Report No. 26
55. Avoidance of preference in certain cases.-(1) Every transfer of property, every payment made, every obligation incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor or surety with the view of giving that creditor or surety preference over the other creditors, shall, if such person is adjudged insolvent, on a petition presented within six months after the date thereof, be deemed fraudulent and void against the Official Assignee.
Explanation.-For the purposes of this section, in the case of a transaction which is required to be made by a registered instrument under any law for the time being in force, and which is made by such a registered instrument, the date of registration of the instrument shall be deemed to be the date of the transaction.
(2) This section shall not affect the rights of any person who in good faith and for valuable consideration has acquired a title through or under a creditor or surety of the insolvent.
[Section 54, P.A. modified.] [Cf. section 56, P.T.A.]
56. By whom petitions for avoidance may be made.-A petition for the avoidance of any transfer under section 54, or of any transfer, payment, obligation or judicial proceeding under section 55, may be made by the Official Assignee or, with the leave of the court, by any creditor who has proved his debt and who satisfies the court that the Official Assignee has been requested and has refused to make such petition.
[Section 54A, P.A.]