Sale deed held void against official Receiver.

The appellants are three alienees from the insolvents. Their alienations have been set aside by the learned District Judge of East Godavari as fraudulent preferences under section 54 of the Provincial Insolvency Act, on applications filed by a decree-holder creditor, admittedly to the tune of about Rs.30,000. The Official Receiver declined to move the Court to set aside the alienations, and the petitioner had no option but to apply to the Insolvency Court. There were altogether six alienations set aside by the learned District Judge on six different applications filed, in a common order.

The insolvents were adjudicated on 27th January, 1947, on a creditor’s application filed on 5th November, 1945.

C.M.A.No.234 of 1950 is now of academic interest. The alienee was a lessee from the insolvents for a period of five years of a rice mill for a rent of Rs.100 a month The date of the lease was 15th August, 1945 and it was registered on 27th October 1945. The period of lease expired shortly after this appeal was filed. It is common ground that the Official Receiver has taken possession of the mill. Mr. Ramamurthi, in the circumstances, for the alienee who is also a transferee from the original lessee does not press this appeal as it has now become infructuous. It is dismissed with costs of the respondent-creditor.

C.M.A..No.324 of 1950 raises an interesting point of law for determination. In this case the alienee-appellant was a creditor under a pronote, Exhibit B-24, dated 25th August, 1943, for a sum of Rs.2,500. On 20th July, 1945, he took a sale under B-23 from the insolvent of 5-19 acres of dry land for a consideration of Rs.4,400 made up as follows: (1) Rs.2,558-2-0 in settlement of his own pronote debt; (2) the discharge of a pronote debt under Exhibit B-13, dated 1st June, 1945, amounting to Rs.1,214-11-6 due to one Subba Rao (R.W. 10); (3) Rs.320 to be paid to one Adinarayanamurthi due under a pronote, the payment being evidenced by Exhibit B-25; (4) a balance of Rs.307-2-6 paid before the Sub-Registrar. The learned District Judge had no reason for doubting that Exhibit B-23 was executed for full -consideration and while setting aside this alienation directed the alienee to prove his debt in the insolvency.

Mr. Umamaheswaram contends that this alienee was a perfectly bona fide creditor who took the alienation to discharge genuine debts. There can, however, be no doubt that this alienation would be a fraudulent preference within the scope of section 54 of the Provincial Insolvency Act and is for the reasons given by the learned District Judge, a fraudulent preference, the most cogent being that this decree-holder for Rs.30,000 who had expended a great deal of money in obtaining decrees was rather blatantly disregarded and preference given to the simple creditors to pay whom Exhibit B-23 was effected by the insolvents. On its merits this appeal must also fail.

Mr. Natesan for the respondent has put forward a legal objection to this alienation not taken before the District Judge, which I think must also prevail. He contends that it is void in any event under sub-sections 2 and 7 of section 28 of the Provincial Insolvency Act as a transfer which was really effected subsequent to the filing of the insolvency petition on 5th November, 1945, in that Exhibit B-23 which was executed on 20th July, 1945, by the four executants was registered only on 17th November, 1945. The executants of Exhibit B-23 are the three brothers adjudged insolvents and a stranger. The registration of Exhibit B-23 was several days after the filing of the insolvency petition on 5th November, 1945. Mr. Natesan relies on a Bench decision of this court in Venkadari Somappa v. Official Receiver of Bellary1 by Madhavan Nair and Stodart, JJ., which clearly lays down that for the purpose of section 54 of the Provincial Insolvency Act, the date of the transfer is the date of the registration of the document and not the date of its execution, and the transfer cannot