P L D 1973 Karachi 40 (PLP)

(d) that they have suspended payment of their debts and are refusing payment of debts and are pleading inability; (e) that they have concealed their assets with a view to defraud the creditors;". In order to appreciate whether these grounds are covered by section 9 it is convenient to reproduce it as under: "A debtor commits an act of insolvency in each of the following cases, namely:‑ (a) If, in Pakistan are elsewhere, hr, makes a transfer of all or substantially all his property to a third person for the benefit of his creditors generally ; (b) if, in Pakistan, or elsewhere, he makes a transfer of his property or of any patt thereof with intent to defeat or delay his creditors; (c) if, in Pakistan or elsewhere, he makes any transfer of his property or of any part thereof, which would under this or another enactment for the time being in force, be void as a fraudulent preference if he were adjudged an insolvent; (d) if, with intent to defeat or delay his creditors‑ (i) he departs or remains out of Pakistan, (ii) he departs from his dwelling house or usual place of busl ,ness or otherwise absents himself, (iii) he secludes himself so as to deprive his creditors of the means of communicating with him; (e) if any of this property has been sold or attached for a period of not less than twenty‑one days in execution of the decree of any Court for the payment of money; (f) if he petitions to be adjudged an insolvent; (g) if he gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts; (h) if he is imprisoned in execution of the decree of any Court for the payment of money. Explanation.‑For the purposes of this section, the act of an agent maybe the act of the principal, even though the agent have no specific authority to commit the act" Thus there are eight clauses with an explanation. These clauses are subject to certain conditions which must be satisfied before the case can be brought within the purview of these clauses, Some of the clauses are subdivided which are subject to the same condition which is attached to a particular clause. The relevant clauses to be considered in the present case are clauses (a), (b), (c), (d) and (g). To point out the conditions, clause (a) is applicable if the transfer of property is made to a third person for the benefit of the creditors generally. Clauses (b), (c) and (d) are attracted if the intention is to defeat or delay the creditors while the condition attached to clause (g) is that a notice for suspension of debt is given by the debtor. Turning to the grounds stated in the petition, it is clear that the conditions laid down by the various clauses are not fulfilled in order to sustain the charge against the respondents that they had committed the acts of insolvency. Ground (a) is sought to be covered by clauses (a), (b) and (c) but there is no allegation that the transfer of the business was effected for the benefit of the creditors generally; or as a fraudulent preference ; or with intent to defeat or delay the creditors. Mere transfer without the necessary intention does not attract any of the clauses. Grounds (b) and (c) are sought to be covered by clause (d) but similarly there is no allegation that the respon dents had secluded themselves or departed from the place of business or otherwise absented themselves with an intent to defeat or delay the creditors. The intention is a condition precedent to bring the act or acts within the clause. Ground (d) is sought to be covered by clause (g) but in order to apply the clause it is necessary that respondents should have given notice to any of the creditors for the suspension of payment. No such notice has been pleaded. Mere suspension of payment without notice is not enough to attract the clause. Ground (e) is not covered by any of the clauses and this has also been contended by the learned counsel for the petitioner. The view that I have taken is fully borne out by the autho rities which were sought in aid by the learned counsel for the Dealing with the authorities the first authority is in case of Firm Gobindram Kedarnath v. Finn Permanand Diwan chand (A I R 1934 Sind 177). It was laid down that the Court is not competent to adjudicate a party insolvent for an act of insolvency not specified as in section 10 and so also it is not permissible for a creditor to make in his petition allegations which are not acts of insolvency within the meaning of section 9 and then try to prove by evidence that as a matter of fact an act of insolvency within the meaning of section 9 has been committed. In that case the application was filed stating the ground as in the present case, inasmuch as it was not stated that the act was committed with a view to defeat the creditors and subsequently an amendment application was made for the addition of this expression and it was rejected on the ground that the amendment could not be allowed as section 12 (c) required the occurrence of the act of insolvency within 3 months prior to the date of presentation of the petition and the amendment would be beyond that period. It was, in this connection, observed, that it was a material omission in the previous application made under section

12. So it was stated that the Court was not competent to adjudicate a party insolvent for an act of insolvent not specified as section

9. The second case of A. M. M. Murugappa Chettyar v. A. C. Gailaiara and others (A I R 1934 Rang. 87), is also to the same effect and the amend ment was disallowed. The third authority is in the case of Wasanji Moolji and others v. Moolji Ranchhod Ved and others (A I R 1926 Bom. 405) and it was held that if an act of insolvency as defined in section 9 is not set out in the petition, then the petition is incompetent. It was further observed that the debtor may suspend payment but if he does not give notice to his creditors then that is not an act of insolvency. Again the man may declare his inability to meet his creditors but unless he declares such inability to one of his creditors, that is not a notice that he has suspended or is about to suspend payment of his debts. The fourth authority is in the case of Bholumal Variomal and others v. Soomar Khan Allahrakhyo Khan (A I R 1928 Sind 177). It was held that it is clear from section 6, clause (g) that it is the suspension of payment that affords a c use of action and provides the starting point from its limitation for presenting the petition for adjudicating a person insolvent, is to be counted. In the case of Clough v. Samuel and others (1905 A C 422), a stock broker being hopelessly, insolvent, told his stock exchange creditors that he would have a difficulty in paying them at the approaching settlement and suggested that they should close their accounts with him which they did and it was held by majority that the stock broker had no intention in fact to give his credi tors notice that he was about to suspend payment of his dues, and that there was in fact no such notice given within the mean ing of Bankruptcy Act, 1983. Thus this observation also reveals that there must be a notice for the suspension al' payment to bring the ground within section 9 of Insolvency Act. Mere inability to express cannot be treated to be an act of insolvency. Apart from what has been stated above the petition is vague' and no particulars as regards the dates and other allegations indicated in the application are given and, therefore, it is difficult for tire respondents to meet them. So the application suffers from serious infirmities and cannot be entertained as it stands. Although one of the courses is to direct the applicant to amend the petition as was ruled in the case of Krishnadas Rao v. Charulata; Pall and others (A I R 1932 Cal. 290), but as the grounds stated in the application are not covered by section this course cannot be adopted. In the result I dismiss the application with costs. K. B. A. Petition dismissed.