Insolvency adjudication cannot rest on decree default alone where inability to pay other debts is not proved.

Insolvency adjudication could not rest merely on non-payment of a decree debt where satisfactory proof of inability to pay other liabilities was lacking; mere default on the decree was insufficient. The later tender of the balance decretal amount, together with the substantial security already furnished, justified setting aside the adjudication, as the remaining dues and agreed costs could be adjusted from the security. The court therefore quashed the insolvency adjudication and allowed the creditor to recover the amount due from the security, with the balance returned to the debtor.

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Issues: (i) Whether insolvency proceedings could be sustained merely on non-payment of a decree debt in the absence of satisfactory proof of inability to pay other debts. (ii) Whether the subsequent tender of the balance decretal amount, together with the facts and security on record, justified setting aside the adjudication.

Issue (i): Whether insolvency proceedings could be sustained merely on non-payment of a decree debt in the absence of satisfactory proof of inability to pay other debts.

Analysis: The material on record did not satisfactorily establish that the alleged insolvent was unable to discharge his liabilities. The proceedings had effectively been founded on failure to pay the decree debt owed to the petitioning creditor, while the existence of other debts was not proved to the requisite standard. Mere non-payment of a decree, by itself, was insufficient to justify an adjudication in insolvency.

Conclusion: The insolvency adjudication was not sustainable on the footing adopted by the creditor.

Issue (ii): Whether the subsequent tender of the balance decretal amount, together with the facts and security on record, justified setting aside the adjudication.

Analysis: The balance due to the creditor was tendered after the time fixed, but the Court found no justification for rejecting the tender or for continuing the insolvency proceedings after the debt had substantially been satisfied. The record also showed that the appellant had furnished substantial security, and the remaining amount due, together with agreed costs, could be appropriately adjusted from the security and returned balance.

Conclusion: The adjudication was set aside and the creditor was permitted to realise the amount due from the security.

Final Conclusion: The appeal succeeded, the insolvency adjudication was quashed, and the monetary adjustments were directed to be worked out from the security with the residue returned to the appellant.

Ratio Decidendi: Insolvency adjudication cannot rest solely on non-payment of a decree debt unless there is satisfactory proof of inability to pay liabilities, and a duly tendered or otherwise secured balance may warrant setting aside the adjudication.

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