Sankar Ram And Co vs Kasi Naicker And Others

The Supreme Court addressed whether the protection under the proviso to Section 55 of the Provincial Insolvency Act, 1920 is available to a bona fide transferee for valuable consideration after the presentation of an insolvency petition but before the adjudication order. The Court held that the appellant, having purchased shares from the insolvent debtor without notice of the insolvency petition, is entitled to the protection under Section 55. The appeal was allowed, reversing the lower court's decision that denied relief based on the timing of the insolvency adjudication.