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Debt

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Sec. 53 of Insolvency Act = Whether the Courts can order adjudicating the transferor as insolvent and ordering to administer schedule property by the official receiver and distribute the sale proceeds among the petitioners is sustainable?

 Whether the Courts can order adjudicating the transferor as insolvent and ordering to administer schedule property by the official receiver and distribute the sale proceeds among the petitioners is sustainable?         On Insolvency petition of the creditors/petitioners under Sections 7 to 9 of the Provincial Insolvency Act, 1920 (for short ‘the Act’) to adjudicate the transferor/debtor … Continue reading

Limitation Act: Sections 18, 19 and 20–Acknowledgment of debt–When saves limitation. Muslim Personal Law–Liability to discharge debts de- volves on heirs proportionate to their respective Shares in the estate of the deceased. = One Vellappa Rawther, deceased, had incurred debt by means of two promissory notes for Rs.25,000 and Rs.50,000. In the suits filed on the basis of the promissory notes, the Trial Court granted a decree against the estate of Vellappa Rawther in the hands of defendants 2 to 10. The High Court on appeal modified the decree reducing it to one fourth of the decreed sum and focussed the liability on defendant-Respondent No. 2 absolving others of the re- maining liability on the bar of limitation. Such view was taken as the facts established that the liability to dis- charge debts of Vellappa Rawther after his death was indi- vidually on his heirs proportionate to the extent of their share in the estate devolving on them, and since the debt had become time barred, acknowledgment of the same by de- fendant-respondent No. 2 as well as partial payment of the debt by him rendered him alone liable to meet liability to the extent of one fourth related to the share of the estate which as a Muslim heir he received from the deceased. Before this Court, it was claimed on behalf of the appellant that under sections 18 and 19 of the Limitation Act the acknowledgment and partial payment saved limitation against all and thus the entire debt could be recovered from defendant-respondent No. 2, he being in possession of the estate lying joint. Dismissing the appeal, this Court, HELD: (1) The debt of the deceased gets divided in shares by operation of Muslim Personal Law amongst the heirs proportionate to their shares in the estate. The theory of sanctity of the integrity of the 434 debt is apparently foreign in the case of a deceased muslim leaving debt and some estate both being divisible amongst his heirs. [247G] Mohd. Abdul Qadeer v. Azamatullah Khan and 8 Others, [1974] 1 Andhra Weekly Reporter 98; Vasantam Sambasiva Rao v. Sri Krishna Cement and Concrete Works, Tenali 1977 Andhra Law Times Reports at 528; N.K. Mohammad Sulaiman v.N.C. Mohammad Ismail and Others, [1966] 1 SCR 935 at 940, re- ferred to. (2) It would be right to treat it settled that muslim heirs are independent owners of their specific shares simul- taneously in the estate and debts of the deceased, their liability fixed under the personal law proportionate to the extent of their shares. [248H] Jafri Begum v. Amir Muhammad Khan, [1885] Vol. 7 ILR Allahabad series, referred to. (3) The heirs of a muslim are by themselves independent debtors; the debt having been split by operation of law. Inter se, they have no jural relationship as co-debtors or joint debtors so as to fall within the shadow of contrac- tors, partners, executors or mortgagees or in a class akin to them. They succeed to the estate as tenants-in-common in specific shares. [250D] (4) Even a signed written acknowledgment by the princi- pal or through his agent would bind the principal and not anyone else standing in jural relationship with the princi- pal in accordance with section 20(2) of the Limitation Act. The Muslim heirs inter-se have no such relationship. [250E] (5) If the debt is one and indivisible, payment by one will interrupt limitation against all the debtors unless they come within the exception laid down in section 20(2). And if the debt is susceptible of division and though seem- ingly one consists really of several distinct debts each one of which is payable by one of the obligors separately and not by the rest, section 20 keeps alive his part of the debt which has got to be discharged by the person who has made payment of interest. It cannot affect separate shares of the other debtors unless on the principal of agency, express or implied, the payment can be said to be a payment on their behalf also. [250H; 251A] Abheswari Dasya and Another v. Baburali Shaikh and Others, AIR 1937 Cal. 191, referred to. 435 (6) The property of the co-heirs supposedly in posses- sion of defendant-respondent No. 2 cannot be touched direct- ly in his hand unless the co-heirs being parties to the suit are held liable to pay their share of the debt; the debt being recoverable. [251F] =1991 AIR 720, 1990( 1 )Suppl.SCR 433, 1990( 4 )SCC 672, 1990( 2 )SCALE481 , 1991( 5 )JT 420

PETITIONER: P.N. VEETI NARAYANI Vs. RESPONDENT: PATHUMMA BEEVI AND ANOTHER DATE OF JUDGMENT13/09/1990 BENCH: PUNCHHI, M.M. BENCH: PUNCHHI, M.M. AHMADI, A.M. (J) CITATION: 1991 AIR 720 1990 SCR Supl. (1) 433 1990 SCC (4) 672 JT 1991 (5) 420 1990 SCALE (2)481 ACT: Limitation Act: Sections 18, 19 and 20–Acknowledgment of debt–When saves limitation. Muslim … Continue reading

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