High CourtsDivision Bench(1957) 06 KL CK 0010

Central Banking Corporation of Travancore (Ltd.), Alleppey vs Kochusakthi Kaimal

High Court Of Kerala · Decided on 12 June 1957 · Citation: (1957) KLJ 620

HON’BLE JUDGES
M.S. Menon, J · K. Sankaran, J
RESULT
Dismissed
CASE NUMBER
A.S. No. 44 of 1956 (K)

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Judgment

2 paragraphs · 420 words

K. Sankaran, J.—This is an appeal by the creditor-petitioner in I. P. 23/1951 on the file of the Mavelikara District Court. The petitioner is a bank which had obtained a decree against the respondent. When the bank tried to enforce the decree against the judgment-debtor respondent, he filed a series of objections in the execution court and failed in those objections. Finally he filed an original petition u/s 16 of the Debt Relief Act of Travancore (Acts II and III of 1116). Therein he had alleged that he was not in a position to pay off his debts and therefore he is surrendering all his assets to the Court for distribution among his creditors, after setting apart 1/4 of such assets to him subject to the limit prescribed u/s 16, Debt Relief Act. This admission of inability to pay his debts is made the basis of I. P. 23/1951 wherein it is alleged that the judgment-debtor has committed an act of insolvency. Accordingly it was prayed that an order may be passed adjudicating him an insolvent. The lower court held that the admission made by the judgment-debtor in his petition u/s 16 of the Debt Relief Act cannot amount to an act of insolvency and accordingly dismissed I. P. 23/1951. The appeal is against that order. We are clear that there is no merit or substance in this appeal. The Debt Relief Act was intended as an ameliorative measure in favor of debtors. It cannot be said that the invoking of the relief afforded by such a statute is an act of insolvency. Special provision to that effect has also been made in sub-section (2) of section 22 of the Debt Relief Act. There it is expressly stated that no claim by a debtor to the benefits conferred by section 9 or section 16 of the Debt Relief Act, shall be deemed to be an act sufficient to constitute the insolvency of the debtor. In the face of this provision, the lower court''s order dismissing I. P. 23/1951 is not open to any attack. The creditors'' remedy lies in agitating his claim in D. R. P. 7/1951 filed by the debtor u/s 16 of the Debt Relief Act. There the creditor can see that all the assets of the debtor are made available for distribution among the creditors after setting apart the share due to the debtor u/s 16.

2.

In the result, this appeal is dismissed. In the peculiar circumstances of this case we make no order for costs.