The central legal point established in the judgment is that a sale of a person's property without notice to the Official Receiver, in whom the insolvent's property is vested, is not valid under the Provincial Insolvency Act.

Pandrang Row, J.

1. This is an appeal from the order of the District Judge of Nellore dated 18th February, 1936, allowing an application by the Official Receiver to set aside a sale held in execution of a decree by the Additional District Munsiff of Nellore, on the 23rd January, 1933. The relevant facts are as follows. The properties that were sold in Court auction belonged to the insolvents against whom a creditors petition to adjudicate them as insolvents was admitted in October, 1932. Notice of the petition was published in the Gazette on 14th January, 1933. The sale was actually held, as observed already, on the 23rd January, 1933, that is to say, after the publication in the Gazette of the petition. The properties were brought to sale by another creditor of the insolvents, the appellant Polamma, who was represented throughout by her agent Chidambaram Chetti. There is evidence in the case which has been accepted by the Court below to show that before the sale there was an attempt to bring about a composition, that Chidambaram Chetti, the agent was also one of those present when the matter of composition was talked about and that he left the place after promising to take the instructions of his employer. Instead of doing so he got the properties purchased in the name of the decree-holder his employer on the 23rd January. The facts therefore clearly show that the decree-holder purchaser as well as her agent was perfectly aware that there had been an insolvency petition filed and that it was pending and it was with this knowledge which they kept back from the executing Court which held the sale that they had the properties brought to sale actually on the 23rd January and purchased them in the name of the decree-holder. It is-further alleged that the amount for which the properties were purchased by the decree-holder was very low but this matter need not be pursued because there has been no finding on that point. The decree-holder was permitted to set off the purchase money against the amount due under the decree to herself. This is therefore a case in which one creditor has been able to get hold of some of the properties of the insolvents for herself to the exclusion of the other creditors. Prima facie in my opinion this is inconsistent with good faith. The question that arises in this case is whether the decree-holder purchaser is entitled to claim the benefit of Section 51(3) of the Provincial Insolvency Act which provides that a person who in good faith purchases the property of a debtor under a sale in execution shall in all cases acquire a good title to it against the Receiver. Considerable reliance has been placed by the appellants learned Advocate on the observations contained in Muthan Chettiar v. Venkituswami Naicken AIR1936Mad819 , more particularly on the observations dealing with the effect of Section 51(3) of the Provincial Insolvency Act. It has been laid down in that case by Venkatasubba Rao, J., that, in spite of the vesting of the properties in the receiver from the date of the presentation of the petition for insolvency, if a sale is held in execution a purchaser in good faith acquires a good title to the property. It is not necessary for the purpose of this appeal to deal with the contention that this observation is not in accordance with what was decided by the Privy Council in Raghunath Das v. Sundar Das Khetri (1914) 27 M.L.J. 150 : L.R. 41 IndAp 251 : I.L.R. 42 Cal. 72 (P.C.) and by a Bench of this Court in Anantharama Aiyar v. Kuttimalu Kovilamma (1916)30MLJ611 . For the purpose of this appeal that point may be assumed in the appellants favour, namely, that in spite of the vesting of the insolvents properties in the Official Receiver much earlier than the sale in question the sale would be valid if the purchaser is found to have purchased the property in good faith. The only question therefore that has to be decided is whether the purchaser acted in good faith. The finding on this point by the l