt to keep away any properties from the purview of the I.P., that itself will constitute a basis to reject the petition. Once it is emerged that the appellant had substantial share in valuable extent of land and other property, and did not choose to mention the same in the I.P., that ground was sufficient to reject the I.P. This Court finds that there are no bona fides on the part of the appellant, and the trial court has correctly dismissed the I.P. Accordingly, the Civil Miscellaneous Appeal is dismissed. There shall be no order as to costs. ___________________ L.NARASIMHA REDDY, J 16th September, 2009 CBS HON’BLE SRI JUSTICE L. NARASIMHA REDDY C.M.A.No.1070 of 1997 16th September, 2009 CBS