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Report No. 26

22. "Void" and "voidable".-In sections 55 and 56 of the Presidency Act relating to avoidance of voluntary transfers and transfers by way of fraudulent preference, the word used is 'void'. In section 53 of the Provincial Act dealing with voluntary transfer, the word used is 'voidable', while in section 54 dealing with fraudulent preferences, the word used is 'void'. The question for consideration is whether in the new law the word 'void' or 'voidable' should be used. It is true1 that the word 'void' has been construed as 'voidable'. The object of using the word 'void' instead of 'voidable', as observed in an English case, seems to be to make it clear that the title of the trustee could not be avoided by anything done between the date of bankruptcy and the declaration of the trustee's title2. In another English case3 the point is explained in the following words:-

"On one side it is said void ab initio-void from the date of settlement. Where do you find that? The words are not there. There are other words which point in the contrary direction and these are the words 'void against the trustee in the bankruptcy'. What do they mean? They mean void as against the trustee in the bankruptcy from the date of the accrual of his title or in other words, void from the date of the act of bankruptcy to which the title of the trustee relates back."

These two cases were considered in later cases4. In Gunsbourg & Co. Ltd., 1920 AER 492: (1920) 2 BK 426, a doubt was cast whether the doctrine of relation back applies in cases where a settlement is declared void as against the trustee. But the view taken in earlier cases has not been overruled. In any case the word 'void' has not in practice given rise to any difficulty, and as explained above has been used with a definite object. We, therefore, think that the word 'void' is to be preferred to 'voidable'5.

1. Mulla Law of Insolvency in India, (1958), p. 614, para. 620, and Williams, 17th Edn., P. 348.

2. See Brall, ex. parte Norton (in re:), (1893) 2 QB 381, Vaughan Williams J.

3. Carter and Kenderdine's Contract (in re:), (1897) 1 Ch 776 CA.

4. Hart, ex-parte Green (in re:), (1912) 3 KB 6 and A. Gunsbourg & Co. Ltd. (in re:), 1920 All ER 492.

5. See App I, clauses 54-55.

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