Q.Answer in one sentence only.
Who is called insolvent person?

Third Party Liability = ₹1,00,000. Liabilities owed to outsiders are the sum of trade creditors and bills payable.

Method

"Third party" (external) liabilities are all the debts a firm owes to people who are not partners. Here the two outside liabilities are Creditors and Bills Payable, so they are added together:

An insolvent person is a person (or partner) whose assets are insufficient to meet his liabilities and who is therefore legally incapable of paying his debts in full.

In accounting, the term matters most in a dissolution (Section 48). When a partner becomes insolvent, he cannot bring in cash to make good a debit balance on his capital account; that deficiency (his "capital deficiency") then has to be borne …