Jurisdiction over sham transfers in insolvency survives Section 53 where the transfer is alleged void ab initio.

Section 4 of the Provincial Insolvency Act, 1920 gives the insolvency court wide jurisdiction to decide questions of title and other matters arising in insolvency, subject to the Act. Section 53 operates only in relation to voidable and annullable transfers within the statutory period and does not bar inquiry into a transfer alleged to be sham, fictitious, or void ab initio. A nominal transfer passes no title and is a nullity in law. On that distinction, the insolvency court can determine whether the transfer is sham and void, and Section 53 does not exclude that jurisdiction.

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Issues: Whether the insolvency court had jurisdiction under Section 4 of the Provincial Insolvency Act, 1920 to decide the validity of a transfer alleged to be sham and fictitious, notwithstanding that the transfer was made more than two years before the insolvency proceedings and Section 53 of the Act was relied upon as a bar.

Analysis: Section 4 confers the widest powers on the insolvency court to decide all questions of title and other matters arising in insolvency, subject only to the other provisions of the Act. Section 53 deals with transfers that are voidable and annullable within the statutory period, but it does not govern transfers that are void ab initio. A nominal or sham transfer passes no title and is a nullity in law. The distinction between void and voidable transfers is decisive: where the transfer is alleged to be fictitious or sham, the matter falls within the court's general jurisdiction under Section 4 and is not excluded by Section 53.

Conclusion: The insolvency court had jurisdiction to determine whether the transfer was sham and void, and Section 53 did not bar such inquiry. The view of the High Court was erroneous.

Ratio Decidendi: Section 53 of the Provincial Insolvency Act, 1920 bars only challenges to voidable transfers within the statutory period and does not exclude the insolvency court's jurisdiction under Section 4 to decide whether a transfer is void, sham, or fictitious.

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