Pollock, J—The question referred to us is: ''When an act of insolvency which forms the basis of the order of adjudication consists of a certain transfer, can the transferee question the correctness of that order in the subsequent proceedings for annulment and contend that the transfer is good when he was not a party to the adjudication proceedings?''

2. The question is whether the principle applied by the Judicial Committee in Mahomed Siddique Yousuf v. Official Assignee of Calcutta in a case under the Presidency-Towns Insolvency Act applies to cases under the Provincial Insolvency Act. The principle there applied was the principle laid down in Ex parte Learoyd; In re Foulds,1679 10 Ch 3. On the particular facts of that case the principle laid down was fairly simple. One F committed an act of bankruptcy by departing from his dwelling house on 31-12-1877 with intent to defeat or delay his creditors; on 1-1-1878 a creditor removed goods that till then had been in the apparent possession of F and sold them on 8th January; a bankruptcy petition was presented against F on 3-1-1878, and, with what to Indian Courts must seem startling rapidity, an order adjudging F bankrupt was passed on the same day. The question was whether the trustee in bankruptcy was entitled to the proceeds of the above sale. The decision of the Court of Appeal was based on the wording of Sections 10 and 11, Bankruptcy Act of 1869, which was then in force. Section 10 stated that a copy of the London Gazette containing the order adjudging the debtor to be bankrupt shall be conclusive evidence in all legal proceedings of the debtor having been duly adjudged bankrupt and of the date of the adjudication. Section 11 went on to say that the bankruptcy of a debtor shall be deemed to have relation back to and to commence at the time of the act of bankruptcy being completed on which the order is made adjudging him to be bankrupt. The Court of Appeal held that the order published in the Gazette was conclusive evidence that the debtor had been duly adjudged bankrupt, which necessarily involved the previous commission of an act of bankruptcy, and that by virtue of Section 11, the bankruptcy must relate back to the act of bankruptcy, which on investigation is found to have occurred on 81st December,: so that on 1st January the bankrupt had no rights whatever; all his rights had been transferred to the trustee in bankruptcy.

3. The decision has, however, been interpreted as laying down the principle that the adjudication is, so long as it stands, conclusive evidence as against a third person that the act of bankruptcy on which the adjudication was professedly founded was in fact committed: see Williams on Bankruptcy, 15th edition, at page 228. Their Lordships of the Judicial Committee remarked that this principle was well established, and applied it in Mahomed Siddique Yousuf v. Official Assignee of Calcutta There one of the acts of insolvency alleged was the assignment of a decree by the debtor to a creditor, amounting to a fraudulent preference, and it was held that on an application by the Official Assignee to have the assignment declared void as against the Official Assignee it was not open to the transferee to show that it was not a fraudulent preference.

4. In Ex parte Learoyd; In re Foulds,1679 10 Ch 3 James L.J. stated:

I cannot see how to escape from the plain words of Sections 10 and 11 of the Act.... A man cannot be '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, necessarily 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 Section 10. That section may, however, only involve this, that some act of bankruptcy had been committed before adjudication was