Andhra HC (Pre-Telangana)
Tummalacherla Srinivasa Rao vs Sri Krishna Tulasi Theatre, Pedana, ... on 28 November, 2012
Author: Samudrala Govindarajulu
Bench: Samudrala Govindarajulu
HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU SECOND APPEAL No.902 of 2012 28.11.2012 Tummalacherla Srinivasa Rao Sri Krishna Tulasi Theatre, Pedana, Krishna District and 10 others Counsel for the Appellant: Sri Yellabandi Ramatirtha and Sri B.Balamurali Krishna Counsel for Respondents: None appeared <Gist : >Head Note: ?Cases referred: AIR 1968 SUPREME COURT 1182 JUDGMENT:
This second appeal arises out of insolvency proceedings launched by the debtor - appellant against the first respondent which is a partnership firm called Sri Krishnatulasi Theatre, represented by its managing partner together with all partners. Both the Courts below dismissed insolvency petition filed by the debtor on various grounds including on the ground of non-maintainability. Insofar as maintainability of insolvency petition under the Provincial Insolvency Act, 1920 is concerned, the view taken by the lower Courts is in accordance with law.
The appellant's counsel placed reliance on "FIRM MUKUND LAL VEERKUMAR v. PURUSHOTTAM SINGH"1 on this aspect. The relevant adjudication by the Supreme Court on this point is reflected in the following paragraph.
"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 of 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, (1879) 12 Ch D 522). But under Section 99 of the Presidency-towns Insolvency Act (Act II 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 Section 99 of the Presidency-towns Insolvency Act. But Section 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 the Act against the firm in the firm's name. Rules have been made under this section by the Allahabad High Court. Reference was made on behalf of the respondents to Rule 26 which states. "26. An adjudication order made against a firm shall operate as if it were an adjudication order made against each of the person who at the date of the order is a partner in the firm".
It is manifest that an order of adjudication could be made against the firm in the present case if the proper conditions were satisfied. We therefore reject the argument of the appellants on this aspect of the case."
Even though an insolvency petition against a firm - debtor is maintainable under Section 99 of the Presidency-towns Insolvency Act, 1909, there is no provision akin to the said provision in the Provincial Insolvency Act, 1920. Section 79(2)(c) of the Act of 1920 provides for rules to be made by the High Court as to the procedure to be followed when the debtor is a firm. Alhabad High Court made relevant rules under the said provision making provision for adjudication of a firm - debtor, as insolvent. In the State of Andhra Pradesh, there are no similar rules framed by the High Court of Andhra Pradesh under Section 79(2)(c) of the Act of 1920. Therefore, an insolvency petition cannot be filed and entertained for the relief of adjudicating a firm - debtor as insolvent in the State of Andhra Pradesh. In that view of the matter, the above verdict of the Supreme Court has no application to the state of Andhra Pradesh where no rules under Section 79(2)(c) of the Provincial Insolvency Act, 1920 are made in this regard.
Therefore, this second appeal does not lie as there is no error in the orders passed by the Courts below.
In the result, the second appeal is dismissed.
____________________________ SAMUDRALA GOVINDARAJULU, J.
28th November 2012