Report No. 26

57. Protection of bona fide transactions.-Subject to the foregoing provisions with respect to the effect of insolvency on execution and with respect to the avoidance of certain transfers and preferences, nothing in this Act shall invalidate in the case of an insolvency-

(a) any payment by the insolvent to any of his creditors;

(b) any payment or delivery to the insolvent;

(c) any transfer by the insolvent for valuable consideration; or

(d) any contract or dealing by or with the insolvent for valuable consideration:

Provided that any such transaction takes place before the date of the order of adjudication, and that the person with whom such transaction takes place acts in good faith and has not at the time of the transaction notice of any available act of insolvency committed by the insolvent before that time.

[Section 55, P.A.] [Cf. section 57, P.T.A.]

Explanation.-In this section, "available act of insolvency" means any act of insolvency available for petition of insolvency at the date of the presentation of the petition on which the order of adjudication is made.

[Cf. section 167, English Act.] [New]