# FIRM MUKAND LAL \'EER KUMAR & ANR v. SRI PlJRUSHOTl'A\'I SINGH & ORS

- **Citation:** [1968] 2 S.C.R. 862
- **Court:** Supreme Court of India
- **Decided:** 1968-01-31
- **Case number:** Civil Appeals Nos. 1167 to 1169 of 1965
- **Bench:** J. C. Shah, V. Ramaswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/firm-mukand-lal-eer-kumar-anr-v-sri-pljrushotl-a-i-singh-ors-4252
- **Pages:** 8

## Headnote

Ptorincial /11soh·ency Act (5 of 1920), s. 9(l)(c)-Trv.11sfer of pro.
perry by Dl'ed-All<'1-:ed act "-' insolvcucy-Threr 1non1hs pt'Tiod start.t
w11etlzer frnnz• execution or rl'gistrlltion-Whethcr finn can be adjudicated
irnolvent-P<1rtners when can he adjudicated i1no/l•ent.
M a p;.1nncr of. a firn1 cxccurcJ a dccJ of gif1 in Octob.;r, 1957 of
a property. \\hich v•as not partnl'r..,hip property.
·rhe deed of gifts v.·as
rcgi>tcrcd in March 1958.
In April, ~lay, 1958 and January 1959, pelirions \\'ere tiled alleging thar the firn1 and its l\l/O p<irlncrs had comn1i1te<l
acts of in1,olvcncy <11HI therefore, thl!y shoulU he declared in~olv·~nts. The
lo\\·cr court<; .a<ljudic;11ed lhe firm and
rh-~ partner-; insolven!.
'fhl! High
C."ourr, in revision. confinncd th1.? adjudica1ion of insolvency \\'ith rcgan.J
to lhc firn1 and \I. hut set a.;,idc \\'ilh regard 10 the other partner. In
11ppeal to thi_.; Couri it \\'3\ conrendeJ lhJt (i) the siarling point of the
three n1onth"' period
pr·~scrihcd under s. 9(i) (c) of the Provincial Jn-
.!,Q)vcnc)' Ac1 .... hould he lhc d;ite of execu· i0n of the Jeed of gifr and not
the date of rcgisrration; (ii) no order of ;tdjudication could be made agains1
;1 firm hut it could only be n1aUc
agJin~I the parlners individually; and
(iii) the Jirn1 should no~ have hecn d·2clarcU
in~olvcnt n1ercly because of
1hc deed of g1fl cx·,culed hy \1.
llELD: (il Scciion 49 of the Indian Rcgi!:>lra1ion Act implies thal a
do..:umcnt by rc<i<.On of ih c:xecution·alone cannot h;ivc lhc effect of lr'1n.;;-
fcrring the properly.
The deed of gift cxccut-:!d by f\f, could not be considered 10 he an acr of in:-.olvcncy unless a v<1lid tr<1nsf·.!r of properly \\'as
n1adc hv I hat Uocun1cn1 and such ;1 valid t r;.insfer could he said to hu\-e
been m;de only when the docun1cnt \Vas registered. J866 D-FJ
.J.akh111i Cliond v. Kt·\110 R.t1111. 1.L.R. 16 L<1h, 735. Sar~·atl1adu /)h'lJr"yya' v. K uruba Suhh11n11a, I. L. R. 5 8 \.fad. J 66 and /)istril·I Bua rd Bij11or
v. A1 uht1111n1t1d A hdul S:do111, I. l. R, J 94 7 AIL 624, approve<l.
U ()11 M~11u1g v. ,\fa1111,1,• Shwc //paung, A.l.R. 1937 Rangoon 446, <lisapprove<l.
(ii) An ord1·r of adjuJicarion could be made
again~r the
firm
in
rhc prc~cnt case if the proper condition . .;; \\'ere sa1isfied. Seclion 79(2) (c)
of the Act provides for rules to he ma<lc bv the High Court as to the
procedure to he follo\1.-'Cd \\'h-.!11 :he debtor is a firn1.
'rhis section, therefore. ;1ssumc) rhat ;ut adjudication order can
he n1ade
under !he Act
againsr 1hc firm in the firm·s name. [~67 G-l~]
J:'x ptirlt' /llc1i11 (1879)12 Ch. D. 5~2. rcrcrred to.
(iii) Jn order to support an adjudication again5t a firm ihcrl' n1ust be
proof thal c;1ch of the partners h;1~ committed some act Of insol\'cncy. If,
ho"·ever, a joint acr ol insoh·ency iS relied upon it must be shoy.·n to be
the aL"t of <111 rhe
parln~rs. 1\n or<lcr for adjudication can also be made
<1J!ains1 a firn1 if 1hcrc v.--;is an ac 1 of insolvency by an agent of 1he firm
"·hich W<tS !luch :is n1us1 ncccs\arily he in1ru1ed to lhC firm.
·rh~ cxpla.-
n:i!il1n ro s. 6 of the Acr docs nor by do\\·n !hat an act of insolvency of
•
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FIRM MUKAND LAL v. PURUSHOTAM (Ramaswami, J.)
863
the agent shall. be attributed to the principal but that it ma~ .. ~e treated asthc Act of the principal. [868 E, F]
·
rfhe on.Jer of the lower court, so far it adjudicated the registered firm
as insolvent. rnu~t be· set aside.
The property of which M made gift
was not a partnership property an<l
ther·~ was no collective act of insol·
vcncy allcgc<l on behalf of all the ·partners <;Jf the firm.
Re : lvlvhanuul Hasan1 & Co. 24 Born. l.R. 861 and Gopal Naidu v.
Mohan/al Kan'yafol, LL.R. Mad. 189. referred to.

## Text

FIRM MUKAND LAL \'EER KUMAR & ANR.
v.
SRI PlJRUSHOTl'A\'I SINGH & ORS.
January 31, 1968
[J. C. SHAH AND V. RAMASWAMI, JJ.)
Ptorincial /11soh·ency Act (5 of 1920), s. 9(l)(c)-Trv.11sfer of pro.
perry by Dl'ed-All<'1-:ed act "-' insolvcucy-Threr 1non1hs pt'Tiod start.t
w11etlzer frnnz• execution or rl'gistrlltion-Whethcr finn can be adjudicated
irnolvent-P<1rtners when can he adjudicated i1no/l•ent.
M a p;.1nncr of. a firn1 cxccurcJ a dccJ of gif1 in Octob.;r, 1957 of
a property. \\hich v•as not partnl'r..,hip property.
·rhe deed of gifts v.·as
rcgi>tcrcd in March 1958.
In April, ~lay, 1958 and January 1959, pelirions \\'ere tiled alleging thar the firn1 and its l\l/O p<irlncrs had comn1i1te<l
acts of in1,olvcncy <11HI therefore, thl!y shoulU he declared in~olv·~nts. The
lo\\·cr court<; .a<ljudic;11ed lhe firm and
rh-~ partner-; insolven!.
'fhl! High
C."ourr, in revision. confinncd th1.? adjudica1ion of insolvency \\'ith rcgan.J
to lhc firn1 and \I. hut set a.;,idc \\'ilh regard 10 the other partner. In
11ppeal to thi_.; Couri it \\'3\ conrendeJ lhJt (i) the siarling point of the
three n1onth"' period
pr·~scrihcd under s. 9(i) (c) of the Provincial Jn-
.!,Q)vcnc)' Ac1 .... hould he lhc d;ite of execu· i0n of the Jeed of gifr and not
the date of rcgisrration; (ii) no order of ;tdjudication could be made agains1
;1 firm hut it could only be n1aUc
agJin~I the parlners individually; and
(iii) the Jirn1 should no~ have hecn d·2clarcU
in~olvcnt n1ercly because of
1hc deed of g1fl cx·,culed hy \1.
llELD: (il Scciion 49 of the Indian Rcgi!:>lra1ion Act implies thal a
do..:umcnt by rc<i<.On of ih c:xecution·alone cannot h;ivc lhc effect of lr'1n.;;-
fcrring the properly.
The deed of gift cxccut-:!d by f\f, could not be considered 10 he an acr of in:-.olvcncy unless a v<1lid tr<1nsf·.!r of properly \\'as
n1adc hv I hat Uocun1cn1 and such ;1 valid t r;.insfer could he said to hu\-e
been m;de only when the docun1cnt \Vas registered. J866 D-FJ
.J.akh111i Cliond v. Kt·\110 R.t1111. 1.L.R. 16 L<1h, 735. Sar~·atl1adu /)h'lJr"yya' v. K uruba Suhh11n11a, I. L. R. 5 8 \.fad. J 66 and /)istril·I Bua rd Bij11or
v. A1 uht1111n1t1d A hdul S:do111, I. l. R, J 94 7 AIL 624, approve<l.
U ()11 M~11u1g v. ,\fa1111,1,• Shwc //paung, A.l.R. 1937 Rangoon 446, <lisapprove<l.
(ii) An ord1·r of adjuJicarion could be made
again~r the
firm
in
rhc prc~cnt case if the proper condition . .;; \\'ere sa1isfied. Seclion 79(2) (c)
of the Act provides for rules to he ma<lc bv the High Court as to the
procedure to he follo\1.-'Cd \\'h-.!11 :he debtor is a firn1.
'rhis section, therefore. ;1ssumc) rhat ;ut adjudication order can
he n1ade
under !he Act
againsr 1hc firm in the firm·s name. [~67 G-l~]
J:'x ptirlt' /llc1i11 (1879)12 Ch. D. 5~2. rcrcrred to.
(iii) Jn order to support an adjudication again5t a firm ihcrl' n1ust be
proof thal c;1ch of the partners h;1~ committed some act Of insol\'cncy. If,
ho"·ever, a joint acr ol insoh·ency iS relied upon it must be shoy.·n to be
the aL"t of <111 rhe
parln~rs. 1\n or<lcr for adjudication can also be made
<1J!ains1 a firn1 if 1hcrc v.--;is an ac 1 of insolvency by an agent of 1he firm
"·hich W<tS !luch :is n1us1 ncccs\arily he in1ru1ed to lhC firm.
·rh~ cxpla.-
n:i!il1n ro s. 6 of the Acr docs nor by do\\·n !hat an act of insolvency of
•
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FIRM MUKAND LAL v. PURUSHOTAM (Ramaswami, J.)
863
the agent shall. be attributed to the principal but that it ma~ .. ~e treated asthc Act of the principal. [868 E, F]
·
rfhe on.Jer of the lower court, so far it adjudicated the registered firm
as insolvent. rnu~t be· set aside.
The property of which M made gift
was not a partnership property an<l
ther·~ was no collective act of insol·
vcncy allcgc<l on behalf of all the ·partners <;Jf the firm.
Re : lvlvhanuul Hasan1 & Co. 24 Born. l.R. 861 and Gopal Naidu v.
Mohan/al Kan'yafol, LL.R. Mad. 189. referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 1167 to
1169 of 1965.
Appeals by special leave from the fμdgment and order dated
November 1, 1961 of the Allahabad High Cnurt in Civil Revision
Nos. 310 to 312 of 1960.
A. K. Sen and J. P. Goyal, for the appelhmts
(in all the·
appeals).
B. C. Misra, M. V. Goswami and R. H. Dhebar, for re~j:lon
dcnts Nos. 1 and 2 (in C.As. Nos. 1167 and 116~ of 1965).
S. S. Shukla, for respondent No. 3 (in C.As. Nos. 1167 and
1168of1965) and respondent No. 2 (in C.A. No. 1169of1965).
B. C. Misra and R. Mahalingier, for respondent No. 1 (ii) to
(v) (in C.A. No. 1169 of 1965).
The Judgment of the Court was q.e}iyered by
'
Ramaswami, J. These appeals are brought, by special leave,
from the judgment of the Allahabad B:igh Court dated November
1, 1961 in three Civil Revision Applications nos. 310 ,o 312 of
1960.
AppeJlant no. 1 is a registered firm of which appellant no. 2.
Mukund Lal and respondent no. C/, Ram Surat Misra. are the only
two partners. The firm· carried on 'Arhat' (Commission Agency)
business.
Three petitions μnder the Provincial
Insolvency Act
(Act V of 1920), hereinafter called the 'Act', were made against
the firm and its two partners under s. 7 of the Act. Purushottah1
Singh, respondent no. 1 and Sat Narain Singh, respondent no. 2
filed the first petition (Petition no. 9 of 1958) on April 28, 1958.
The second petition was filed by Smt. Tara Devi, respondent no. 3
and Shyam Das, respondent no. 4 on May 30, 1958 which was
registered as Petition no. 19 of 1958.
The third petition was filed
by Jivenda Mal on January 20. 1959 which
was registered as
Petition no. 2 of 1959.
In petition no. 9 of 1958, a sum of
Rs. 15,760/- was claimed; in petition no. 19 of 1958, a sum of
Rs. 14,545/-was claimed and in petition no. 2 of 1959 a sum oi
Rs. 3,884/- was claimed but other creditors also filed their claims
to the extent of Rs. 96,000/-.
In all these petitions it was alleged
864
SUPREME COt:RT REPORTS
[ 1968] 2 S.C.R.
that the firm and its two partners ·Jiad committed acts of insolvency and therefore they should be declared insolvents. The firm
and its partners contested the pctitiiins and asserted that they had
already paid a sum of Rs. 3,50.000/- to other crcllitors and they
.were in a position to pay all the creditors and had not conunittcJ
any acts of insolvency. All the three insolvency petitions
wer~
consolidated together and were heard by the Insolvency Judge,
Varanasi whQ by his judgment dated August 8, 1959 adjudieatrd
the firm .and its two partners as insolvents.
Thereafter the firm
and its two partners filed three appeals i;nder s. 75 or the Act but
all these appeals were dismissed by the Additional District Judge,
Varanasi by his judgment dated February 28, 1960. Thereafter
the firm and its two partner> took the matter in revision to th,•
Allahabad High Court which partly allowed the revision applications and set aside the order of the lower courts adjudging Ram
Surat Misra. respohdent no. 7. one of the partners of the firm a;
insolvent.
The rest of the order declaring the firm and its other
partner, Mukand Lal as insolvent was co~finned.
The main question iO be considered in these appeals is whether
the deed of gift executed by Mukand Lal in favour of his soi;,
Veer Kumar on October 3 I, I 951 and registered on March 11.
I 958 could be treated as an Act of insolvency committed withi,,
three months of the presentation of the petition.
Secion 6 ( b) or the Act state' :
"6. A debtor commits an act of inso:vency in each
of the following cases, namely :-
( b) if, in India or ebewhere, he makes any transfer
of his property or of any part thereof with intent to
defeat or delay his creditors;"
Section 9( I) (c) states:
"9. (I) A creditor shall not be entitled to present
an insolve~cy petition against a debtor unlessB
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( c) the act of insolvency on which the petition is
G
grounded has occurre.d within three months before the
presentation of the petition :
Provided that where the said period of three months
referred to in clause ( c) expires on
a day when the
Court is closed. the insolvency petition may be presented
on the day on which the Court re-opens."
Section 122 of the Transfer of Property Act (Act 4 of 1882)
" to the following effect :
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FJRM MUKAND LAL "· PURUSHOTAM (Ranwswami, !.)
865
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"Gift is the transfer of certain existing moveable or
B
immoveable property made voluntarily and without consideration, by one person, .called the donor, to another,
called the donee, arid accepted by or on behalf of the
donee.
Such acceptance must be made during the life-time
of the donor and while he is still capable of giving.
If the donee dies before acceptance,
the gift is
void."
Section 123 of the Transfer of Property Act states :
"For the purpose of making a gift of immoveable
C
property, the transfer must be effected by a registered
instrument signed by or on behalf of the donor,
and
attested by at least two witnesses.
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For the purpose of making a gift of moveable property, the transfer may be effected either by a registered
instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way
as
goods sold may be delivered."
Section 47 of the. Indian Registration Act, 1908 (Act 16 of
1908) is to the following effect :
"A registered document shall operate from the time
from which it would have commenced to oper~te if no
registration thereof bad been required or made, and not
from the time of its registration."
Section 49 of the Indian Registration Act states as follows :
"No document required by section 17 or by any
provision of the Transfer o.f Property Act, 1882, to be
registered shall-
( a) affect any
immoveable prope1iy
comprised
therein, or
(b) confer any power to adopt, or
( c) be received as evidence of any transaction
affecting
such property or conferring
such. power.
unless it has been registered :
Provided .that an unregistered document affecting
immoveable property and required by this Act or the
Transfer of Property Act, 1882, to be registered may
be received as evidence of a contr~ct in a suit for specific
performance under Chapter II of the Specific Relief Act,
1877, or as evidence of part performance of a contract
for the purposes of section
53A of the Transfer of
Property Act. 1 882. or as evidence of any collateral
866
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SUPREMB COURT REPORTS
[1968] 2 S C.R
transaction not required to be effected
by registered
instrument."
It was contended on behalf of the appellants that under s. 4 7
of the Indian Registration Act a registered document operates
from the date of its executirn even though it may require registration and consequently the registration of the document should be
taken to. date back to the date of execution by a fiction of law.
It
was therefore submitted that the starting point of the three months'
period prescribed under s. 9(1 )(c) of the Act should be the dat~
of execution of the deed of gift and not the date of registration.
We are unable to accept this argument as correct.
Section 123
of the Transfer of Property Act states that for the purpose of
making a gift of immoveable property the transfer must be effected
by a registered instrument in the prescribed manner. Under th!s
section therefore a gift of immoveable property is not valid unle>'
it is effected by a registered instrument. It is true that under s. 47
of the Indian Registration Act once a document is registered the
effect begins to commence from the date of execution, but if the
document is not registered it can never have any legal effes;t as "
deed of gift.
Under s. 49 of the Indian Registration Act it is
provided that no document required by s. 17 or by any provision
of the Transfer of Property Act, 1882, to he registered shall affect
any immoveable property comprised therein unless it has
be~n
registered. The section necessarily implies that such a document
by reason of its execution alone cannot have the effect of transferring the property.
In the present case, therefore. the deed of
gift executed by Mukand Lal in favour of Veer Kumar dated
October 31, 1957 cannot be considered to be an act of in<c.;vency
unless a valid transfer of properly was made by that document
and such a valid transfer could be said to have been made onlv
when the document was registered on March 11, 1958. The question in the present case is nof what was the effect of the registration of the deed of gift, but when did the event take place which
effectively transferred the property.
We are not concerned wit!•
the point of time from which the document became operative but
with the point of time at which the deed of gift became legnlly
effective.
The contrary viewpoint for which the appellant con·
tends would ignore the cirrnmstance that if the re~istration of the
deed of gift was not effected within the period of three months the
creditor would be deprived of his remedy of relying upon the act
of transfer as constitutin~ an act of insolvency. Such an interpretation should be avotded as it would nullify the intention of the
statute.
On this question there has been divergence of opinion amon~
the various High Courts.
Tn Lakhmi Chand v. Kesha Ram ( 1 i
(I) I.LR. 16 Lah, 7)5.
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FIRM MUKAND LAL V, PURUSHOTAM (Ramaswami, !.)
867
it was held by the Full Bench of Lahore High .Court th11t .when a
petition was presented alleging that a debtor had committed an
act of insolvency by a regi,stered deed, the period of limitation
prescribed by s. 9 (1 )( c) of the Act ran from the date of the
registration of the deed and not .from the .date of the execution
thereof.
The same view was expressed by the Madras High Court
in Sarvathada Iswarayya v. Kuruba Subbanna('). In that case,
the execution of the sale deed waR relied upon as an act of insolvency by a petitioning creditor and it was held by Madhavan Nair
and Bardswell, JJ. that the three months' period prescribed by
s. 9 (1) ( c) of the Act must be calculated from the date of the
registration of the deed and not from the date of its execution.
The same view was also enunciated by the Allahabad High Court
in Dis'lrict Board, Bijnor v. Mohammad Abdul Salam(').
A contrary view has been taken by the Full Bench of the Rangoon High
Court in U On Maung v. Maung Shwe Hpaung( 8 ). It was held
that the period of three months referred to in s. 54, Provincial
Insolvency Act, began to run from the date of execution of the
transfer provided it had been properly registered within the spe~i
fied time..
But for the r~asons already expressed we hold that the
decisions in Lakhmi Chand v. Kesho Ram('), in Sarvathada
Iswaryya v. Kuruba
Subbanna.('). and
in' District
Board,
Bijnor v. Mohammad Abdul Salam('), correctly state the law on
the point .
It was next argued that no order of adjudication could be
made against a firm but it can only be made against the partners
individually. We are unable to accept this argument as correct.
It is true that according to the English law the act o[bankruptcy
must be a personal act and no act of bankruptcy could . ,
be committed by a firm as such, and no adjudication could
be made against a firm . in the firm's name.-(See Ex parte
Blain)('). But under s. 99 of the PresidenC)'-towns Insolvency
Act (Act III of 1909) an adjudication order may be made. against
a firm in the firm's· name and such an order operates as if it
were an order made against each of the persons who at the date
of the order was a partner in the firm.
There is, however, no
provision in the Act corresponding to s. 99 of the Presidencytowns Insolvency Act., But s.79(2)'(c) of the Act .provides for
rules to be made by 'the High. Court as ·to the procedure to be
followed when the . debtor is' a firm.
This · section
therefore
assumes that an adjudication order can be made under ihe Act
against the firm in the firm's name. Rules have been made under
this section by th<:l Allahabad. High Court'. Reference was made
H
on behalf of the respondents to R~le 26 which states :. ·
·
{!) I.L.R. SB Mad.166.
. (>) A.J.R. 1937 Rangoon 446.
.
(5) (1879) 12 Ch. D. 522-.
__ ._..
(2) I.)'.,.il, )947 Alt. 624.
(4) LL.Rd6 Lah.'735 .
868
SUPREME COURT REPORTS
[ 1968] 2 S.C.R.
"26. An adjudication order made against
a
firm
shall operate as if it were an adjudication order made
against each of the persons who at the date of the order
is a partner in that firm."
It is manifest that an order of a"djudication could
be
made
against the firm 1n the present case if the proper conditions were
satisfied.
We therefore reject the argument of the appellants
on this aspect of the case.
J, was further contended on behalf of the appellants that
there is no finding of any of the couns to the effect that the
firm commilted any act of insolvency.
The allegation of the
respondents
was
that
appellant no. 2 transferred to his son.
Veer Kumar his personal house property by way of a gift deed
dated October 31. 1957 and this was done by him with the intent
to defeat or delay his creditors.
It was pointed out that Ram
Surat Misra was adjudged nor to be insolvent by the High Court
on the ground that there WJs no allegation against him of any
act of insolvency.
It was therefore contended that the
firm
should not have been declared insolvent merely because of the
deed of gift executed by appellant no. 2, Mukand Lal.
In our
opinion, this argument is well-founded and must be accepted as
correct.
We think that in order to
support
an
adjudication
against a firm there must be proof that each of the partn.~rs has
committed some act
of insolvency.
If, however,
a
joint
act
of
insolvency
is
relied
upon
it
must
be
shown
to be the act of all the partners.
An order for adjudication can
also be made against a firm if there was an act of insolvency by
an agent of the firm which was such as must necessarily be imputed to the firm.
The Explanation to s. 6 of ·the Act says
"for the purpose of this section the act of the agent may be the
act of the principal".
The Explanation does not lay down that
an act of insolvency of the agent shall be attributed to the principal but that it may be treated as the act of the principal.
Section 2 (a) of the Indian Partnership Act (Act IX of 1932) defines 'an act of a firm' to mean "any act or omission by all the partners, or by any partner or agent of the firm which gives rise to
a right enforceable by or against the firm".
The effect of this
section read with the Explanation to s. 6 of the Act appears to
be that the question whether an act of insolvency of one or more
partners can be regarded as an act of all the partners is a question of fact to be determined on the facts and circumstances of
each particular case.
For instance, In Re Mohomed Hasham
& Co.(') one of the partners in a firm consisting of two parnters
departed from the usual place of business with intent to delay
and defeat the creditors of the firm.
It was held by the Bombay
(ll 24 Hom. LR. 86).
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FIRM MUKAND LAL v .. PURUSHOTAM (Ramaswami,' J.)
869
High Court that an adjudication order could not be made against
the firm in such a case unless the other partner had also departed
with like intent.
Similarly, in
Gopal
Naidu
v.
Mohan/al
Kanya/al ( 1 ) it was held by the Madras High Court that it is a
question of fact whether the aq of one partner in closing the
business of the firm and thus committing an act of insolvency so
far as he is conce1 ned was imputable to another partner so as to
entitle the creditors of the firm to get the other also adjudicated
an insolvent.
In· the circumstances of that particular case it was
held that the mere fact of closing the firm by one partner without more evidence to show that the other either expressly or
impliedly authorized the same was insufficient to lead to such imputation.
In the present case, the property of which Mukand
Lal made a gift to Veer Kumar was not partnership property
and the.re was no collective act of insolvency alleged on behalf of.
all the partn.ers of the firm.
In the circumstances of the present
case it cannot also be held that the act of insolvency committed
by Mukand Lal should be attributed to Ram Surat Misra.
The
High Court has, in fact, allowed the appeal of Ram Surat Misra
and set aside the order of the lower courts declaring him as insolvent.
We are consequently of opinion that the order of the
lower courts, so far as it adjudicates the registered firm as insolvent, should be set aside, but the rest of the order of the lower
courts declaring Mukand Lal as insolvent will stand.
Subject to this modification these appeals are dismissed. There
will be no order as to costs of this Court.
Y.P .
(I) J. L. R. 49 Mad. 189.
Appeals dismissed.
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