AIR 1970 ANDHRA PRADESH 38

Andhra Pradesh High Court

Hon'ble Judge(s): Venkateswara Rao , J

(A) Provincial Insolvency Act (5 of 1920) , S.4, S.53— Transfer by insolvent only voidable - Transferee has full rights in respect of property till transfer in his favour is annulled - Court can, under S.4 consider whether transfer by transferee from insolvent was valid. One Seshachalam settled his lands and house in favour of his sister's son Seetharama on 12-6-58. The brother of the settlee and another creditor moved the sub-court at Ongole to adjudge Seshachalam as an insolvent treating the above settlement as an act of insolvency. Seshachalam was adjudged insolvent on 29-9-1959. On 17-3-60, Seetharama sold the lands and house to Hanumantharao and Parameswardu respectively. On 17-12-62 the Official Receiver in whom the estate of Seshachalam vested, applied under Section 53 of the Provincial Insolvency Act for annulment of the settlement by the insolvent in favour of Seetharama. The vendees were, however, not impleaded in such application. The settlement was annulled and the Official Receiver moved to sell the properties, whereupon the vendees applied under Section 4 of the Act for declaration of their title and for injuncting the Official Receiver from interfering with their peaceful possession of the properties. The Official Receiver, inter alia, contended that the vendees were bound by the order of annulment passed in his application under Section 53 fi....