Section 56: Avoidance of preference in certain cases. (1) Every transfer of property, every payment — Insolvancy (Karachi Division) Act, 1909

Current legal status not independently verified — Source: Pakistan Code (single official PDF, 2026-08-21). Whether this provision is still in force has not been independently verified.

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56. 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, with a view of giving that creditor a preference over the other creditors, shall, if such person is adjudged insolvent on a petition presented within three months after the date thereof, be deemed fraudulent and void as against the official assignee. (2) This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the insolvent.

Effective date: 1909-01-01

Related sections

Section 55: Avoidance of voluntary transfer. Any transfer of property, not being a transfer made Section 57: Protection of bona fide transactions. Subject to the foregoing provisions with respect to Section 54: Duties of Court executing decree as to property taken in execution. Where execution of a Section 58: Possession of property by official assignee Section 53: Restriction of rights of creditor under execution Section 59: Seizure of property of insolvent

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