The Andhra Pradesh High Court has recently held that the mere non-mention of solemn verification in an affidavit, despite the presence of solemn affirmation, ipso facto does not warrant rejection of an application as such a defect is curable.

In view of this, the court set aside an order of the insolvency court dismissing an application seeking to set aside an allegedly fraudulent property transaction on the ground that the supporting affidavit was defective.

Instead of dismissing the application on this ground, the insolvency court could have returned it with a direction to cure the defect, the High Court observed, reiterating that “rules of procedure are made to further the cause of justice and not to prove a hindrance thereto.”

Under Section 12 of the Provincial Insolvency Act, 1920, an insolvency petition must be signed and verified in the manner prescribed by the Code of Civil Procedure, 1908, for signing and verifying plaints. Order VI Rule 15 of the CPC requires verification to specify which statements are based on personal knowledge and which are based on information received and believed to be true.

A Single Judge Bench of Justice Subba Reddy Satti allowed the civil revision petition and observed:

“In the case at hand, no doubt the affidavit does not contain solemn verification; however, it contains solemn affirmation by the deponent. Mere non-mentioning of solemn verification, ipso facto, does not warrant rejection of application. In fact, the insolvency Court could have returned the application with a direction to comply with the objections, if any. Had the insolvency Court returned the application before numbering by raising such an objection, the defect could have been cured.”

The dispute arose when the petitioner, a creditor, filed an insolvency petition under Section 9 of the Provincial Insolvency Act, 1920, seeking to have the debtor adjudged insolvent and to set aside registered sale deeds executed by the debtor and other parties in favour of other respondents. The insolvency court allowed the petition, adjudged the debtor insolvent and appointed an Official Receiver.

Following the appointment, the Official Receiver and the creditor jointly filed an application under Section 53 of the Act, seeking to set aside a registered property document executed in favour of another respondent on the ground that the transaction was fraudulent. They also sought a direction for the property concerned to vest in the Official Receiver.

The insolvency court dismissed the application on the ground that the supporting affidavit was defective. Although the Official Receiver, who had sworn the affidavit, stated in its opening paragraph that he “do hereby solemnly affirm and state as follows”, the verification portion read: “Solemnly affirmed and executed before me Advocate, Nellore.”

The court held that the affidavit was defective for want of the requisite solemn affirmation before the advocate.

Aggrieved by the dismissal, the creditor, who was the second applicant in the proceedings, approached the High Court under Article 227 of the Constitution. The creditor contended that the defect was curable and that the application should not have been dismissed on this procedural ground without an opportunity to rectify it.

Examining the affidavit, the High Court noted that although its opening paragraph contained a solemn affirmation, solemn verification by the deponent was missing. The Court considered whether this omission, by itself, justified dismissing the application.

Explaining the distinction between affirmation and verification, the Court observed:

“At this juncture, it is imperative to note the subtle yet fundamental distinction between 'affirmation' and 'verification'. While affirmation (or an oath) is the formal, solemn act of swearing before an authorised officer that the deponent is telling the truth, verification is the specific categorisation of the source of that truth. Solemn Affirmation attaches sanctity to the document as a whole, whereas verification dissects the contents to specify which paragraphs are true to the deponent's personal knowledge, which are based on official records, and which are based on information received and believed to be true.”

The Court further explained that proper verification is not an empty procedural formality, as it enables the court to assess the genuineness of the allegations and fixes responsibility on the deponent for the statements made in the affidavit.

Nevertheless, it found that the defect in the present case was curable. The insolvency court could have returned the application with a direction to comply with the necessary requirements, thereby allowing the defect to be rectified.

The Court held that procedural rules must advance the cause of justice. Curable defects should not defeat substantive rights or lead to automatic dismissal unless the law requires it.

It noted that the insolvency court had failed to exercise its jurisdiction in the proper perspective by dismissing the application on this ground.

Accordingly, the High Court allowed the revision petition, set aside the dismissal order and restored the application. It directed the insolvency court to allow the affidavit's verification defect to be rectified, if necessary, before deciding the application on merits.

Counsel for the Petitioner: Siva Prasad Reddy Venati