Bona fide transferee protection survives insolvency relation-back where transfer occurs before adjudication without notice of the petition.

The proviso to Section 55 of the Provincial Insolvency Act, 1920 protects a bona fide transferee for valuable consideration where the transfer is made after presentation of the insolvency petition but before adjudication, provided the transferee had no notice of the petition. Sections 28 and 55 must be read harmoniously: although adjudication relates back to the petition date under Section 28(7), that deeming rule does not defeat the express protection in Section 55. The statutory safeguard is therefore available when its conditions are satisfied.

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Issues: Whether the protection in the proviso to Section 55 of the Provincial Insolvency Act, 1920 is available to a bona fide transferee for valuable consideration where the transfer is made after presentation of the insolvency petition but before the order of adjudication, and without notice of the petition.

Analysis: Section 28 and Section 55 serve different purposes and must be read together harmoniously. Although Section 28(7) provides that an order of adjudication relates back to the date of presentation of the petition, the proviso to Section 55 expressly protects a transaction that takes place before the date of the order of adjudication, provided the transferee had no notice of the presentation of the insolvency petition. A construction that denies effect to this proviso would render it redundant and defeat the legislative intent. The protection is therefore available where the statutory conditions are satisfied.

Conclusion: The bona fide transferee for valuable consideration without notice is entitled to the protection of the proviso to Section 55, even though the transfer was made after presentation of the insolvency petition and before adjudication.

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