B.DAYAL, J. - (1.) JUDGEMENT This appeal arises out of an order passed in the Insolvency Judge refusing annulment of alienation of his property by the insolvent on the 4th of July, 1950. On appeal, this order was set aside by the learned District Judge and the transfer was annulled. The transferee Ram Lachman has come up to this Court in appeal.
(2.) THE facts may be shortly stated which are not in controversy. Brahma Shankar and others, who were creditors of Bishambhar Nath filed an application for adjudging Bishambhar Nath an insolvent on the 3rd of October, 1950. In that application, they alleged that the judgment-debtor Bishambhar Nath had transferred all his property on the 4th of July, 1950 to favour of Ram Lachman. This transfer was with the object of delaying and defeating the creditors. This application was not opposed and on the 19th of January, 1951, Bishambhar Nath was declared insolvent. On the 4th of February, 1952, the Official Receiver filed an application under Section 53 of the Provincial Insolvency Act for annulment of the transfer, elated the 4th of July, 1950 in favour of the appellant Ram Lachman. The appellant pleaded that he was a bona fide purchaser in good faith and for valuable consideration and the transfer could not be annulled. The learned Insolvency Judge went into the evidence adduced by the parties and came to the conclusion that the appellant was a bona fide purchaser for value and in good faith. He, therefore, refused to annul the transfer and dismissed the application made by the Official Receiver, on the 3rd of December, 1954. Against that order, the Official Receiver went up in appeal before the learned District judge find contended that the learned Insolvency judge was wrong in going into the facts and evidence at that stage. The Official Receiver pleaded that the adjudication of insolvency itself was based upon a finding that the transfer was made with the intent of delaying and defeating the creditors. That decision was res judicata and was binding on everybody concerned. On an application under S. 53 of the Provincial Insolvency Act, the learned Insolvency Judge was bound to hold that the transaction was invalid and to annul it without deciding the question again. In support of his argument Sheo Raj Bahadur Mathur v. Abdul Aziz, AIR 1956 All 68 was cited. This was a decision by a learned single Judge of this Court and was binding upon the District Judge. The District Judge consequently followed this decision, allowed the appeal and annulled the said transfer. Ram Lachman, appellant, the transferee has appealed against that order and the contention of the learned counsel for the appellant in this appeal is that the decision at the time of adjudication was not res judicata and the question of fact could be gone into by the court while deciding the application under S. 53 of the Provincial Insolvency Act. When the matter came up before the learned single Judge of this Court, he was of the opinion that the aforementioned case of AIR 1956 All 68 needed a reconsideration. The case has, therefore, been placed before us for disposal. The question for our consideration is therefore one purely of law. The lower appellate court has not gone into the facts and the case will have to be remanded to that court as we do not agree with the decision of the lower appellate court on that question of law.
(3.) WE will therefore proceed to consider the provisions of the Provincial Insolvency Act and then deal with the case law which has been cited before us by the learned counsel for the appellant.;