The main legal point established in the judgment is that the consent of the Insolvency Court is not required for a creditor to bring a suit under S. 53 of the Transfer of Property Act to set aside an alienation made by the debtor before he is adjudged an insolvent.

Alfred Henry Lionel Leach, C.J.

1. The question which has been referred is this:

Is a suit by a creditor under S. S3 of the Transfer of Property Act to set aside an alienation made by the debtor before he is adjudged an insolvent maintainable without the leave of the Insolvency Court?

2. In Vasudeva Kamath v. Lakshminarayana Rao (1918) 36 M.L.J. 453 : I.L.R. Mad. 684 a Bench of this Court (Wallis, C.J., and Ayling, J.,) held that such a suit could not be instituted without the leave of the Insolvency Court and this decision was accepted as being correct by the Rangoon High Court in Mohamed Adjim Nacoda v. E.M. Chettyar Firm I.L.R.(1930) Rang. 7 and by the Lahore High Court in Din Mohammad v. Mt. Walait Begum A.I.R. 1938 Lah. 856. The decision was, however, strongly criticised by another Bench of this Court (Wallace and Thiruvenkatachariar, JJ.,) in Subramanyam v. Narasimham (1928) 56 M.L.J. 489. We consider that there is full justification for the criticism.

3. Section 53 of the Transfer of Property Act states that every transfer of Immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of a creditor defeated or delayed. Before 1929 a creditor could bring a suit under this section in his individual capacity, but in that year the section was amended and there is now a specific direction that the suit shall be instituted on behalf of, or for the benefit of, all the creditors. Section 17 of the Presidency Towns Insolvency Act and Section 28 of the Provincial Insolvency Act vest the property of the insolvent in the Official Assignee or the Official Receiver as the case may be and these sections prohibit, without the leave of the Insolvency Court a creditor of the insolvent filing a suit against the insolvent during the pendency of the insolvency proceedings. All matters regarding the insolvents estate have to be decided by the Insolvency Court in proceedings contemplated by the Act.

4. Property which the insolvent has transferred in fraud of his creditors is not his property. The transaction is voidable, but until it has been set aside the transferee has a valid title. Therefore, where property has been transferred by a deed which falls within the mischief of Section 53 and the transferor becomes insolvent, the property does not form part of his estate and come within the purview of Section 17 of the Presidency Towns Insolvency Act or Section 28 of the Provincial Insolvency Act. Of course, it comes within the purview of these sections when the Official Assignee or the Official Receiver or a creditor, obtains a declaration that the transaction offends against Section 53.

5. In Vasudeva Kamath v. Lakshminarayana Rao (1918) 36 M.L.J. 453 : I.L.R. Mad. 684 certain creditors filed a suit for a declaration that an alienation of Immovable property by an insolvent was void under Section 53 of the Transfer of Property Act. They did not ask for the leave of the Insolvency Court, notwithstanding that the Official Receiver was made a party to the suit. The Court held that the effect of an adjudication under Section 16 (1) of the Provincial Insolvency Act, Act III of 1907 (which corresponds to Section 28 (2) of the present Provincial Insolvency Act) was to prohibit a creditor bringing a suit under Section 53 of the Transfer of Property Act without the consent of the Insolvency Court. The learned Judges who decided that case overlooked the fact that a suit under Section 53 of the Transfer of Property Act is not a suit in respect of the property of the insolvent, but is a suit in respect of property which had been the property of the insolvent and which he had transferred in fraud of his creditors. Such a suit does not fall within the prohibition of the Insolvency Act. Moreover, the very definite right given by Section 53 of the Transfer of Property Act to a creditor cannot be taken away without an express provision by the Legislature to this effect and there is nothing in the Pre