Good Question (Insolvency Act)
pratik
(Querist) 03 July 2010
This query is : Resolved
Section 7 in The Provincial Insolvency Act, 1920 Which is as follws .
7. Petition and adjudication.- Subject to the conditions specified in this Act, if a debtor commits an act of insolvency, an insolvency petition may be presented either by a creditor or by the debtor, and the Court may on such petition make an order (hereinafter called an order of adjudication) adjudging him an insolvent. Explanation.-- The presentation of a petition by the debtor shall be deemed an act of insolvency within the meaning of this section, and on such petition the Court may make an order of adjudication.
Query : As per Section 7 of P.I. Act. A Joint Hindu Family consists of K, as
Karta, his two sons A and B and his grandson C, a minor, as co-parceners. K takes a loan
for running the business of the J.H.F. The business is being actively managed by K and B.
A is a party to the loan and C ratifies the loan. All of them jointly transfer joint property
of the J.H.F. with the intention to defeat and delay the creditors. D, a creditor, files an
insolvency petition against all of them. Can the court pass an ‘order of adjudication’
against all of them? Can an ‘order of adjudication be passed in the name of J.H.F.?
Raj Kumar Makkad
(Expert) 03 July 2010
In the given facts, Court can pass an order of adjudication against all the members of JHF as well as against JHF.
Y V Vishweshwar Rao
(Expert) 09 July 2010
As all the members are parties to the loan in individual capacity and also as members of HUF - I agree with the Opinion of Sri Raj Kumar Makkad !
