DASTRU MAHAR Vs. OFFICIAL-RECEIVER

JUDGEMENT

(1.) ONE Govind Baliram wast adjudged insolvent on the 14th July 1914. The appellant alleges that the immovable property in dispute devolved on the insolvent in 1916 and that the latter sold it to him on the 16th April 1919. In 1924 the property was ordered by the Insolvency Court to be sold for the benefit of the creditors. The appellant objected to the sale alleging that as he was a bona fide purchaser for value-before the Receiver intervened with regard to it, the sale was good against the Receiver. The Insolvency Court disallowed the objection without any proper inquiry into the matter.

(2.) THE District Judge upheld the trial Court's order on the ground that no question of good faith or valuable consideration arose in the matter as the property vested in the Receiver tinder Section 16 of the Insolvency Act, 1907, corresponding to Section 28 of the Act of 1920, and it was, therefore, not necessary to make any inquiry. This view does not appear to be correct. In Alimahmad Abdul Hussein v. Vadilal Devchand Parekh [1919] 43 Bom. 890 it was held that immovable property acquired by an insolvent after the adjudication order but before his final discharge, can be transferred by him provided the transaction is bona fide and for value and is completed before the intervention of the Official Assignee. This decision refers to and adopts the rule in Cohen v. Mitchell [1890] 25 Q.B.D. 262 which was followed in India even before that case was decided.

(3.) I , therefore, set aside the orders of the lower Courts and remand the case for a trial with advertent to what is stated above. I make no order as to costs in this Court. Costs in the lower Courts will abide the result.