TION Civil Appeal No 207 of 1955
Appeal by special leave from the judgment and order dated the 6th December 1950 of the Madras High Court in CMA No 332 of 1945 arising out of the  judgment and order dated the 17th January 1945 of the Subordinate Judge Devakottai in E P No 90 of 1944 in 0
section No 14 of 1926
M section K Iyengar for the appellants
A V Viswanatha Sastri and T B V Sastri for respondent No 1 1959
August 28
The judgment of section K Das and A K Sarkar JJ was delivered by Sarkar J Subba Rao J delivered a separate judgment
SARKAR J
This appeal arises out of an application for execution of a decree for money and the only question is whether the application was made within the time prescribed by the Limitation Act
619 The decree was passed in favour of one Venkatachalam Chettiar on May 91935 against the appellants and certain other persons
On February 3 1936 Venkatachalam Chettiar transferred the decree to his mother Meenakshi Achi by an assignment in writing never having tried to execute it himself
Soon thereafter namely on March 26 1936 a creditor of Venkatachalam Chettiar presented a petition under the Provincial Insolvency Act hereinafter referred to as the Act for adjudicating him an insolvent on the ground that the transfer of the decree to Meenakshi Achi was a fraudulent preference and as such an act of insolvency
This petition remained pending for a considerable time and ultimately on January 7 1939 an order was made on it adjudicating Venkatachalam Chettiar an insolvent
By that order respondent No 1 the Official Receiver of Ramanathapuram was appointed the receiver in insolvency and the insolvent s estate vested in him
This order was based on the finding that the transfer of the decree by Venkata chalam Chettiar to Meenakshi Achi was a fraudulent preference and an act of insolvency
On January 26 1942 the receiver made an application in the insolvency proceedings for an order annulling the transfer of the decree by the insolvent to Meenakshi Achi and on this application an order was made on April 9 1943 under section 54 of the Act annulling that transfer
In the meantime Meenakshi Achi had made two applications for execution of the decree as the assignee of it and a reference to them is necessary
The first of these applications was made on December 14 1936 for an order recognising her as the assignee of the decree and for its execution against some of the judgment debtors
This application was disposed of by an order made on September 27 1937 recognising her right to execute the decree as the assignee and directing a certain compromise made presumably with the judgment debtors concerned to be recorded
The terms of this compromise are not relevant for the purpose of the appeal
Thereafter on August 2 1940 Meenakshi Achi as the assignee of the decree made another application for its execution and this 620 application was disposed of by an order made on September 30 1940 dismissing it for default of prosecution
It will be remembered that it was after these applications and the orders thereon had been made that the order annulling the assignment of the decree to Meenakshi Achi was passed
After the order annulling the transfer of the decree to Meenakshi Achi had been made the receiver considering himself then entitled to the decree made an application for its execution on September 27 1943
It is this application which has given rise to the present appeal
The executing court dismissed the application as having been made beyond the time prescribed by the Limitation Act
On appeal the High Court at Madras set aside the order of the executing court and held that the application was within time
Some of the judgment debtors have now come up in appeal to this Court
The appeal is contested by the receiver the respondent No 1
The other respondents among whom are the remaining judgment debtors or their successors in interest have not appeared
Applications for execution like the present one are governed by article 182 of the Limitation Act
That article provides a period of three years within which the application must be made
The article prescribes different points of time for different cases from which the period is to commence running
The first point of time so prescribed is the date of the decree
The fifth point of time prescribed is expressed in these words Where the application next hereinafter mentioned has been made the date of the final order passed on an application made in accordance with law to the proper court for execution 
The question for determination is whether the fifth point of time applies to the receiver s application for execution
If it does not the application must be held to have been made out of time while if it does the application would not be barred by limitation
The receiver contends that the two applications by Meenakshi Achi were  applications made in accordance with law to the proper court for execution 621 within the meaning of the article and his application was within time as it had been made within three years of the date on which the final order on Meenakshi Achi s last application was made
It is said on behalf of the appellants that in view of the orders in the insolvency proceedings it must be held that she was not entitled to the decree on any of the dates on which she applied for its execution and that her applications were therefore incompetent and not in accordance with law
The appellants put their contention in several ways
It is first said that the order annulling the assignment of the decree to Meenakshi Achi related back to the date of the assignment with the result that it has to be deemed as if she had never been entitled to the decree and that therefore the applications for execution by her were not competent and hence were not in accordance with law
We think this contention is wholly unfounded
We will assume for the purpose of the present case that when an order is made tinder section 54 of the Act annulling a transfer the transfer stands annulled as from the date it was made
But even so the transfer stands till it is annulled and therefore till then the transferee hag all the rights in the property transferred
So long as the transferee had such rights he was competent to exercise them and such exercise would be legal and fully in accordance with law
The fact if it be so that the transfer on annulment becomes void as from the date of the transfer cannot turn the exercise of a right under the transfer made prior to the annulment and which was legal when made illegal
Meenakshi Achi had hence full legal competence to execute the decree till the transfer of it to her was annulled
Her two applications for execution of the decree were therefore fully in accordance with law when they had been made and that is all that article 182 requires
Next it is said that the provisions of sub sections
2 and 7 of section 28 of the Act make Meenakshi Achi s two applications for execution incompetent in law
These provisions have now to be considered
Sub section 2 79 622 says that upon the making of an order of adjudication the whole of the property of the insolvent shall vest in the receiver and sub section
7 says that an order of adjudication shall relate back to and take effect from the date of the presentation of the petition on which it is made
It is said that under these provisions the assets of the insolvent in this case including the decree under execution became vested in the receiver on March 26 1936 when the petition for adjudicating him an insolvent had been presented and consequently the two applications for execution by Meenakshi Achi which had been made after that date were incompetent and not in accordance with law
It seems to us that this contention also is fallacious
These sub sections cannot have the effect of vesting the decree in the receiver till its transfer to Meenakshi Achi had been annulled
Till then it was not a part of the insolvent s estate
The annulment as we have earlier pointed out was made under section 54 of the Act
That section provides that certain transfers of property by the insolvent would be deemed fraudulent and void as against the receiver in insolvency and shall be annulled by court
It is obvious that a transfer liable to be annulled under this section remains a perfectly valid transfer till it is annulled
If it had become void automatically on an order for adjudication being made there would be no need to provide for its annulment by court
It would follow that Meenakshi Achi was legally possessed of the decree and competent to apply for its execution till the transfer of the decree to her was annulled under section 54
It is then said that though it may generally be that a transfer liable to be annulled under section 54 remains valid till it is annulled that is not so where the transfer is the act of insolvency upon which the order of adjudication is founded for in such a case the order itself annuls the transfer
So it is said that as the order of adjudication in this case was founded upon the transfer of the decree to Meenakshi Achi that transfer became annulled on the order being made on January 7 1939 and the second application for execution by Meenakshi Achi was incompetent It is 623 true that if this in the correct view then the receiver s application for execution must be held to have been made beyond the time allowed for it had been made more than three years after the final order on the first application for execution by Meenakshi which is the only order on which the receiver can on this basis rely for resorting to the fifth point of time fixed by article 182
Now this argument is based solely on the decision of the Judicial Committee in Mahomed Siddique Yousuf vs Official Assignee of Calcutta1 which it is said held that where a transfer is the act of insolvency on which the order of adjudication is founded that order itself has the effect of annulling the transfer
We think this case has been misunderstood
We find nothing in it to lead to the view that an order of adjudication founded on an act of insolvency constituted by a transfer of property amounting to a fraudulent preference itself and without more annuls that transfer
That was a case decided under the Presidency towns Insolvency Act
In that case one of the acts of insolvency on which the order of adjudication had been founded was a transfer by the insolvent of a certain decree in his favour to the appellant which was held to have been a fraudulent preference
The transferee was not a party to the order of adjudication
The official assignee that is the receiver in insolvency applied to have that transfer annulled
It was contended on behalf of the official assignee before the judge in insolvency in the High Court that the order of adjudication holding the transfer to be a fraudulent preference was conclusive and binding on the transferee though he was not a party to the insolvency petition
It was said that had been held in Ex parte Learoyd2 which turned on the English Bankruptcy Act 1869 the terms of which were similar to the relevant provisions in the Presidency towns Insolvency Act
The learned judge felt some difficulty in view of a decision of the Madras High Court to which it is unnecessary to refer whether the principle of the 1 1943 LR 70 IA 93
2 624 English decision applied to a case under the Presidency towns Insolvency Act
He therefore went into the facts and came to the conclusion that the transfer amounted to a fraudulent preference and thereupon made an order annulling it
On appeal the appellate Judges of the High Court  expressed some doubt whether the intent to prefer was in fact proved but they were both of opinion following Ex parte Learoyd 1 that the order of adjudication was conclu sive and could not be disputed
 They hold that this was so though the transferee was not a party to the order of adjudication
In that view of the matter the appellate Judges felt that there was a decision binding on the transferee that the transfer was void as a fraudulent preference and they thereupon annulled the transfer as a matter of course
The judgments in the High Court are reported in The transferee who was not a party to the insolvency petition then asked for an extension of time to prefer an appeal from the order of adjudication but this was refused
Then the matter was taken up to the Judicial Committee in further appeal
The Judicial Committee held that the appellate Judges of the High Court were right in their view that the principle of Ex parts Learoyd 1 applied to cases under the Presidency towns Insolvency Act but they thought that in the circumstances of the case the order of the appellate judges refusing to extend time for the transferee to appeal from the order of adjudication was not justified and set it aside and  extended the time to appeal
In order however to make the order in the contemplated appeal should it succeed effective they also set aside the order annulling the transfer though in their view it was plainly right 
This would appear from their observations at p 99 of the report   It is plain that an appeal against the adjudication order would be useless while the orders stand in this independent proceeding declaring the transfer void because of the adjudication order itself
On the other hand the decision of the High Court avoiding the transfer is plainly right while the adjudication 1 625 order stands and the appellant as a condition of the extension of time must pay as he has offered to do the costs thrown away
 And at p 100 they said The order is without prejudice to the right of the official assignee if he is so advised to make a further application to have the transfer declared void
 It is therefore abundantly clear that all that the Judicial Committee held in Mahomed Siddique Yousuf s case 1 was that in a case under the Presidency towns Insolvency Act when the act of insolvency upon which an order of adjudication is founded is a transfer amounting to a fraudulent preference the transferee cannot so long as the order of adjudication stands question that finding namely that the transfer was a fraudulent preference and that therefore in an application by the official assignee to have that transfer annulled on the ground that it was a fraudulent preference the order of adjudication is conclusive proof that the transfer was by way of a fraudulent preference and it was not open to the transferee to lead evidence to prove that the transfer was not a fraudulent preference
In such a case therefore the order of annulment had to be made as a matter of course on proof of the order of adjudication
The Judicial Committee did not hold that in such a case the order of adjudication itself annulled the transfer and no separate order of annulment was required for the purpose
In fact it is obvious that they thought that a separate order annulling the transfer would be necessary even in such a case for otherwise they would not have stated that  the decision of the High Court avoiding the transfer is plainly right  nor while setting aside the order annulling the transfer reserved the right of the official assignee should the occasion arise to make a further application to have the transfer declared void
The case therefore does not support the proposition for which it has been cited
On the contrary it clearly proceeds on the basis that even where the order of adjudication is based on an act of insolvency constituted by a 1 1943 LR 70 IA 93
626 transfer of property found to be a fraudulent preference the transfer stands till it is set aside
In our view this is the correct position and nothing to the contrary has been brought to our notice
An argument had been raised at the bar that under the Provincial Insolvency Act an order of adjudication has not that binding force which Mahomed Siddique Yousuf s case 1 held it had under the Presidency towns Insolvency Act
It was said that this was so because the terms of the two Acts were dissimilar
We do not think it necessary to express any opinion on this question
We have discussed Mahomed Siddique Yousuf s case 1 only to show that it does not support the proposition for which it was cited
It is un necessary for us to say whether it will govern a case Under the Provincial Insolvency Act or what the effect of  the dissimilarity pointed out in the terms of the two Acts is
That question is not before us
There remains one other point to deal with
It is said that the official receiver was not entitled to take advantage of the applications for execution made by Meenakshi Achi as he had not been claiming under her but had actually claimed against her
This contention is equally unfounded
Article 182 does not say that no advantage of a previous application can be taken for the purposes of saving the bar of limita tion unless it had been made by a person under whom the applicant in a later application which is said to be barred by limitation claimed
All that the article contemplates is an application for execution of a decree made within three years of the final order on a previous application made in accordance with law for the execution of the same decree
That being so we must reject this contention of the appellants also
In view of what we have already said it becomes unnecessary to deal with the other points raised at the bar
In the result we think that the appeal should be dismissed and we order accordingly
The appellant must pay the costs of this appeal
1 1943 LR 70 IA 93
627 SUBBA RAO J
This appeal raises a question of limitation
There is no dispute about the facts
On May 9 1935 one Venkatachalam Chettiar obtained a compromise decree against the appellants and respondents 2 3 and 4 and predecessors in interest of respondents 5 and 6 in A section No 226 of 1930 on the file of the High Court of Madras
Under the decree the defendants were directed to pay the plaintiffs therein a sum of Rs 1101014 0 together with interest at 3 per cent
per annum in certain instalments the last of the instalments being payable on May 30 1942
The decree also provided that in the event of a default in payment of any one of the instalments the entire decree amount would become payable
On February 27 1937 one Visvanathan Chettiar obtained a decree against the said Venkataclialam Chettiar in 0
section No 22 of 1936 on the file of the Court of Subordinate Judge Devakottai for a sum of Rs 33000
The suit ending in the above decree was filed on January 29 1936
On February 3 1936 Venkatachalam Chettiar executed a deed of assignment transferring the decree obtained by him in C section No 14 of 1926 to his mother Meenakshi Achi for consideration
On March 26 1936 Visvanathan Chettiar filed 1
P No 10 of 1936 in the Court of Subordinate Judge Devakottai for adjudicating Venkata chalam Chettiar an insolvent on the ground that the transfer of the decree in favour of Meenakshi Achi was an act of insolvency
On December 14 1936 the assignee Meenakshi Achi filed EP No 37 of 1937 for recognition of the assignment in her favour and for execution of the decree
The judgment debtors did not object either to the recognition of the assignment of the decree or the execution thereof The said Visvanatban Chettiar intervened in the execution petition and applied in EA No 817 of 1937 for stay of execution of the decree on the ground that he had filed an insolvency petition against the decree holder and also on the ground that the said assignment was nominal
The learned Subordinate Judge disallowed the objection of the creditor recognised the assignment and permitted the assignee decree holder to proceed with the execution of the decree
628 On September 27 1937 a settlement was entered into between the assignee decree holder and the judgment debtors and the said execution petition was closed
On January 7 1939 Venkatachalam Chettiar was adjudicated insolvent on the ground that the assignment of the said decree by him in favour of his mother Meenakshi Achi was an act of insolvency whereupon his properties vested in the first respondent the Official Receiver Ramanathapuram at Madurai
On August 2 1940 the assignee decree holder filed another execution petition EP No 243 of 1940 and it was struck off on September 30 1940
On January 26 1942 the Official Receiver filed IA No 20 of 1942 in 1
P No 10 of 1936 in the Court of the Subordinate Judge Devakottai for setting aside the assignment and by order dated April 9 1943 the assignment was set aside by the Court on the ground of fraudulent preference within the meaning of section 54 of the  hereinafter called the Act
On September 27 1943 the Official Receiver filed a fresh execution petition EP No 90 of 1944 for executing the decree
It was alleged by the appellants and the respondents 2 to 6 inter alia that the said execution petition was barred by limitation on the ground that the two earlier execution petitions were not in accordance with law within the meaning of article 182 cl 5 of the Limitation Act
The Official Receiver contended that they were in accordance with law and therefore the present execution petition was in time
He further pleaded that the present execution petition was also saved from the bar of limitation by the payments made by the judgment debtors to Meenakshi Achi and that in any event the decree in respect of the last three instalments was not barred by limitation
The learned Subordinate Judge rejected the contentions of the Official Receiver and held that the execution petition was barred by limitation
The Official Receiver preferred an appeal against the said order of the Subordinate Judge to the High Court of Madras
Govinda Menon and Basheer Ahmed Sayeed JJ of the said High Court came to the conclusion that the earlier execution petitions were in accordance with 629 law and therefore the present execution petition was within time
They also expressed the view that the payments made by the judgment debtors to Meenakshi Achi were valid payments and therefore they also saved the bar of limitation
In any view they found that the last two instalments were not barred by limitation
On their findings the learned judges of the High Court set aside the order of the learned Subordinate Judge and remanded the execution petition to the Court of the Subordinate Judge Devakottai for taking steps in furtherance of execution
The present appeal to this Court was filed against the said order of remand
Learned Counsel for the appellants contended that the execution petitions EP No 37 of 1937 and EP No 243 of 1940 were not in accordance with law for the following reasons 1 The order dated April 9 1943 annulling the assignment of the decree by Venkatachalam Chettiar in favour of his mother Meenakshi Achi related back to the date of the transfer ie February 3 1936 and therefore EP No 37 of 1937 which was filed on December 14 1936 and E P No 243 of 1940 which was filed on August 2 1940 were ineffective to save the bar of limitation as on the dates they were filed Meenakshi Achi had no title in the decree 2 the order of adjudication dated January 7 1939 was based on the finding that the said assignment of the decree was an act of fraudulent preference and that the order related back to the date of the filing of I P No 10 of 1936 on March 26 1936 and therefore the two execution petitions filed thereafter were filed by a person without title with the result that the said two petitions were not in accordance with law 3 assuming that the said two execution petitions were in accordance with law the Official Receiver neither claims under nor represents the assignee decree holder and therefore he has no locus standi to file the present execution petition 4 payments made by the judgment debtors to Meenakshi Achi who had no title in the decree could not save the bar of limitation and 5 as Meenakshi Achi in her execution petitions by exercising her option claimed the entire decree amount the Official Receiver 80 630 cannot now claim that the last two instalments are within time
At the outset it may be stated that it would be sufficient if we consider the objections of the appellants in regard to E P No 243 of 1940 for if that was not in accordance with law the present execution petition would be barred by limitation
The validity of E P No 37 of 1937 was also questioned on the same grounds of attack taken against the later execution petition
The relevant part of the Limitation Act is article 182 and it reads Description of Period of Time from which period application Limitation begins to run For the execution Three years or 5
where the applic of a decree or where a certified tion next hereinafter order of any copy of the decree mentioned has been m Civil Court not or order has been ade the date of the provided for by registered Six final order passed on article 183 or Years
an application made in by section 48 of accordance with law to the code of Civil the proper Court for Under this article the latest execution petition should have been filed within three years from the date of the final order passed on an application made in accordance with law to the proper Court of execution
Taking first the second contention of the learned Counsel for the appellants the question may be posed thus Whether the execution petition EP No 243 of 1940 filed on August 2 1940 by Meenakshi Achi after Venkatachalam Chettiar was adjudicated insolvent on January 7 1939 was one in accordance with law If the order of adjudication of Venkatachalam Chettiar on the ground that the assignment of the decree made by him in favour of Meenakshi Achi was an act of insolvency ex proprio vigore annul the transfer in her favour the execution petition filed by her after the said order of adjudication would not be one filed in accordance with law
On the other hand if the assignment of the decree continued to be good till it was annulled on an application filed by the Official Receiver which was done in 631 the present case on April 9 1943 the execution petition subject to another argument that I would consider at a later stage would be one filed in accordance with law
What then is the legal effect of such an order of adjudication  The question in the main falls to be decided on a true construction of the relevant provisions of the Act
Section 6 of the Act defines the act of insolvency it enumerates eight acts of insolvency and one of them is a transfer made by a debtor which would be void as a fraudulent preference if he were adjudicated insolvent
Section 7 enables a creditor or a deter to present an insolvency petition for adjudicating the debtor an insolvent
Section 9 lays down the conditions on which a debtor may petition
Section 13 prescribes the particulars a creditor has to give in his petition and one of the particulars to be given is the act of insolvency committed by the debtor
When an insolvency petition is admitted section 19 provides that notice should be given to creditors in such manner as may be prescribed and when the debtor is not the petitioner notice of the order admitting the petition should be served on the debtor
On the date fixed for hearing the Court should require proof of the matters mentioned under section 24 of the Act it enables the Court to examine the debtor and the creditors and take the evidence adduced by them
After making the necessary enquiry the Court may dismiss the petition or make an order of adjudication
On the making of the said order of adjudication the whole property of the insolvent would vest in the Court or in the Receiver appointed under the Act and the said property becomes divisible among the creditors
Under sub section 7 of section 28 the order of adjudication shall relate back to and take effect from the date of the presentation of the petition
Under section 30 notice of an order of adjudication stating the name address and description of the insolvent the date of adjudication the period within which the debtor should apply for his discharge and the Court by which the adjudication is made should be published in the Official Gazette and in such manner as may be prescribed
It will be seen from the aforesaid provisions that till an order of adjudication is made the 632 person to whom the insolvent transferred his property does not come into the picture at all
The purchaser is neither a party to the proceedings nor any notice is given to him
It would therefore be contrary to all principles of natural justice to hold that the finding arrived at in regard to an assignment of a property by the insolvent in favour of a third party behind his back is binding on him
If the legislature intended that the order should have that effect it would have provided for personal or at any rate public notice to the purchasers or would have given in express terms such a binding effect and the fact that it did not do so is a clear indication of the legislative intention that an incidental finding was not intended to have such a far reaching effect
On the other hand the Act makes ample provision for setting aside such transfers
Sections 53 and 54 of the Act enable the Official Receiver to have voluntary transfers made within two years of the insolvency petition and that made in fraudulent preference of one creditor over another within three months from the date of the petition annulled by the Court
If the legislature intended to exclude a transfer constituting an act of insolvency from the operation of these provisions it would have introduced a proviso to that effect
Therefore unless such a transfer is duly annulled in the manner prescribed the transfer would  be valid
That this is the intention of the legislature is also made clear by the other provisions of the Act vis avis transfers
The Act provides for three stages 1 Transfers made before the presentation of the insolvency petition 2 transfers made after the presentation of the petition and before the order of adjudication and 3 transfers made after adjudication
A transfer made after adjudication is not binding on the Receiver
A transfer by an insolvent after the filing of the petition is also not binding on the Receiver subject to a protection clause
A purchase in good faith under a sale in execution section 513 and a transfer inter vivos in good faith for valuable consideration 633 A transfer before the filing of the petition is binding on the Receiver unless it is annulled under sections 53 54 or 54 A of the Act
The scheme of the Act in regard to transfers clearly demonstrates that transfers before the filing of the petition are good unless they are annulled in the manner prescribed in the Act and even the doctrine of relating back of the order of adjudication does not reach them as they fall on the other side of the line
If it was the intention of the legislature that the said order by its own force should declare the transaction void it would have fixed the date of the transfer as the datum line instead of the date of the filing of the petition
It appears to me that this was designedly done to give an opportunity to the party affected to defend his title when the Official Receiver filed an application to annul the transfer
Sections 53 54 and 28 must be reconciled and they can be reconciled without doing violence to the language of the said sections if the order of adjudication is conclusive only in regard to the status of the insolvent it declares and the transfer though it formed the basis of the adjudication so far as the transferee is concerned continues to be good till set aside
Strong reliance is placed upon the judgment of the Judicial Committee in Mohamed Siddique Yousuf vs Official Assignee of Calcutta 1 in support of the contention that the finding that the transfer of the decree in favour of Meenakshi Achi was an act of insolvency was binding on the transferee though she was not a party to the adjudication proceedings
That decision turned upon the relevant provisions of the Presidency towns Insolvency Act 1909 and the corresponding provisions of the Bankruptcy Act of 1869
That decision cannot apply to a situation created under the  unless the provisions of said Act are pari materia with those of the Presidencytowns Insolvency Act and the Bankruptcy Act
A comparative study of the three sets of provisions by placing them in juxtaposition will facilitate a better understanding of the problem
1 1943 LR 7o IA 93
634 Bankruptcy Act 1869 section 10 A copy of an order of the Court adjudging the debtor to be bankrupt shall be published in the London Gazette and be advertised locally in such manner if any as may beprescribed and the date of such order shall be the date of the adjudication for the purposes of this Act and the production of a copy of the Gazette containing such order as aforesaid shall be conclusive evidence in all legal proceedings of the debtor having been duly adjudged a bank rupt and of the date of the adjudication
section 11 The bankruptcy of a debtor shall be deemed to have relation back to and to conimence at the time of the act of bankruptcy being completed on which the order is made adjudging him to be bankrupt  or if the bankrupt is proved to have committed more acts of bankruptcy than one to have relation back and to commence at the time of the first of the acts of bankruptcy that may be proved to have been committed by the bankrupt within twelve months next preceding the order of adjudication  but the bankrcptcy shall not relate to any prior act of bankruptcy unless it be that at the time of committing such prior act the bankrupt was indebted to some creditor or creditors in a sum or sums sufficient to support a petition in bankruptcy and unless such debt or debts are still remaining due at the time of the adjudication The section 116 6 1  A copy of the Official Gazette containing any notice inserted in pursuance of this Act shall be evidence of the facts stated in the notice
2 A copy of the Official Gazette containing any notice of an order of adjudication shall be conclusive evidence of the order having been duly made and of its date
section 5I The insolvency of a debtor whether the same takes place on the debtor s own petition or upon that of a creditor or creditors shall be deemed to have relation back to and to commence at a the time of the commission of the act of insolvency on which an order of adjudication is made against him or b if the insolvent is proved to have committed more acts of insolvency than one the time of the first of the acts of insolvencyproved to have been cornmited by the insolvent within three months next preceding the date of the presentation of the insolvency petition Provided that no insolvency petition or order of adjudication shall be rendered invalid by reason of any act of insolvency committed anterior to the debt of the petitioning creditor
The section 30 Notice of an order of adjudication stating the name address and description of the insolvent the date of the adjudication the period within which the debtor shall apply for his discharge and the Court by which the adjudication is made shall be published in the Official Gazette and in such other manner as may be prescribed
section 287 An order of adjudication shall relate back to and take effect from the date of the presentation of the petition on which it is made
635 Bankruptcy Act 1869 Nil
The S561  Every transfer of property every payment made every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor with a view of giving that creditor a preference over the other creditors shall if such person is adjudicated insolvent on a petition presented within three months after the date thereof be deemed fraudulent and void as against the Official assignee
2This section shall not affect the rights of any person making title in good faith an for valuable consideration through or under a creditor of the insolvent
635 The S541  Every transfer of property every payment made every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor with a view of giving that creditor a preference over the other creditors shall if such person is adjudged insolvent on a petition presented within three months after the date thereof be deemed fraudulent and void as against the receiver and shall be annulled by the Court
2This section shall not affect the rights of any person who in good faith and for valuable consideration has acquir ed a title through or under a creditor of the insolvent
With some difference in
the phraseology with which we are not concerned Ss 116 and 51 of the Presidencytowns Insolvency Act are in terms similar to the corresponding sections sections 10 and II of the Bankruptcy Act
Section 10 of the Bankruptcy Act and section 116 of the Presideticy towns Insolvency Act make the copy of the Official Gazette containing the order of adjudication conclusive evidence of the date of adjudication and the fact that the order of adjudication was duly made
But section 30 of the only enjoins that the notice of the order of adjudication with the necessary particulars should be published in the Official Gazette and in such manner as may be prescribed but a copy of the said Gazette containing the said notification is not made conclusive evidence either of the facts mentioned therein or of the fact that adjudication has been duly made
Section 51 of the is in terms similar to that of section II of the Bankruptcy Act and 636 under both the sections the insolvency of a debtor relates back to the time of the commission of the act of insolvency on which the order of adjudication has been made against him
But under section 287 of the  the order of adjudication relates back to and takes effect from the date of the presentation of the application on which it is made
Under section 56 of the  transfer of a property in favour of a creditor with a view to give preference to him over other creditors shall be deemed fraudulent and void as against the Official Assignee whereas under section 54 of the  the said transfer has to be annulled by the Court
There are therefore essential differences in the structure of the scheme between the three Acts in the matter of adjudication
With this background let us look at the Privy Council decision in Mohomed Siddique Yousuf s case 1 to ascertain the basis of that decision
The facts in that case were On January 20 1939 the insolvent assigned to the appellant a decree obtained by him for consideration
On April 19 1939 the petitioning creditor filed a petition in the High Court for the adjudication of the insolvent as such
One of the acts of insolvency alleged was the said assignment of the decree in favour of the appellant
On June 13 1939 an adjudication order was made against the insolvent
No one appeared except the petitioning creditor and the order recited that the insolvent had committed each of the acts of insolvency alleged in the petition
On November 23 1939 the Official Assignee gave notice of motion in the Insolvency Court for a declaration that the indenture of assignment dated January 20 1939 should be declared void as against the Official Assignee and that the transfer should be set aside
The Judge in Insolvency held on the merits that the said transfer was void under section 56 of the 
On appeal the High Court held that the order of adjudication was conclusive evidence against the appellant that the assignment was a fraudulent preference and on that 1 1943 LR 70 IA 93
637 ground it declared the transfer void
On further appeal the Privy Council agreed with the High Court
Relying on the decision in Ex _varte Learoyd 1 a decision on analogous provisions of the Bankruptcy Act the Privy Council made the following observations at p 98 The provisions of the  are also in similar terms and their Lordships feel no doubt that the principles of the English decision are as valid in India as in England
No doubt it is anomalous that a decision affecting the right of a third party should be conclusively determined against him in his absence and even without notice to him but the words of the section and the importance of maintaining the status of the debtor as determined by an order of adjudication and the necessity of securing the stability of the administration of the debtor s estate once his status has been fixed have been justly held to outweigh the consideration of hardship to the private citizen
 But the Privy Council came to the conclusion on the facts that a case was made out for the High Court for excusing the delay in preferring the appeal against the order of adjudication
On that view they set aside the order of the High Court and made the following observations for its guidance at p 99  It may be that if the appellant takes advantage of the extension of time and appeals the High Court may adopt the procedure in Ex parte Tucker 2 and content themselves with striking out the act of bankruptcy complained of and leaving the official assignee to make a fresh application without themselves determining the facts
 This decision decides three points namely i having regard to the express provisions of the  and for maintaining the status of the debtor and the stability of the administration of his estate the decision affecting the rights of a third party though made behind his back would be binding on him ii an appeal can be entertained against the 11878 2 81 638 order of the adjudication at the instance of the trans
feree and if necessary by excusing the delay in preferring the appeal and iii in such an appeal the High Court may strike out one of the acts of insolvency ie the transfer in favour of the appellant and leave it to the Official Assignee to make a fresh application
Though the principles underlying the relevant provisions of the Act were expounded the decision mainly rested on the express provisions of the 
Nor did the Privy Council hold that when there was an order of adjudication on the basis of an act of insolvency there was no necessity on the part of the Official Assignee to take out an application for setting aside the transfer constituting the act of insolvency
Though it is not very clear it appears to me that what the Privy Council stated was that in such an application the decision on the transfer forming part of the order of adjudication is conclusive evidence of the invalidity of the transfer
To put it differently in such an application the Official Assignee need not prove afresh that the transfer was a fraud on creditors or an act of fraudulent preference
That decision was mainly based upon Ex parte Learoyd 1 which in its turn was founded upon the interpretation of sections 10 and 11 of the Bankruptcy Act sections corresponding to sections 116 and 51 of the 
A scrutiny of that decision therefore will disclose the raison detre of the decision of the Privy Council
There on August 30 1877 an insolvent executed in favour of George Payne a bill of sale of his household furniture etc by way of security for consideration
The goods remained in the apparent possession of the mortgagor until January 1 1878 when Payne removed them
On January 3 1878 a bankruptcy petition was presented against the insolvent by a creditor relying upon an alleged act of bankruptcy namely that the insolvent being a trader departed from his dwelling house on December 31 1877
On January 3 1878 an order of adjudication was made on the petition upon proof of the said act of bankruptcy and that 1 639 order was advertised in the usual way in the London Gazette
On January 8 1878 the goods removed by Payne were sold on his behalf
The trustees in the Bankruptcy claimed the proceeds of the sale and the Judge of the County Court ordered the payment
On appeal Bacon C J allowed the appeal on the ground that it had not been established that there was an act of insolvency before Payne took possession of the goods
On further appeal the Court of Appeal set aside the judgment of Bacon CJ on the ground that by virtue of sections 10 and 11 of the Bankruptcy Act 1869 a bill of a sale holder is conclusively bound by the adjudication so long as it stands and cannot dispute that the act of bankruptcy on which the adjudication professedly proceeded was in fact committed and that the trustee s title related back to that act of bankruptcy James LJ after a brief survey of the historic background of the Bankruptcy Act based his judgment mainly on the construction of the provisions of sections 10 and I I of the Bankruptcy Act
The learned Judge observed at p 8  A man cannot be I duly  adjudged a bankrupt unless the great requisite of all exists that he has committed an act of bankruptcy
That is the capital offence of which he must have been guilty before he can be duly  adjudged a bankrupt
That he has been duly  adjudged a bankrupt necesssarily involves the previous commission of an act of bankruptcy
The mere fact that an adjudication has been made could have been proved without the aid of sect
That section may however only involve this that some act of bankruptcy had been committed before the adjudication was made
But then comes sect
II which has no operation at all as between the bankrupt and the trustee
The bankrupt has no rights whatever all his rights have been transferred to the trustee
The mere fact that sect
1 1 is dealing with the relation back of the trustee s title shews that it is dealing with the rights of third persons and not merely with the rights of the bankrupt and persons indebted to him
Then sect
11 goes on to provide that by way of enlargement 640 of the trustee s title he may go behind the act of bankruptcy on which the adjudication was founded and may under certain circumstances and subject to certain limitations prove that other earlier acts of bankruptcy have been committed and if this is done the trustee s title is to relate back to the earliest act of bankruptcy which is proved to have been committed within twelve months before the adjudication
This however is to be proved by evidence whereas the act of bankruptcy on which the adjudi cation is founded is proved by the production of the adjudication itself
It seems to me to be impossible to evade the words of these sections Baggallay L J also after emphasizing on the words  duly made  in section 10 of the Bankruptcy Act remarked on the scope of section 11 thus at p 10  But then comes sect
II which I think if more was needed makes the adjudication conclusive on third persons that the act of bankruptcy on which it was founded was really committed
 Thesiger L J also said much to the same effect at P 11   We start therefore with this that we are bound to hold conclusively that a due  adjudication was made on the 3rd January
It must therefore have been founded upon a proper act of bankruptcy
Then sect
11 goes still further and it is important to compare it with the provisions contained in the prior Bankruptcy Acts
Sects
234 and 235 enabled third persons to dispute the act of bankruptcy upon giving notice of their intention so to do
That provision is swept away by the Act of 1869 and in language clear and distinct the Legislature has said by sect
II that I the bankruptcy of a debtor shall be deemed to have relation back to and to commerce at the time of the act of bankruptcy being completed on which the order is made adjudging him to be bankrupt
 From the aforesaid extracts from the judgments it is manifest that the decision turned upon the express  provisions of sections 10 and 11 of the Bankruptcy Act
Under section 10 of that Act the gazette containing the 641 order was conclusive evidence that the order of adjudication was duly made on the basis of an act of insolvency and section 11 fixed the datum line for the commencement of the trustee s title from the act of bankruptcy
The former section made the order of adjudication conclusive against third parties and the latter section vests the title of the property concerned in the official receiver from the date of the act of insolvency
This judgment therefore cannot be applied to an Act which differs in all respects from the relevant provisions of sections 10 and 11 of the Bankruptcy Act on the basis of which that judgment was given
In the  neither the order of adjudication is conclusive evidence that it has been duly made nor the trustee s title dates back to the act of insolvency on which the adjudication is founded
I am therefore of the view that neither the decision in Ex parte Learoyd 1 based on the provisions of the Bankruptcy Act 1869 nor the Privy Council decision in Mahomed Siddique Yousuf vs Official Assignee of Calcutta 2 based upon the provisions of the Presidencytowns Insolvency Act has any bearing in construing the relevant provisions of the 
A similar view was expressed by a Full Bench of the Madras High Court in The Official Receiver Guntur vs Narra Go vs Narra Gopala Kri8hnayya3 and by a Full Bench of the Nagpur High Court in D G Sahasrabudhe vs Kila Chand Deochand  Co Bombay 4
Both Courts held that the decision of the Privy Council did not apply to a case under the and that a transferee who was not a party to the adjudication proceeding could contend in subsequent proceedings for annulment that his transfer was good notwithstanding that the order of adjudication was based on the alleged transfer as being an act of insolvency
I accept the correctness of the said two decisions
If so it follows that the order of adjudication made in the present case did not by its own force divest the title of Meenakshi Achi and vest it in the official receiver and that she continued to be the transferee of the decree at the time 1 2 1943 LR 70 IA 93
3 I L E 4 1LR 642 when she filed the second execution petition EP No 243 of 1940
For the same reasons when EP No 37 of 1937 was filed Meenakshi Achi had subsisting title to the decree runder the transfer deed dated February 3 1936 and therefore  the said execution petition was also in accordance with law
The next argument of the learned Counsel for the appellants is that the order of the Insolvency Court dated April 9 1943 related back to the date of the transfer ie February 3 1936 and that by the order of annulment the transfer became void from its inception with the result that on the dates when the Execution Petitions Nos 37 of 1937 and 243 of 1940 were filed Meenakshi Achi had no title to the decree and therefore the said petitions were not filed in accordance with law
The answer to this contention depends upon the true legal effect of the order of annulment of the transfer on the ground of fraudulent preference
That part of section 54 of the so far relevant to the present enquiry reads thus section 54 1  Every transfer of property  in favour of any creditor with a view of giving that creditor a preference over the other creditors shall if such person is adjudged insolvent on a petition presented within three months after the date thereof be deemed fraudulent and void as against the receiver and shall be annulled by the Court
2 This section shall not affect the rights of any person who in good faith and for valuable consideration has acquired a title through or under a creditor of the insolvent
 It is clear from the provisions of this section that a transfer of property by a debtor before insolvency in favour of a creditor giving him preference over other creditors is not absolutely void
As between the transferor and the transferee the title in the property conveyed passes from one to the other but it is liable to be annulled at the instance of the receiver
This is because the Insolvency Act confers on the official receiver a title superior that of the insolvent enabling 643 the former to get it annulled in the interest of the creditors
Sub section 2 of that section also indicates that the transfer is not void ab initio for under that sub section the rights of any person who in good faith and for valuable consideration acquired title through or under a creator of the insolvent are protected
If the transfer was ab initio void in the sense that it is a nullity all the depending transactions should fall with it
Emphasis is laid upon the word  void  in section 541 of the Act but the said word in the context can only mean voidable for it is made void only against the receiver and requires to be annulled by the Court
It follows from the aforesaid premises that such a transfer is valid till annulled in the manner prescribed by the provisions of the 
The legal effect of annulling a transfer under section 53 of the Act was considered by a Division Benchof the Madras High Court in The Official Receiver Coimbatore vs Palaniswami Chetti 1
In that decision Devadoss J observed as under at p 758 But till such a declaration is made by the Insolvency Court under section 53 the transaction is good and the mortgagee could proceed with the suit or with the execution of his decree against the insolvent s property
 Wallace J elaborated thus at p 764  Section 53 implies an attack by the Official Receiver on behalf the general body of creditors and the remedy which he is entitled to get on proving his case is that the transfer is voidable against him and may be annulled by the Court   it does not really affect the relationship of the transferor and transferee as mortgagor and mortgagee
For example if the property is sold by the Official Receiver and the creditors and costs are fully paid out of the proceeds and there is a surplus remaining
 that surplus belongs primafacie to the transferee and not to the transferor and is his unless the transferor has by appropriate proceedings established his right to it 
The relationship between the mortgagor and mortgagee remains 1 Mad
644 unaffected by any proceedings under section 53 and the mortgagee is entitled therefore to enforce his mortgage against the mortgagor except so far as proceedings under section 53 may have held the property mortgaged as assets of the mortgagor at the disposal of the general body of creditors
 The observations of the learned Judges establish two propositions i that the transaction inter se between the debtor and transferee is good and ii it is not binding on the Official Receiver so far as it is necessary to protect the interests of the creditors
The decision in Amir Ahmad vs Saiyid Hasan 1 is also one laying down the legal effect of section 53 of the Act
The learned Judges made the following observations in that case at p 903 It seems quite clear that if a transfer made by a debtor is wholly fictitious and bogus and no interest in the property passes to the transferee then the transfer is void ab initio and subsequent transferees can never be protected because the foundation of their title does not exist 
On the other hand if the transfer made by the debtor was not wholly fictitious and bogus but the intention of the parties was that property should is fact pass to the transferee then the result would depend on whether the transferee was a purchaser in good faith and for valuable consideration or not
The transfer for the time being is valid though it is voidable at the option of the receiver and it is discretionary with court to annul it under section 53 of the 
 The said observations will apply mutatis mutandis to a situation under section 54 of the Act
Indeed a Division Bench of the Nagpur High Court in Rukhmanbai vs Govindram 1 in the context of section 54 of the Act stated to the same effect thus at p 275 The wording of the section section 54 thus very clearly indicates that a transfer of the nature mentioned therein is voidable as against the receiver and is not void ab initio and may be annulled by the Court 
It is thus clear from the section 1 All 900
2 ILR
645 that till the transfer is actually annulled by the Court it remains a valid transaction
 The aforesaid discussion yields the following result 1 a transfer by a debtor of his property before insolvency in favour of a creditor with a view to giving him preference over other creditors conveys a valid title to the transferee 2 under circumstances mentioned in section 54 of the Act it is voidable against the receiver 3 when it is annulled by the Court on the ground of fraudulent preference the property vests in the official receiver who can administer it in the interest of the creditors and 4 even after the transfer is annulled it continues to be good between the transferor and transferee and in a contingency of any balance remaining of the sale proceeds after the cre ditors are fully paid the transferee would be entitled to the same
Two lines of decisions have been relied upon by the learned Counsel for the appellants
The first one holds that in the case of conflicting claims to an estate the claimant ultimately declared to be the owner thereof by the final Court cannot rely to save the bar of limitation upon a petition filed by the rival claimant to execute the decree pertaining to the estate at the time the title was in his favour and the other decides that when a transfer is set aside on the ground of fraudulent preference the official receiver can claim to recover mesne profits from the transferee of the property of an insolvent from the date of the transfer
The first line of decisions turns upon the principle that a defeated claimant had no title to the property at the time he filed the application for the effect of the final decree is that the said claimant had no title at any time and the second line of decisions is founded on some equitable doctrine
There are also decisions taking the contrary view
It is not necessary in this case 
either to go into that question or attempt to resolve the conflict
As I have held that in the case of a transfer in fraud of creditors or by fraudulent preference the transfer is good till set aside by the Court the transferee would have title to file the execution petition before the transfer was set aside
82 646 The third contention of the learned Counsel for the appellants is a weak one
It is said that the official receiver does not claim under Meenakshi Achi and therefore he cannot rely upon the execution petition filed by her to save the bar of limitation
There is a fallacy underlying this argument
The question for decision is not whether the official receiver claims under Meenakshi Achi but whether the execution petitions filed by her were in accordance with law
If as I held at the time the previous execution petitions were filed Meenakshi Achi had a valid title to execute the decree the execution petitions filed by her would certainly be in accordance with law within the meaning of article 1825 of the Indian Limitation Act
I therefore reject this contention
In view of the aforesaid conclusions arrived at by me the last two contentions based on payments of instalments do not arise for consideration
In the result the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
The appellant was the occupier of a factory where there was a pit in which dangerous fumes were likely to be present
The pit was securely covered and enclosed and no one was expected to go down into it for normal work as it was worked by gadgets fixed nearby above the ground
Something went wrong with the machinery inside the pit and five workers went down without wearing suitable breathing apparatus and without wearing a belt securely attached to a rope the free end of which could be held by some person standing outside
All the workers were overcome by poisonous gases and died
It was found that suitable breathing apparatus reviving apparatus belts and ropes were not available anywhere in the factory and were not kept for ready use near the pit
The appellant was prosecuted as the occupier for breach of the provisions Of section 363 and 4 of the Indian 
The trial Court held that no offence under section 363 had been made out and it was not proved that any permission express or implied had been given to the workmen to enter the pit and I that no offence under section 364 had been made out because no permission having been given it was not necessary to keep the breathing apparatus etc near the pit or anywhere else in the factory and consequently it acquitted the appellant
On appeal by the State the High Court set aside the 1 1952 SCR 67
655 acquittal and directed the trial Court to decide the case against the appellant in the light of the interpretation of the law made by the High Court
The High Court was of the view that as c the appellant had failed to prevent the entry of the workers he must in law be held to have permitted the entry and committed breach Of section 363  and that it was not sufficient compliance with section 364 to provide breathing apparatus etc only after coming to know that some person was about to enter the pit but that such apparatus must be immediately available at the pit at all times
Held that section 363 did not cast an absolute duty on the occupier to prevent the entry into the pit and the mere fact that a person had entered the pit did not by itself prove that he had been permitted to enter  within the meaning of that subsection
The primary duty was on the worker prohibiting him from entering the pit
At the same time the occupier was also liable if his permission to the entry whether express or implied could be inferred from the facts and circumstances of the case
Held further that section 364 cast an absolute duty on the occupier to see that the breathing apparatus etc was always available in the factory and was periodically examined and certified fit for use and a sufficient number of persons were trained in its use
But there was no duty to keep the apparatus at the pit at all times such a duty arose when some person was about to enter the pit with the permission of the occupier