Creditor status and completed registration determine insolvency timing for a transfer under the Registration Act.

A holder of a negotiable instrument who has obtained a decree on it remains a creditor entitled to seek adjudication of the debtor as insolvent, even where the instrument was endorsed for collection. For limitation under insolvency law, a transfer by registered sale deed becomes operative only on completion of registration, not on execution or mere presentation for registration, because the legal effect arises when the statutory registration process is completed under the Registration Act. The act of insolvency was therefore referable to the date of completed registration, and the contrary view was set aside for fresh consideration on whether the transfer amounted to an act of insolvency.

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Issues: (i) Whether the petitioner was a creditor entitled to apply for adjudication of the debtor as an insolvent. (ii) Whether, for the purpose of limitation under the insolvency law, the act of insolvency occurred on the date of execution, presentation for registration, or completion of registration of the sale deed.

Issue (i): Whether the petitioner was a creditor entitled to apply for adjudication of the debtor as an insolvent.

Analysis: The petitioner had obtained a decree on a promissory note endorsed in his favour for collection. A holder of a negotiable instrument who has obtained a decree on it is a creditor within the meaning of the insolvency law. The endorsement for collection did not take away the right to maintain the application.

Conclusion: The petitioner was entitled to file the insolvency application.

Issue (ii): Whether, for the purpose of limitation under the insolvency law, the act of insolvency occurred on the date of execution, presentation for registration, or completion of registration of the sale deed.

Analysis: An act of insolvency based on a transfer is referable to the date when the transfer becomes legally effective. Section 47 of the Registration Act does not ante-date the legal effect of an uncompleted registration. A document presented for registration is not fully registered until the statutory procedure under Sections 60 and 61 of the Registration Act is completed and the certificate of registration is signed, sealed and dated. Accordingly, the relevant date is the date of completion of registration, not the date of presentation.

Conclusion: The act of insolvency was committed on the date of completion of registration, namely 19 January 1950.

Final Conclusion: The revision succeeded to the extent that the contrary findings were set aside and the matter was sent back for fresh consideration of whether the transfer amounted to an act of insolvency.

Ratio Decidendi: For insolvency purposes, a transfer by registered instrument takes effect on completion of registration, and a creditor holding a decree on a negotiable instrument remains entitled to seek adjudication as an insolvent.

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