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Issues:
Insolvency proceedings under S.9(2) of the Presidency Towns Insolvency Act, 1909; Finality of a decree modified in appeal; Stay of dispossession and liability to pay mesne profits; Interpretation of S.9(2) conditions for issuing insolvency notice. Analysis: The appeal before the Madras High Court stemmed from insolvency proceedings initiated by the appellants under S.9(2) of the Presidency Towns Insolvency Act, 1909. The appellants sought to issue notice based on a decree from 1973, modified in appeal in 1983, for the payment of mesne profits amounting to Rs. 23,600. Despite an appeal and stay of dispossession, the liability to pay mesne profits remained. The respondent argued against issuing the insolvency notice citing an interim stay by the Supreme Court. The lower court dismissed the application under S.9(2) but allowed setting aside the insolvency notice under S.9(5). The appellants contended that the pendency of the appeal did not bar the issuance of notice under S.9(2) and that the liability for mesne profits persisted despite the stay of possession. The respondent, on the other hand, argued that the decree's finality was affected by the appeal and the stay granted by the Supreme Court. Upon careful consideration, the High Court found that the mere pendency of the appeal did not negate the finality of the decree, especially regarding the liability to pay mesne profits. The court rejected the argument that the respondent's public image would be tarnished if the insolvency notice was issued. The court held that the statutory provisions did not support such a consideration and allowed the appeal, granting costs to the appellants.
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