IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MRS.JUSTICE K.HEMA FRIDAY, THE 5TH DAY OF AUGUST 2011/14TH SRAVANA 1933 OPC.No. 893 of 2010 (O) ======================= IP.3/2010 of SUB COURT,KOTTARAKKARA PETITIONER(S)/PETITIONER ======================== 1 T.G.THOMAS, THEKKEDATHU, KIZHAKKE VEETTIL ULIYANADU VETTIKKAVALA VILLAGE KOTTARAKKARA TALUK. BY ADV.SRI.PHILIP ANTONY CHACKO SRI.P.M.SEBASTIAN RESPONDENT(S) ============= 1 K.ALEXANDER VAIDYAN, KADUVATHOTTATHIL VEEDU KIZHAKKETHERUVU AYAPPALLOOR MURI MELILA VILLAGE KOTTARAKKARA TALUK KOLLAM DISTRICT. BY ADV. SRI.ALEX VARGHESE THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 05-08-2011 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OPC.No. 893 of 2010 INDEX PETITIONER'S EXHIBITS: EXT.P1: CERTIFIED COPY OF THE ORDER DATED 30/10/2010 IN I.P NO.1589/2010 IN O.P. NO.3 OF 2010 BY THE SUB COURT, KOTTARAKARA. EXT.P2: THE TRUE COPY OF THE INSOLVENCY PETITION I.P NO.3/2010 DATED 23.9.2010 FILED BY THE PETITIONER BEFORE THE SUB COURT, KOTTARAKKARA EXT.P3: TRUE COPY OF THE STAY PETITION DATED NIL AND AFFIDAVIT FILED ALONG WITH I.A NO.1589/2010 IN I.P NO.3/2010 BY THE PETITIONER BEFORE THE SUB COURT, KOTTARAKKARA. EXT.P4: THE TRUE COPY OF THE AFFIDAVIT DATED NIL FILED BY THE RESPONDENT IN I.A NO.1589/2010 IN I.P. NO.3/2010 BEFORE THE SUB COURT, KOTTARAKKARA EXT.P5: THE TRUE COPY OF THE ORDER DATED 8.4.1997 IN C.R.P NO.1762/1996 BY THIS HON'BLE COURT. EXT.P6: THE TRUE COPY OF THE ORDER DATED 2.9.2003 IN I.A NO.183/2001 IN E.P. NO.39/1998 IN O.S NO.2/1992 BEFORE THE SUB COURT, KOTTARAKKARA EXT.P7: THE TRUE COPY OF THE ORDER DATED 18.3.2005 IN E.A. NO.219/2003 IN E.P NO.39/1998 IN O.S NO.2/1992 BEFORE THE SUB COURT, KOTTARAKKARA EXT.P8: THE TRUE COPY OF THE JUDGMENT DATED 25.8.2009 IN EX.TA NO.30/2005 BY THIS HON'BLE COURT EXT.P9: THE TRUE COPY OF THE ORDER DATED 10.2.2010 IN E.A NO.219/2003 IN E.P. NO.39/1998 IN O.S NO.2/1992 BEFORE THE SUB COURT, KOTTARAKKARA. /TRUE COPY/ P.A TO JUDGE K.HEMA, J. ---------------------------------------------- O.P. (Civil) No. 893 of 2010 ---------------------------------------------- Dated this day of 5th day of August,2011. JUDGMENT A petition was filed by petitioner before the Sub Court, under Section 7 and 9 of the Kerala Insolvency Act (`the Act', for short), for adjudging him as an insolvent. In the said petition, an interlocutory application was also filed by petitioner to stay the order of arrest issued against him by the same court in an Execution Petition. After hearing both sides, the Sub Court dismissed the interlocutory application and the said order is challenged in this petition. 2. According to petitioner, he has no sufficient means to pay the debt due to respondent, but the Sub Court issued a warrant of arrest against him in an Execution petition. Having filed a petition under Section 7 of the Act, the court below ought to have adjudicated the matter and pending disposal of the Insolvency Petition, a stay of the arrest ought to have been granted, it is contended. A mere pleading that petitioner is not having means is sufficient to entertain the Insolvency Petition O.P. (Civil) No. 893 of 2010 2 but, the court below failed to consider this aspect and refused to grant a stay and dismissed the petition for stay and hence, this petition is filed to set aside the said order. 3. Heard both sides. The maintainability of the Insolvency Petition itself is challenged in this petition. Learned counsel for respondent argued that in the light of the various provisions contained in the Act and also on the facts of this case, the Insolvency Petition filed by petitioner before the court below is not maintainable. Learned Counsel appearing for petitioner, argued that all the requirements of law for filing an Insolvency Petition are satisfied in this case and hence, the Insolvency Petition cannot be treated as not maintainable. 4. Learned Counsel for petitioner also argued that as per Section 13 of the Act, a mere pleading that petitioner has no means by itself is sufficient to entertain the Insolvency Petition and there is such a pleading in the petition. It is also submitted that there is absolutely no document to show that petitioner is having any means to pay the debt. Therefore, petitioner has every chance to succeed in the insolvency petition and court below ought to have granted an interim order staying the arrest O.P. (Civil) No. 893 of 2010 3 ordered in the Execution Petition, it is argued. 5. Learned counsel for respondent argued that it is not correct to say that there is no document to prove that petitioner is not unable to pay the debt. In the Execution Petition filed against petitioner, the very same court which passed impugned order entered a finding as per Ext.R(d)-order that petitioner has sufficient means to pay off the debt. The said order was challenged by petitioner before this Court in C.R.P. No.303 of 2010 and the order of the Executing Court was upheld by this court, as per order dated 27.7.2010 in the said C.R.P., as per the order, Ext.R(e). The petitioner has not challenged the said order and it has become final. Therefore, petitioner has not fulfilled the condition in Section 10(1), which enables him to file a petition, it is argued. 6. On hearing both sides and on going through the documents and records, I find that the question of maintainability of the Insolvency Petition has to be considered first. Section 7 of the Act lays down that if a debtor commits an act of insolvency, an insolvency petition may be presented and the Court may pass an order of adjudication, adjudging him an insolvent. As per O.P. (Civil) No. 893 of 2010 4 Explanation to Section 7, the presentation of a petition by the debtor shall be deemed an act of insolvency within the meaning of this section. Though it may appear on a first blush that a mere filing of petition is sufficient to entertain an insolvency petition and adjudicate petitioner as insolvent, it may not be so, for the following reasons. 7. The expression “Subject to the conditions specified in this Act” in Section 7 makes it clear that whatever is contained in Section7 is subject to the other provisions of the Act. Section 10(1) lays down that a debtor shall not be entitled to present an insolvency petition, unless he is unable to pay his debts and he also satisfies any of the conditions stated in Sub-clauses (a) to (c) of Section 10 (1). Therefore, one of the mandatory requirements to be satisfied by debtor to file an insolvency petition is that he is unable to pay his debts. 8. Section 24 of the Act reveals that at the commencement of the proceedings itself it is mandatory for the court to require proof of the fact that the debtor is entitled to present the petition. On the day fixed for the hearing or any subsequent day to which the hearing may be adjourned the court O.P. (Civil) No. 893 of 2010 5 shall insist for such proof from a debtor. Therefore, unless a debtor proves that he is unable to pay debt at the commencement of the proceedings itself, as per section 24 of the Act, his application shall not be entertained. 9. In a case in which there is an order of the court which shows that a debtor has means to pay the debt, that itself will be sufficient to hold that a debtor is not entitled to file an insolvency petition. Such an order of the court is sufficient proof for the fact that the debtor is able to pay the debt and that he is not unable to pay the debt. A debtor against whom an order is passed by a competent court that he is able to pay debt or has means to pay debt is not entitled to file a petition under section 7 of the Insolvency Petition, by virtue of section 10(1) of the Act. 10. In this case, there is an order of the Execution court which reveals that petitioner has sufficient means to pay the debt. After hearing petitioner and also on assessing the evidence adduced by him, the Execution Court issued Ext.R(d)-order in which it is specifically held that petitioner has sufficient means to pay debt. The said order was challenged by petitioner before this Court in C.R.P.No.303 of 2010 and as per Ext.R(e)-order dated O.P. (Civil) No. 893 of 2010 6 27.7.2010 this court upheld the findings and order of the Executing Court. 11. The petitioner did not challenge the order of this court but, allowed it to become final. In such circumstances, in view of the finding of the court that petitioner has sufficient means to pay the debt, it cannot be said that he is unable to pay the debt. Hence in the absence of proof that petitioner is unable to pay the debt, he will not be entitled to file an Insolvency Petition and his petition for adjudication as an insolvent ought not to have been entertained. It is needless to say that if the main petition under section 7 of the Act is not maintainable, no interim order can be passed to stay the arrest. Hence, the court below was only right in dismissing the petition to stay arrest. There is absolutely no reason to interfere with the impugned order. 12. Though this petition can be disposed of on the above findings and observations,in the peculiar facts and circumstances of this case, I find it necessary to speak some thing more on the history of the litigation. The facts of this case unfurls the sad plight of a decree holder, who is stated to be aged 76 years and who is made to run from pillor to post by the petitioner, O.P. (Civil) No. 893 of 2010 7 to get the decree executed. Though there is already an order of the Execution Court which is confirmed by this court that petitioner has sufficient means, petitioner has filed an insolvency petition, which is per se not maintainable. 13. It is often said, `the difficulties of an Indian litigant starts with the passing of the decree'. This case gives life to this theory. The records produced in this case also reveal that a suit for realisation of money was filed by respondent as early as in 1992 about 19 years back. A decree was passed against petitioner, directing him to pay Rs.1,23,352/- with interest and Execution petition was filed by the respondent about 17 years back, as early as in 1993 as E.P. 167/1993. The said petition was dismissed and in the revision filed before this Court, challenging the said order, this court held thus: “It is a case decided mainly on oral evidence. The evidence of DW.1 was accepted by the court below. The appreciation of evidence cannot be said to be faulty. In the result, the revision fails and it is accordingly dismissed. Needless to say that the revision petitioner will be entitled to file fresh application for arrest and detention of the first judgment debtor/respondent in case he is able to establish that the respondent is possessed of sufficient means”. O.P. (Civil) No. 893 of 2010 8 14. Thereafter, E.P No.39/1998 was filed for realisation of Rs. 1,23,352/- with 6% interest per annum. In the said Execution Petition, evidence was adduced and Execution Court considered whether petitioner has sufficient means to pay the decree debt and whether warrant can be issued against him. The Execution Court entered a finding in favour of respondent and the prayer of the respondent to issue warrant was allowed, as per order dated 8.7.2010 (vide Ext.R(d)]. 15. Execution court also found that petitioner's father-in- law, while examined (on behalf of petitioner herein) as PW3 in E.A No.219/03 filed in the Execution Petition gave evidence, which would by itself be sufficient to prove that petitioner was having sufficient income of his own and he is capable of paying the decree debt. PW3 deposed that the petitioner is a contractor, engaged in scaffolding construction work and that he is also engaging two workers under him. He also admitted that petitioner himself constructed the building in which he resides with his own fund. His deposition is marked as Ext.R (c). 16. The Execution Court also took note of the fact that one of the sons of petitioner is working abroad and another son is O.P. (Civil) No. 893 of 2010 9 working in Military. It was also noted that the petitioner and family are residing in the house, which according to PW3, was constructed by the petitioner himself. Respondent has also taken up a contention that petitioner caused his own father to settle certain extent of property (in which there is a house) in the name of petitioner's wife instead of petitioner himself during the pendency of proceedings. This was done with a view to defeat respondent from executing the decree and in the said property, it is submitted. The fact that the petitioner's father settled such property in favour of his wife and not to him is not disputed. 17. It was also contended by respondent that petitioner's father had another extent of property having 22 Ares, which is referred to as Item No.2 in Ext.R(f) which is a document issued by the Public Information Officer, Vettikkavala village office, pursuant to a request made by respondent to get the details of the property. Admittedly petitioner's father died in 1994 and he has right over the propperty as a legal heir. Execution court found that the petitioner is in a financially sound position individually and is fully capable of paying the decree amount. 18. The Execution Court also took note of the fact the O.P. (Civil) No. 893 of 2010 10 adamant stand of petitioner who deposed, while examined as PW1, that he will not pay the amount and he also refused to pay the amount. Learned counsel for respondent also argued that there is other evidence also to prove that petitioner is having sufficient means. Telephone bills issued to petitioner for various period are produced before this court and those documents will not show that petitioner has been regularly making payments for the telephone. 19. Despite all these, as per the order in a revision, this court granted to petitioner, two months time from the date of order to discharge the liability due under the decree. Warrant of arrest issued against the petitioner was ordered to remain in abeyance during the said period of two months. In case the decree amount is not paid within two months, it was also ordered that it will be open to the Executing Court to proceed, pursuant to the impugned order, without any further enquiry regarding the means of petitioner. 20.In such circumstances,the question of means of petitioner to pay the amount could not be re-agitated,it is argued. After expiry of the two months time, the warrant is also in force, O.P. (Civil) No. 893 of 2010 11 since the order is kept in abeyance only for two months. Hence, as per Ext.R(e), it was not open to the Execution Court to stay the arrest warrant but it was bound to proceed against petitioner, without any further enquiry regarding means of petitioner, as per Ext.R(e)-order. Therefore, the impugned order is only legal and proper and cannot be interfered with. 21. About 20 years have elapsed, after filing of the suit. The respondent has not so far been able to execute the decree, though about 17 years elapsed after filing of the Execution Petition. Respondent is stated to be aged 76 years. He was driven from court to court for the sole reason that he approached the court to get back the money which petitioner owed to him. 22. Taking note of the various facts and circumstances of the case, I am satisfied that respondent was harassed by petitioner. He was also abusing the process of the court by filing insolvency petition which is per se not maintainable. As per order of the court itself he is able to pay the debt and hence he is not entitled to file an insolvency petition.Taking into consideration, the history of this case,I am satisfied that unless exemplary costs O.P. (Civil) No. 893 of 2010 12 are not ordered invoking Article 227 of the Constitution, the same practices will be repeated by petitioner. 23. Though petitioner would claim he is unable to pay the decree amount of about Rs.1.25 lakhs, petitioner himself deposited Rs.25,000/- in these proceedings to obtain an interim stay of arrest warrant. The deposit was made pursuant to an order dated 6.12.2010 of this Court, in this O.P and the said amount is in deposit now. According to petitioner himself, he had gone even upto the Supreme Court challenging the decree in the suit. Admittedly, Rs.1.25 lakhs was deposited by petitioner's wife also before this Court in a proceeding, which arose from the same Execution Petition and such amount is also in deposit. 24. Learned counsel for the petitioner submitted that petitioner filed a petition to withdraw this Original Petition. This submission was made after this order was dictated in part in open court and the case was adjourned for completion of dictation. The dictation was almost over. The only reason stated is that petitioner is trying to settle the above matter, out of court. Learned counsel for the respondent submitted that there is no such move from the petitioner's side and even today, respondent O.P. (Civil) No. 893 of 2010 13 was not even contacted by petitioner or anybody on his behalf, though major part of this order was dictated by this court in open court on the previous posting of this case. 25. A request was also made by petitioner's counsel, to send the case to Lok Adalath, but respondent's counsel submitted that respondent is not even able to move around. He belongs to Kottarakara and it is difficult because of his physical inability to come over to this court for this purpose. He also submitted that there is absolutely no bonafides in the request made by petitioner and petitioner and petitioner has made it clear during his examination in court that he will not pay and his adamant stand is taken note of by the court below. I am satisfied of the submissions made. 26. In the above circumstances, I am not inclined to allow the belated request of the petitioner to withdraw this petition or to send it to Lok Adalath, since I am not satisfied of the bona fides. I am also fully satisfied that such a course adopted will only further delay the matter and it will only result in gross miscarriage of justice. After having spent considerable time for hearing and dictating this order in part, I am not inclined to O.P. (Civil) No. 893 of 2010 14 accept the highly belated request. I am satisfied that this is a fit case to order exemplary cost as a deterrence invoking power under Section 227 of the Constitution, to secure ends of justice and prevent any further misuse of the authority of the court. In the result, the following order is passed. (i) Petitioner is directed to pay an amount of Rs.25,000/- as exemplary cost to the respondent. (ii) The amount which is deposited by petitioner in court in these proceedings, pursuant to the order of this Court on 6.12.2010 shall be released to the respondent forthwith, towards the cost ordered above. This petition is dismissed. Sd/-K.HEMA, JUDGE ma /True copy/ P.A to Judge