JUDGMENT

Beckett, J. - The facts which give rise to the present petition for revision are as follows: Mehndi Khan, the principal respondent, was adjudicated an insolvent on 7th October 1936. This was done on a creditor's petition, alleging that Mehndi Khan had committed an act of insolvency by alienating an important portion of his property on 7th June 1935, a few days before the petition was presented. The application for adjudication was not opposed. The insolvent was directed to apply for discharge within one year. On 12th January 1937 the Official Receiver sought to carry out the main object of the proceedings by means of an application, in which it was asserted that the alienation in question amounted to a fraudulent preference of the creditors in whose favour it had been made, and the Court was requested to annul the transfer under Section 54, Provincial Insolvency Act, 1920. After this application had been put in, it appears that some of the creditors represented to the receiver that the transferees were not in fact creditors of the insolvent, but had been falsely shown as such for the purpose of giving a colourable appearance to the transaction, which was in reality a voluntary transfer of property without consideration, which ought to be set aside under Section 53 of the Act. On 21st December 1937, the receiver applied for permission to amend the application by bringing in Section 53 of the Act as well as Section 54. The Insolvency Judge refused to allow the amendment, holding the case now put forward by the receiver to be inconsistent with the case originally put forward by him; but he gave permission under Section 54-A to one of the creditors to present a fresh petition under Section 53. This petition was presented by the creditor on 8th February 1938.

3. In the meantime, the insolvent had ap-plied for discharge. The application came up for hearing on 9th February 1938, on which date the insolvent failed to put in an appearance. The insolvency Court thereupon annulled the adjudication under Section 43 of the Act, at the same time directing that his estate should continue to vest in the Official Receiver for the benefit of the creditors, and that the proceedings instituted under Section 53 should be continued. The transferees of the property affected by the proceedings under Section 53 appealed to the District Judge on the ground that the proceedings under Section 53 could not continue after the adjudication had been annulled. The District Judge dismissed the appeal and the petition for revision was then presented to this Court. As there is a conflict of authority as to the powers of an insolvency Court after the annulment of an adjudication under Section 43, Provincial Insolvency Act, the petition has now been referred to a Division Bench. With regard to the powers of an insolvency Court after the annulment of an adjudication, there are two widely divergent sets of decisions, one holding that the insolvency Court has no power to do anything more than pass an order vesting the property of the insolvent in some third party against whom the creditors must have ceased to enforce their claim elsewhere. According to the other set of authorities, which follow certain English decisions, the insolvency Court may, in certain circumstances, retain powers of control and supervision even after an adjudication had been annulled. While the main question to be considered is whether the annulment of adjudication automatically has the effect of bringing the powers of the insolvency Court to an end, there are certain connected matters which have to be considered at the same time. One more important of these questions is whether an insolvency Court is required to annul an adjudication under Section 43 on the default of the insolvent or has the power to postpone the annulment until there has been a final disposal of the estate. One principal reason for the divergence of opinion on the main point is the difficulty which has been felt in ho