The Presidency-Towns Insolvency Act, 1909

ACT M OF 1909
(THE PRESIDENCY-TOWNS INSOLVENCY ACT, 1909.)
CONTENTS
PRELIMINARY.
SECTION.
1. Short title and commencement.
2. Definitions.
PART 1
CONSTITUTION AND POWERS OF COURT.
Jurisdiction,
3. Courts having jurisdiction in insolvency.

4. Jurisdiction to be exercised by a single Judge.
5. Exercise of Jurisdiction in chambers,
6. Delegation of powers to officers of Court.
7. Powers of Court to decide all questions arising in insolvency.
Appeals.
8. Appeals in insolvency.
PART IT
PROCEEDINGS FROM ACT OF INSOLVENCY TO DISCHARGE.
Acts of insolvency.
9. Acts of insolvency.
Order of adjudication.
10. Power to adjudicate.
11. Restrictions on jurisdiction.
12. Conditions on which creditor may petition.
13. Proceedings and order on creditor's petition. M. Conditions
on which debtor may petition.
15. Proceedings and order on debtor's peiilion.
16. Discretionary powers as to appointment of interim receiver.
17. Effect of order of adjudication.
SECTION
576 . The Presidency-towns Insolvency Act, 1909.
[Act in18. Slay of proceedings.
18A. Control over insolvency proceedings in subordinate Courts' 19. Power
to appoint special manager,
20. Advertisement of order of adjudication.
Annulment of adjudication.
21. Power for Court to annul adjudication in certain cases.
22. Concurrent proceedings in Courts in India.
23. Proceedings on annulment.
Proceedings consequent on order of adjudication.
24. Insolvent's schedule.
25. Protection order.
26. Meetings of creditors.
27. Public examination of the insolvent.
Composition and schemes of arrangement.
28. Submission of proposal and acceptance by creditors.
29. Approval of proposal by Court,
30. Order on approval.
31. Power to re-adjudge debtor insolvent,
32. Limitation of effect of composition or scheme.
Control over person and property of insolvent.
33. Duties of insolvent as to discovery and realization of property.
34. Arrest of insolvent.
35. Redirection of letters.
36. Discovery of insolvent's property.
37. Power to issue commissions.
Discharge of insolvent.
38. Discharge of insolvent,
39. Cases in which the Court must refuse an absolute discharge.
40. Hearing of application for discharge.
41. Power to annul adjudication on failure to apply for discharge.
42. ■ Renewal of application and variation of terms of order.
43. DuLy of discharged insolvent to assist in realization of property.
44. Fraudulent settlements.
45. EffecL of order of discharge.
of 1909.]
The Presidency-towns Insolvency Act, 1909. 577
PART III
:
ADMINISTRATION or PROPERTY.
Proof of debts.
SUCTION,
46- Debts provable in insolvency.
47. Muiual dealings and sct-orf.
48. Rules as to proof of debts.
49. Priority of debts.
50. Rent due before adjudication.
Property available for payment of debts.
51. Relation of assignee's title.
52. Description of insolvent's property divisible amongst creditors.
Effect of insolvency on antecedent transactions.
53. Restriction of rights of creditor under execution.
54. Duties of Court executing dccree as to property taken in execution.
55. Avoidance of voluntary transfer,
56. Avoidance of preference in certain cases.
57. Protection of bona fide transactions.
Realization of property.
58. Possession of propeny by official assignee.
59. Seizure of property of insolvent.
60. Appropriation of portion of pay or other income tocrcdi tors.
61. Vesting and transfer of property.
62. Disclaimer of onerous properly,
63. Disclaimer of leaseholds,
64. Power to call on official assignee to disclaim.
65. Power for Court to rescind contract.
66. Power for Court to make vesting order in respect of disclaimed
property.
67. Persons injured by disclaimer may prove.
68. Duty and powers of official assignee as to realization.
Distribution of property.
69. Declaration and distribution of dividends.
70. Joint and separate properties.
71. Calculation of dividends.
SECTION.
578 The Presidency-towns Insolvency Act, 1909.
72. Right of creditor who has not proved debt before declaration of
[Act in dividend.
73. Final dividend.
74. No suit for dividend.
75. Power to allow insolvent to manage property, and allowance to
insolvent for maintenance or service.
76. Right of insolvent to surplus.
PART IV
OFFICIAL ASSIGNEES.
77. Appointment and removal of official assignees of insolvent's estate.
78. Power to administer oath.
79. Duties as regards the insolvent's conduct.
80. Duty to furnish list of creditors,
8.1. Administrative control over official assignee and deputy
official assignee,
81A. Salary, allowances, pension and conditions of servicc of
official assignee and deputy official assignee. 8IB.
Establishment of official assignee.
82. Misfeasance.
82A. Liability of Slate Government for cosls in legal proceedings, etc.
82B. Certain liabilities not to be incurred without the express
direction of the Court.
82C. Sums paid under section &2A or scction 82B to be realised from the
estate of the insolvent.
83. Name under which lo sue or be sued.
84. Office vacatcd by insolvency.
84A. Account of official assignee, investments and proceeds of
investments.
85. Discretionary powers and control thereof.
86. Appeals lo Court.
87. Control of Court.
PART V C OMMITTEE OF
INSPECTION.
88. Committee of inspection.
89. Control of Committee of inspection over official assignee.
PART VI
PROCEDURE.
90. Powers of the Court.
91. Consolidation of petitions.
92. Power lo change carriage of petition,
93. Continuance of proceedings on death of debtor.
94. Power to slay proceedings. %
95. Power to present petition against a partner.
96. Power lo dismiss petition against some respondents only.
97. Separate insolvency pelitions against partners.
SECTION.
of 1909.]
The Presidency-towns Insolvency
98. Suits by official Act, and
assignee 1909. 579
involvcnl's partners.
99. Proceedings in partnership name,
100. Warrants of Insolvency Courts.
PART vn
Li M [TAT [ON.
101. Limitation of appeals,
i 01 A. Exclusion of lime in compulation of period of limitation in certain
eases,
PART VIII
PENALTIES.
102. Undischarged insolvent obtaining credit. .
103. Punishment of insolvent for certain offences. 103A.
Disqualifications of insolvent.
104. Procedure on charge under section 103.
[05. Criminal liability after discharge or composition.
PART IX
SMALL INSOLVENCIES.
106. Summary administration in small cases.
PART X
SPECIAL PROVISIONS.
Exemption of corporation, etc., from insolvency proceedings.
Administration in insolvency of estate of person dying insolvent.
Vesting of estate and mode of administration. Payments or transfer by legal
representatives.
Saving of jurisdiction of Administrator-General.
107. PART XI
R ULES.
108.
Rules.
Power of State Government to make rules.
109.
Sanction to rules.
107.
Publication of rules.
111.
112.
112
A.
113.
114.
[Act m of 1909.]
PART xn
SUPPLEMENTAL.
SECTION.
] 15. Exemption from duty of transfers, clc., under this Acl.
116. The Gazelle lo be evidence.
117. Swearing of affidavits.
118. Formal defect not to invalidate proceedings.
119- Application of Trustee Act to insolvency of trustee. [20. Certain
provisions to bind the Government,
121. Saving for existing rights of audience.
122. Lapse and credit to Government of unclaimed dividends.
123. Claims to monies crcdiled to Government under section 122,
124. Acccss to involvent's books.
125. Fees and percentages.
126. Couns to be auxiliary to each other.
127. Saving.
THE FIRST SCHEDULE. — M EETINGS OF CREDITORS. THE SECOND SCHEDULE.
— PROOF OF DEBTS.
THE THIRD SCHEDULE. — [Repealed.]
Act III of 1909.
(The Presidency-Towns Insolvency Act, 1909.)'
Act XI of 1920.
Act IX of 1926. Act
XXXIV of 1926. Acl
XI of 1927.
AMENDED .................................... Aci XIX of 1927.
Act III of 1929.
Acl X of 1930.
Ac I III of 1950.
Act LVin of 1960. Ben. Act
XVIH of 1936. Acl 28 of
1978.
REPEALED IN PART Act X of 1914.
(a) T
he Government of India
(Adaptation of Indian
Laws) Order, 1937.
(b) The Government of
India (Adaptation of
Indian Laws) Supple
mcntary Order, 1937.
ADAPTED ............ ... ... (c) The Indian Indepen
dence (Adaptation of Central Acts and Ordinances) Order, 1948. (<J)
The Adaptation of
Laws Order, 1950. (e)
The Adaptation of Laws (No.
2) Order, 1956.
[12th March, 1909.]
1
An Act to amend the Law of hi solvency in the P reside ncy- Iowhs * *
*•
WHEREAS it is expedient to amend the law relating to insolvency in the
Prcsidency-towns3 ' ' "; it is hereby cnactcd as follows:—
PRELIMINARY.
1. (7) This Act may be called the Presidency-towns Insolvency Act,
1909.
(2) It shall come into force on the first day of January, 1910.
2. In this Acl, unless there is anything repugnant in the subject or
Shon tide
context,— and coin- m
(A) "creditor" includes a dccree-holdcr; en cement.
l b ) "debt" includes a judgment-debt, and "debtor" includes a judgment- Definitions,
debtor;
' For S lawmen I of Objects and Reason, see [he Gazette of India. 1908. P I. V. page 275; for
Repon of Select Comminc, see ibid.. 1909, Pi, V, page 3: and for Proceedings in Council, see ibid..
1908, Pi. VI pages 41 and 182, and ibid, 1909, P L VI, pages 12 and
22.
The Acl has been amended in Bombay by Bom. Acis 20 or 1933 and 15 of 1939; and in
Madras by Mod. Act 5 of 1943.
J
The words "and the [own or Rangoon" were o mined by para. 3 and ihc First Schedule of the
Cove mine lit of India (Adaptation of Indian Laws) Order. 1937.
5
The words "(owns of Rangoon and Karachi" were first sutjslilulcd for [he words "Town of
Ragoon" by s. 2 of ihc Insolvency (Amendment) Act, 1926 (IX of 1926) and [hereafter the woids
"towns of were substituted for the words "[own of Rangoon and" by para. 3 anil Ihc First Schedule to
(he Govern merit of India (Adaptation of Indian Laws) Order, 1937. Then again the words "and (he
town of Karachi" were omiued, by para. 3 and [he Firs! Schedule lo the Indian Independence
(Adaptation of Central Acts and Ordinance si. Order. 1948.
(Preliminary.—Part 1.—Constitution and powers of Court.— Sections 3—5.)
(c) [Act in assignee" includes an acting official assignee "[and a deputy
"official
official assignee, whether permanent or acting];
(idJ "prescribed" means prescribed by rules;
(e) "properly" includes any properly over which or the profits of which
any person has a disposing power which he may exercise for his
own benefit;
(/) "rules" means rules made under this Act;
( g ) "secured creditor" includes a landlord who under any enactment for
the time being in force has a charge on land for the rent of lhal
land;
(/i) "the Court" means the Court exercising jurisdiction under this
Aci;D""*
(0 "transfer of properLy" includes a transfer of any interest
therein and any charge crcaled thereon;
"[(/) "Slates" means all the territories, *(which, immediately before the
1st November, 1956, were comprised) within Part A Stales and
Part C States.]
PART I
CONST mm ON AND COWERS OF COURT.
Jurisdiction.
3. The Courts having jurisdiction in insolvency under this Act shall be
'[the High Courts at Calcutta, Madras and Bombay],
4. All matters in rcspcct of which jurisdiction is given by this Act shall

be ordinarily transacted and disposed of by or under the direction of one of the
Judges of the Court, and the Chief Justice7* * * shall, from lime to lime, assign a
Judge for that purpose.
5. Subject lo the provisions of this Act and or rules, the
Conns having
jurisdiction in
Judge of a Court exorcising jurisdiction in insolvency may
insolvency. exercise in chambers the whole or any part or his jurisdiction.
Jurisdiciion LO
'Clauses and (bbb), which were inserted by s, 3 of the Insolvency
be exercised
(Amend- mcm) Acl, 1926 (IX or 1926), were omiiied by pan. 3 and Ihe First
by a single Schedule <□ the Indian Independence {Adaptation of Ccnlrci] Acts and
Judge. Ordinances) Order, 1 fM8
Exercise or 'Added by s. 2 or the insolvency Lnw (Amendment) Acl, 1930 (X of
1930). JTtic word "and" was omiued by s. 3 and the Second Schedule or the
jurisdiction in
Repealing and Amending Acl, I960 (LVI11 of I960).
chambers.
'Clause (j) was inserted by para. 3 and the First Schedule of ihe
Adaptation or Laws Order, 1950,
1
Substituted for (he words 'Tor the lime being comprised" by pant. 3 and the Schedule of ihe
Adaptation of Laws (No. 2) Order, 1956.
'Substituted by para. 3 and the First Schedule of the Indian Independence (Adaptation of
Central Acis and Ordinances) Order, 1948, as amended by s. 4 of the Insolvency (Amendment) Acl.
1926 (IX of 1926) and para. 3 and ihe First Schedule of the Government of India (Adapiaiion of Indian
Laws) Order, 1937,
'The words "Judicial Commissioner" were frrsJ subslitutcd for the words "Chief Judge" in ss.
4 and 6 (/) by ss. 5 and 6, respectively, of ihe Insolvency (Amendment) Ad, 1926 (IX of 1926).
Thereafter the words "or Judicial Commissioner" were omitted by para. 3 and the First Schedule of ihe
Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.
(Parr I.—Constitution and Powers of Court—Sections 6—8.)
6. of The Chief Justice1"" "may, from time to time, direct thai, in any
(/) 1909.]
mauers in Thercspccl of which jurisdiction
Presidency-towns is given
Insolvency Act, to the Court by (his 583
1909. Act, an
officcr of (he Court appointed by him in this behalf shall have all or any of the
powers in this section mentioned; and any order made or act done by such officcr
in the exercisc of the said powers shall be deemed the order or act of the Court.
(2) The powers referred to in sub-section (/) arc the following, namely:—
(a) to hear insolvency petitions presented by debtors, and to make Delegation
orders of adjudication thereon; or powers 10
officers of
(ib) to hold the public examination of insolvents;
Court,
(c) to make any order or exercise any jurisdiction which is prescribed
as proper to be mode or exerciscd in chambers;
(d) to hear and determine any unopposed or ex parte application;
(e) to examine any person summoned by Ihc Court under section 36.
(J) An officer appointed under this section shall not have
power to commit far contempt of Court.
7. Subject to the provisions of this Act, the Court shall have full
power to decide all questions or priorities, and all other questions whatsoever,
whether of law or fact, which may arise in any case of insolvency coming within
the cognizancc of the Court, or which the Court may deem it expedient or
necessary to decide for the purpose of doing complete justice or making a
complete distribution of property in any such case :
- Provided that, unless all the parties otherwise agree, the power hereby
given shall, for the purpose of deciding any matter arising under section 36, be
Powers of
exerciscd only in the manner and to the extent provided in that section.
Court to dccide
Appeals.
all questions
S. (7) The Court may review, rescind or vary any order made by it under arising in
its insolvency jurisdiction. insolvency.
(2) Orders in insolvency matters shall, at the instance of any person
aggrieved, be subject to appeal as follows, namely;—
{a) an appeal from an order made by an officer of the Court empowered
under section 6 shall lie to the Judge assigned under section 4 for
the transaction and disposal of matters in insolvency and no further
appeal shall lie except by leave of such Judge; ■
(b) save as otherwise provided in clause(a), an appeal from an order
made by a Judge in the exercise of the jurisdiction conferred by
Appeals in
this Act shall lie in the same way and be subjcct to the same
insolvency.
provisions as an appeal
'The words "Judicial Commissioner" were firsl substituted for Ihc words "Chief Judge" in ss.
4 and 6(/) by ss. 5 and 6, respectively, of the Insolvency (Amend men I) Act. 1926 (IX of 1926).
Thereafter the words "or Judicial Commissioner'' were omitted by para. 3 and the First Schedule of the
Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948,
:
Added by s. 2 of ihc Presidency-[owns Insolvency (Amendment) Act, 1927 (XIX of 1927).
[Act in
(Par! I!.—Proceedings from acl of Insolvency 10 Discharge,—

Section 9.)
from an order made by a Judge in the exercise or (he ordinary original civii
jurisdiction of Lhe Court.
PART II
PROCEEDINGS PROM ACT OF INSOLVENCY TO DISCHARGI:.
Acts of insolvency.
Ac,s of
9. '(7) A debtor commits an aci of insolvency in each of the
insolvency. r ,, .
following eases, namely:—
(«) if, in 1 [the States] or elsewhere, he makes a transfer of all of
substantially all his property lo a third person for the benefit of his
creditors generally;
(f>) if, 5 [the Slates] or elsewhere, he makes a transfer of his properly or
of any pari thereof with intent to defeat or deJay his creditors;
(c) if, - [the Slates] or eisewhere, he makes any transfer of his property
or of any pari thereof, which would, under this or any other
enactment for the time being in force, be void as a fradulent
preference if he were adjudged an insolvent;
(id) if, with intent to defeat or delay his creditors,—
CO he departs or remains out of - [the States], (i"0 he departs from
his dwelling-house or usual place of
business or otherwise absents himself,
{Hi) he secludes himself so as lo deprive his creditors of the means of communicating with him;
(e) if any of his property has been sold or attached for a period of not
less than twenty-one days in execution of the decree of any Court for the
payment of money; (/) if he petitions lo be adjudged an insolvent;
if he gives noiice to any of his creditors that he has suspended, or
that he is about to suspend, payment of his debls;
(/i) if he is imprisoned in execution of the decree of any Court for the
payment of money.
1
Section 9 was renumbered as sub-sec lion {/) of that section by s. 2(a) of [he Insolvency
Laws (A men dm cm) Act. 1973 (Acl XXVI11 of 1978) which was thereafter repealed by s. 2 and Sch,
1 or ihe Repealing and Amending Acl, I9S8 {Act XIX of 1988).
:
TJic words "lhe Provinces" were first subsliluied for ihe words "British India" by para. 3 (2)
of the Indiw Independence (Adaptation^ Central Acls and Ordinances) Order. 1948, Thereafter ihe
word "States" was substituted for ihe word "Provincus" by pain. A (!) of (he Adaptation of Laws Order,
1950.
'Sub-sections (2), (J), (J) and (J) wen; inserted by s. 2 (o) of the Insolvency Laws (Amendment) Acl, 197S (Acl XXVIII of
1978) which were thereafter repeated by s. 2. Sell.I of ihc Repealing and Amending Act, 1988 (Act XIX of 1988).
Cmli: -II
of 1909.]
(Part 11— Proceedings from act of Insolvency to Discharge-

Section 9.)
1
(2) Without prejudice to [he provisions of sub-section (7), a debtor commits an act of insolvency
if a creditor, who has obtained a decree or order against him for the payment of money (being a decree or
order which has bccomc final and the execution whereof has not been stayed), has served on him a notice
(hereafter in this section referred to as the insolvency notice) as provided in sub-section (J) and the debtor
docs not comply with thai notice within the period specified (herein:
Provided that where a debtor makes an application under subsection (5) for setting aside an
insolvency notice—
(a) in a case where such application is allowed by the Court, he shall not he deemed to have
committed an act of insolvency under Ihis sub-section; and
(b) in a case where such application is rejected by the Court, he shall be deemed to have
committed an act of insolvency under this sub-section on Ihe date of rejection of the
application or the expiry of the period specified in the insolvency notice for its compliance,
whichever is later:
Provided further thai no insolvency notice shall be served on a debtor residing, whether
permanently or temporarily, outside India, unless the creditor obtains the leave of the Court therefor.
'(.?) An insolvency notice under sub-section (2) shall—
(a) be in the prescribed form;
(b) be served in the prescribed manner;
(c) specify the amount due under the decree or order and require the debtor to pay the
same or to furnish security for the payment of such amount to the satisfaction of the
creditor or his agent;
(cl) specify for its compliance a period of not less than one month after iLs service on the
debtor or, iT it is to be served on a debtor residing, whether permanently or
temporarily, outside India, such period (being not less than one month) as may be
specified by the order of the Courl granting leave for the service of such noLice;
(e) stale ihe consequences of non-compliance with the notice.
\4) No insolvency notice shall be deemed to be invalid by reason only that the sum specified
therein as the amount due under the decree or order exceeds the amount actually due, unless the debtor,
within the period specified in the insolvency notice for its compliancc, gives notice to the creditor thai the
sum specified in the insolvency notice does not coneclly represent the amount due under the decree or
order:
Provided that if ihe debtor does not give any such notice as aforesaid, he shall be deemed to have
complied with the insolvency
[Act III
(Pari I!.—Proceedings from act of Insolvency so Discharge- Section 10.)

notice if, wilhin ihe period specified therein for its compliance, he lakes such
steps as would have constituted a compliance with the insolvency notice had the
actual due been correctly specified therein,
"(5) Any person served wilh an insolvency noticc may, within the period
specified therein for its compliance, apply to the Court to set aside the
insolvency notice on any of the following ground, namely;—
(а) that he has a counter-claim or set off against the creditor which is
equal to or is in excess of the amount due under the decree or
order and which he could not, under any law for the time being in
forcc, prefer in the suit or proceeding in which the decree or order
was passed;
(б) that he is entitled to have the dccrce or order sel aside under any
law providing for the relief of indebtedness and That—
(0 he has made an application before the competent authority
under such law for the setting aside of the decree or order; or
(I'O the lime allowed for the making of such application has not
expired;
( c ) that the decree or order is not executable under the provisions of
any law referred to in clause (b) on the the dale of the application.
Explanation - For the purposes of this section, the act of an agent may be
ihe act of the principal, even ihough the agent have no specific authority lo
commit the act.
Order of adjudication.
p0Vl,cr t 0 10. Subject to the conditions specified in this Acl, if a debtor
odjudicaic. commits an act of insolvency, an insolvency petition may be present
ed either by a creditor or by ihe debtor, and the Court may on such petition make
an order (hereinafter called an order of adjudication) adjudging him an insolvent.
Explanation.-Tbe presentation of a petition by the debtor shall be

deemed an act of insolvency within the meaning of this section, and on such
petition the Court may make an order of adjudication.
'See foot-note 1 on page 585. ante.

(Part II— Proceedings from act of Insolvency to Discharge- Sections 11—13.)
11. The Court shallof 1909.]
IIOL have jurisdiction lo make an order of adjudication, unless
(n) ihe debtor is,Theat Presidency-towns Insolvency Act,
the time of the presentation 1909.
of the 587imprisoned in
insolvency petition,
cxccution of ihe decrcc of a Court for the payment of money in any prison to which debtors
arc ordinarilycommilted by the Court in the exercise of its ordinary original jurisdiction; or
(h) the debtor, within a year before the dale of the presentation of the insolvency petition, has
ordinarily resided or had a dwelling-house or has carried on business either in
person or through an agent wilhin the limits of ihe ordinary original civil Restrictions
jurisdiction of the Courl; or on juris-
diction.
(c) the debtor personally works for gain within those limiLs; or
( d ) in the ease of a petition by or against a firm of debtors the firm has carried on business
wilhin a year before ihe date of the presentation of the insolvency petition wilhin those
limits.
12. (/) A creditor shall nol be entitled to present an insolvency petition against a debtor unless
( a ) the debt owing by ihe debtor to the creditor, or, if two or more creditors join in the petition,
the aggregate amount of debts owing lo such creditors, amounts to five hundred rupees,
and
(ib) the debt is a liquidated sum payable, either immediately or at some certain future lime, and
(c) the acl of insolvency on which ihe petition is grounded has occurred wilhin three months
before the presentation of the petition:
'Provided that where the said period of three months referred to in clause (c) expires on a day
when the Court is closed, ihc insolvency petition may be presented on ihe day on which ihe Court re-
opens.
(2) If ihc petitioning creditor is a securcd creditor, he shall in his petition cither slate
thai he is willing to relinquish his security for the benefit of the creditors in the event of the Conditions
debtor being adjudged insolvent or give an estimate of the value of the security. In the lauer on which
case he may be admitted as a petitioning creditor to the extent of the balance of the debt due to creditor may
pctition.
him after deducting the value so estimated in the same way as if he were an unsecured
creditor.
13. (1) A creditor's petition shall be verified by affidavit of the creditor, or of some Procce dings
and order on
person on his behalf having knowledge of the facts.
creditor's
pctilion.
'Aildtsd by s. 2 of the Insolvency Law (Amendment) Acl, 1950 (III of 1950).

588 The Presidency-lawns Insolvency Act, J909.
[Act III
(Pan II.-Proceedings from act of Insolvency to Discharge.- Section 14.)

(2) Al ihe hearing the Court shall require proof of—
( a ) ihe debt of ihe petitioning creditor, and
( b ) the act of insolvency, or, if more than one act of insolvency is alleged in the petition, some
one of the alleged acts of insolvency.
(J) The Courl may adjourn the hearing of the petition and order service ihercor on the debtor.
(4) The Court shall dismiss the peLilion—
(a) if it is not satisfied with the proof of the facts referred to in sub-section (2); or
(fc) if the debtor appears and satisfies the Court that he is able (o pay his debts, or that he has not
committed an act of insolvency or that for other sufficient cause no order ought to be made.
(5) The Court may make an order of adjudication if it is satisfied with the proof above referred
to, or if on a hearing adjourned under sub-section (J) the debtor does not appear and scrvicc of the
petition on him is proved, unless in its opinion ihe petition ought to have been presented before some
other Courl having insolvency jurisdiction.
(d) Where Lhe debtor appears on the petition and denies that he is indebted to the petitioner, or
that he is indebted lo such an amount as would justify the petitioner in presenting a petition against him,
the Courl, on such security (if any) being given as the Court may require for payment to the petitioner of
any debt which may be established against [he debtor in due course of law, and of the costs of
establishing the debt, may, instead of dismissing the petition, slay all proceedings on the petition Tor
such lime as may be required for trial of the question relating lo the debt.
(7) Where proceedings are stayed, the Court may, if by reason of the delay caused by ihe slay of
proceedings or for any other cause it thinks just, make an order of adjudication on the petition of some
other creditor, and shall thereupon dismiss, on such terms as il thinks just, Ihe petition on which
proceedings have been stayed as aforesaid.
(5) A creditor's peLilion shall not, after presentation, be withdrawn without the leave of lhe Court.
14. 1 [(/)] A debtor shall not be entitled to present an insolvency petition unless
(a) his debts amount' lo five hundred rupees, or
(b) he has been arrested and imprisoned in execution of the decree of any Court Tor the
payment of money, or
(c) an order of attachment in execution of such a decree has been made and is subsisting
against his properly.
'The original section 14 was re-numbcrcd as sub-scction (7) of Ihal seel ion by s. 2 of the Insolvency (Amendmeni) Acl. [927
(XI of 1927).
of 1909.]
(Part li—Proceedings from act of Insolvency to Discharge- Sections 15-17.)

1
[(2)] A debtor in respeel of whom an order of adjudication, v of 1920.
whether made under this Act or under the Provincial Insolvency Acl, 1920, has
been annulled owing to his failure to apply or Lo prosecute an application for his
discharge shall not be entitled lo present an insolvency petition without the leave
of ihe Court by which the order of adjudication was annulled. Such Court shall
nol grant leave unless it is satisfied either that ihe debtor was prevented by any
reasonable causc from presenting or prosecuting his application, as the case may
be, or that the petition is founded on facts substantially diFfcrenL from those
contained in the petition on which the order of adjudication was made.
15. (1) A debtor's petition shall allege that ihe debtor is unable lo pay
his debts, and, if the debtor proves that he is entitled to present the petition, the
Court may thereupon make an order adjudication, unless in its opinion ought to
have been presented before some other Court having insolvency
jurisdiction. Proceed trigs
(2) A debtor's petition shall not, after presentation, be withdrawn and order on
debtor's
without the leave of the Court.
3 petition.
[{•?)] On the making or ihc order admiuing his petition, a debtor
shall—
( a ) unless ihe Court otherwise directs, producc all his books of
account, and
( b ) file such lisls of creditors and debtors and afford such assistance to
ihe Courl as may be prescribed,
failing which the Court may dismiss his petition.
16. The Courl may, if it is shown lo be necessary for the protection of
the estate, at any time after the presentation of an insolvency pctilion and before
an order of adjudication is made, appoint the official assignee to be interim
receiver of ihe property of the debtor, or of any part thereof, and direct him
ID take immediate possession thereof or ar.y part thereof, and the official Discretion-
assignee shall thereupon have such of ihe powers conferablc on a receiver ary powers
as (o ap-
appointed
pointment of
v of 1908. under the Code of Cjvil Procedure, 1908, as may be prescribed. interim
17. On the making of an order of adjudication, ihe property of the receiver.
insolvent wherever situate shall vest in ihe official assignee and shall
bccome divisible among his crcdilors, and thereafter, except as directed by
this Act, no creditor to whom the insolvent is indebted in rcspcct of any
debt provable in insolvency shall, during the pcndcncy of the insolvency Effcct or
order of
proceedings, have any remedy against the property of the insolvent trt adjudication.
respeel of ihe debt or shall commence any suil or other legal proceeding
except with the leave of ihe Court and on such terms as the Courl may impose:
'Added by s. 2 of ihc Insolvency (Amendment) Acl, 1927 [XI or 1927), - Added by s. 3 of the
Presidency-towns Insolvency (Amendment) Act. 1927 (XIX of 1927).
[Act in
(Part II.—Proceedings from acl of Insolvency to Discharge.- Sections 18-19.)

Provided that this section shall nol affect lhe power of any secured creditor to
realize or otherwise deal with his security in lhe same manner as he would have been
entitled lo realize or deal wiih il if ihis section had not been passed.
18. (7) The Court may, at any time after the making of an order of adjudication,
stay any suii or other proceeding pending against the insolvent before any Judge or Judges
of the Court or in any other Court subject lo lhe superintendence of the Court,
Stay of (2) An order made under sub-section (/) may be served by sending a copy
proceedings,
thereof, under lhe seal or lhe Court, by post to the address for service of the
plaintiff or olher party prosecuting such suit or proceeding, and notice of such
order shall be scnL to the Court before which Lhe suit or proceeding is pending.
(.3) Any Court in which proceedings are pending against a debtor may, on proof
(hat an order of adjudication has been made against him under this Acl, either slay the
proceedings or allow them to continue on such terms as it may think jusl.
1
18A. (7) The Court may, at any time after the presentation of an insolvency petition,
stay any insolvency proceedings pending against the debtor in any Court subject lo the
superintendence of lhe Court, and may, ai any time after lhe making of an order or adjudi-
cation, annul an adjudication against the debtor made by any such Court.
(2) Where an adjudication is annulled under sub-section (/), all sales and
dispositions of property and payments duly made and all acts done by the Court
Control over whose order is annulled, or by the rcccivcr appointed by it or other persons acting
insolvency
under his authority, shall be valid, but the properly vested in such Court or receiver
proceedings
in subordi-
shall vest in the official assignee, and the Courl may make such direction in regard
nate Courts. to the custody of such properly as it ihinks fit.
(J) Notice of the order annulling an adjudication under subsection (7) shall
be published in the 1 [Official Gazette] and in such other manner as may be
Power to ap- prescribed.
point special
19. (7) If in any case lhe Courl, having regard to the nature of the
manager.
debtor's estate or business or to the interests of the creditors generally, is of
opinion that a special manager of the estate or business ought to be appointed to assist the
official assignee, the Court may appoint a manager thereof accordingly lo act for such time
as the Court may authorize, and lo have such powers of the official assignee as may be
entrusted lo him by lhe official assignee or as the Court may direct.
(2) The special manager shall give security and furnish accounts in such manner as
the Court may direct, and shall receive such remuneration as the Court may determine.
'Ins. b>'s. 3 of the Insolvency Law (Amendment) Act. 1930 (X of 1930). 'Substituted for the words "(ecal
official Gaicttc" by para. A {!) of the Government of India (Adaptation of Indian Laws) Order, 1937.
of 1909.]
The Presidency-lawns Insolvency Act, 1909. 591
(Part II.-Proceedings from act of Insolvency to Discharge. - Sections 20-23.)

20. Notice of every order of adjudication, slating the name, address and description
of the insolvent, the dale of the adjudication, the Court by which ihc adjudication Advertise-
is made and the date of presentation of the pctilion, shall be published1 * * * in ment of .
the 2 [Official Gazette] and in such other manner as may be prescribed. order of ad-
Annulment of Adjudication. judication,
21. (/) Where, in the opinion of the Court, a debtor ought not lo have
been adjudged insolvent, or where it is proved to Ihc salisfac- lion of Ihe Court
that the debts of the insolvent are paid in full *[thc Court shall, on the application
of any person interested,] by order annul the adjudication J[and the Court may, of Power far
its own motion or on application made by ihc official assignee or any creditor, Court lo
annul any adjudication made on the petition of a debtor who was, by reason of annul adju-
the provisions of sub-scciion (2) of section 14, nol entitled to present such dication in
certain cases.
petition.]
(2) For the purposes of this section, any debt disputed by a debtor shall be
considered as paid in full, if the debtor enters into a bond, in such sum and wilh such sureties
as the Courl approves, to pay the amount to be recovered in any proceeding for Ihc recovery
of or conccrning Ihc debt, wilh costs, and any debt due to a creditor who cannot be found or
cannot be identified shall be considered as paid in full if paid into Court.
22. Where it is proved to the satisfaction of ihe Court that insolvency proceedings
arc pending in any other J [Court in India] whether wilhin or without 6 [the Stales] against
the same debtor and that the property of the debtor can be more conveniently distributed by
such other Court, the Courl may annul the adjudication or may stay ail proceedings thereon.
23. (J) Where an adjudication is annulled, all sales and dispositions of property and
payments duly made, and all acts theretofore done, by ihe official assignee or other person
acting under his authority, or by ihe Court, shall be valid, but the property of the
debtor who was adjudged insolvent shall vest in such person as the Court may Cone unci) J
appoint, or, in default of any such appoinlment, shall revert lo the debtor to ihe proceedings in
extent of his right or interest therein on such lerms and subject lo such conditions Courts in India.
(if any) as the Court may declare by order.
Proceedings on
'The words "in Ihc Gaze lie of India and" were omitted by para. 3 and the First Schedule of the annulment.
Government of India (Adaptation of Indian Laws) Order, 1937. ''Sec fool-note 2 on page 590. ante.
'Subs, by s. 3 of Ihc Insolvency Law (Amendment) Acl. 1950 (III of 1950), s. 3, for Ihe words 'Ihe Court
may. on Ihe application of any person interested.". 'Added by s. 3 of Ihc Insolvency (Amendment) Acl, 1927 (XI of
1927). 'Substituted for the words "British Coun" by para, 3 and the First Schedule of the Adaptation of Laws Order,
1950,
*Sec fool-note 2 on page 584-. ani e.
[Act in
(Part II— Proceedings from act of Insolvency to Discharge- Sections 24, 25.)
(2) Where a debtor has been released from custody under lhe provisions of Ihis Acl
and the order or adjudication is annulled as aforesaid,.the Court may, if it ihinks fil,
recommit the debtor lo his former custody, and lhe jailor or keeper of the prison to whose
custody such debtor is so recommitted shall receive such debtor into his custody according
to such recommitment, and thereupon all processes which were in forcc against the person
of such debtor al lhe time of such release as aforesaid shall be deemed lo be siill in forcc
againsl him as if such order had not been made.
(J) Noticc of the order annulling an adjudication shall be published 1 * * * in Lhe -
[Official Gazette] and in such oibcr manner as may be prescribed.
Proceedings consequent on order of adjudication.
24. (!) Where an order of adjudicalion is made against a debtor, he shall prepare
and submit to lhe Courl a schedule verified by affidavit, in such form and containing such
particulars of and in relation to his affairs as may be prescribed.
(2) The schedule shall be so submitted within the following Limes, namely:—
( a ) if the order is made on lhe petition of the debtor, within thirty days from
Insolvent's the date of lhe order,
schedule.
( b ) if the order is made on the petition of a creditor, within thirty days from
the dale of service of Lhe order. .
(5) If lhe insolvent fails, without reasonable excuse, lo comply with the
requirements of this section, the Court may, on the application of the official assignee or of
any creditor, make an order for his commilal to the civil prison.
(4) If the insolvent fails lo prepare and submit any such schedule as aforesaid, the
official assignee may, al the expense of lhe estate, cause such a schedule to be prepared in
manner prescribed.
25, (/) Any insolvent who shall have submitted his schedule as aforesaid may apply
to the Court for protection, and the Court may, on such application, make an order for the
protection of the insolvent from arrest or detention.
(2) A protection order may apply eilher to all the debts mentioned in the schedule or
lo any of ihem as the Court may Ihink proper, and may commence and take effect al and for
such lime as the Court may dircct, and may be revoked or renewed as the Court may think
fit,
(j) A protection order shall protect the insolvent from being arrested or
Protection
detained in prison for any debt to which such order shall apply, and any insolvent
order.
arrested or detained contrary to the terms of such order shall be entiLled Lo his
release:
'See fool-note 1 on page 591, ante. : See fool-nolc 2 on
page 590. time.
of 3909.]
f Part II.—Proceedings from act of Insolvency to Discharge.—

Sections 26, 27.)
Provided thai no such order shall operate to prejudice the right of any
creditor in Ihe cvenl of such order being revoked or the adjudication annulled.
(■/) Any creditor shal] be cniiiled lo appear and oppose ihc granl of a
prolcction order, bui the insolvent shall be prima facie entitled to such order on
production of a ccrlificalc signed by ihc official assignee that he has so far
conformed lo the provisions of this Act,
(J) The Courl may make a protection order before an insolvent has
submiLLed his schedule if it thinks il necessary to do so in the interests of the
creditors.
26. (/) At any lime after the making of an order of adjudication Meetings of against an
insolvent, the Court, on ihe application of a creditor or of creditors, the official assignee, may
direct thai a meeting of creditors shall be
held to consider the circumstances of the insolvency and the insolvent's schedule
and his explanation thereof and generally as to the mode of dealing wilh the
properly of the insolvent.
(2) With respect to the summoning of and proceedings at a meeting of
creditors Ihe rules in the First Schedule shall be observed.
27. (7) Where ihe Courl makes an order of adjudication it shall Public examination hold a public
silling on a day to be appointed by the Court, of which lhc insolvem- noticc shall be given lo creditors in the
prescribed manner, for ihe
examination of the insolvent, and the insolvent shall attend thereat,
and shall be examined as to his conduct, dealings and property.
(2) The examination shall be held as soon as conveniently may be after
the expiration of the time for the filing of the insolvent's schedule,
(J) Any creditor who has tendered a proof or a legal practitioner on his
behalf may question the insolvent concerning his affairs and the causes of his failure.
( 4 ) The official assignee shall take part in the examination of the
insolvent; and for the purpose thereof, subject to such directions as the Courl
may give, may be represented by a legal practitioner.
( 5 ) The Courl may put such questions to the insolvent as it may think
expedient.
( 6 ) The insolvent shall be examined upon oath, and il shall be his duty
to answer all such questions as the Court may put or allow to be put to him. Such
notes of the examination as the Court thinks proper shall be taken down in
writing and shall be read over either lo or by the insolvent and signed by him,
and may thereafter be used in cvidcncc against him and shall be open to the
inspection of any creditor at all reasonable times.
[Act in
(Pari II—Proceedings from act of Insolvency to Discharge.— Sections 28, 29.)
( 7 ) When the Court is oT opinion that (he affairs of the insolvent have been sufficiently
investigated, it shall, by order, declare that his examination is concluded, bui such order shall not preclude
lhe Court from directing further examination of the insolvent it may deem fit to do so.
( 8 ) Where the insolvent is a lunatic or suffers from any such mental or physical affliction or
disability as in the opinion of the Court makes him unfit lo attend his public examination, or is a woman
who according to the customs and manners of lhe country ought not to be compelled to appear in public,
the Court may make an order dispensing with such examination, or directing lhal lhe insolvent be
examined on such terms, in such manner and at such place as lo the Court seems expedient.
Composition at id schemes of arrangement.
28. (I) An insolvent may at any lime after lhe making of an order of adjudication submit a
proposal for a composition in satisfaction of his debts or a proposal for a scheme of arrangement of his
affairs in the prescribed form, and such proposal shall be submitted by the official assignee lo a meeting of
creditors.
( 2 ) The official assignee shall send to cach creditor who is mentioned in the schedule, or who
has tendered a proof before the meeting, a copy of lhe insolvent's proposals with a report thereon, and if
on the consideration of such proposal the majority in number and three-fourths in value of all lhe creditors
whose debts are proved resolve to accept the proposal, lhe same shall be deemed lo be duly acceptcd by
Submission
or proposal
the creditors.
and acccp- ( 3 ) The insolvent may al ihe meeting amend the terms of his proposal if the amendment is in the
lancc by opinion of the official assignee calculated to benefit lhe general body of creditors.
creditors.
( 4 ) Any creditor who has proved his debt may assent to or dissent from the proposal by a letter,
in the prescribed form, addressed to the official assignee so as to be received by him not later than the day
preceding the meeting, and any such assent or dissent shall have effect as if the creditor had been present
and had voted at the meeting.
29. (/) The insolvent or the official assignee may after ihe proposal is acccplcd by the creditors
apply to the Court to approve it, and notice of the time appointed for hearing the application shall be given
to each creditor who has proved.
(2) Except where an estate is being summarily administered or spccial leave of the Court has been
obtained, the application shall not be heard until after ihe conclusion of ihe public examination of the
insolvent. Any creditor who has proved may be heard by Lhe Court in opposition lo the application
notwithstanding Lhal he may at a meeting of creditor have voted for ihe acceptance of lhe proposal.
Approval of
proposal by
Coun.
The P res id cricy-tawns Insolvency Act, 1909. 595
of 1909.]
(Part II.—Proceedings from act of Insolvency to Discharge- Sections 30, 31.)
(3) The Court shall, before approving Ihe proposal, hear a report of ihc official assignee as to the
terms thereof and as lo the conduct of the insolvent and any objections which may be made by or on
behalf of any creditor.
{4) Where the Court is of opinion that the terms of ihe proposal arc not reasonable or are not
calculated to benefit the general body of creditors or in any case in which the Court is required lo refuse
the insolvent's discharge, Lhe Courl shall refuse to approve the proposal.
(5) Where any facts are proved on proof of which lhe Courl would be required either to refuse,
suspend or attach conditions lo lhe debtors' discharge, the Court shall refuse to approve the proposal
unless it provides reasonable security for payment of noi less than four annas in the rupee on all the
unsecured debts provable against the debtor's estate.
(6) No composition or scheme shall be approved by lhe Court which docs not provide for the
payment in priority lo other debts of all dcbls directed to be so paid in the distribution of the property of
an insolvent.
(7) In any other case lhe Court may either approve or refuse lo approve the proposal.
30. (I) If the Court approves the proposal, the terms shall be embodied in an order of the Courl,
and an order shall be made annulling ihc adjudication, and the provisions of section 23, sub-section (1)
and (J), shall thereupon apply, and lhe composition or scheme shall be binding on all the creditors so far
as relates lo any debt due lo Ihem from the insolvent and provable in insolvency.
(2) The provisions of fhe composition or scheme may be enforced by the Court on application by
any person interested, and any disobedience of an order of the Court made on lhe application shall be
deemed a contempt of Court.
31. [I) If default is made in the payment of any instalment due in pursuance of any composition
or scheme, approved as aforesaid, or if it appears Lo the Court that ihe composition or
scheme cannot procccd without injuslicc or undue delay or thai the approval of the Order on Court
was obtained by fraud, the Courl may, if it thinks fit, on application by any person approval,
interested, re-adjudge the debtor insolvent and annul the composition or scheme, and the
properly of the debtor shall thereupon vesl in ihc official assignee but without prejudice to the validity of
any transfer or payment duly made or of anything duly done under or in pursuance of lhe composition or
scheme.
(2) Where a debtor is re-adjudged insolvent under sub-section (7), all dcbls provable in other
respects which have been contracted before the dale of such re-adjudication shall be provable in the insol-
vency.
Power IO rc-
adjudgc dcbior
insolvent,
596 The Pre side it cy-to 1171 j Insolvency Act, 1909.
[Act III
f Pari I!.—Proceedings from act of Insolvency to Discharge.— Sections 32—34.)
32. Notwithstanding the acceptance and approval of a composition or scheme, lhe composition or
scheme shall not be binding on any creditor so far as regards a debt or liability from which, under the
provisions of this Acl, lhe insolvent would not be discharged by an order of discharge in insolvency,
Limitation of unless lhe credilor assents to the composition or sheme.
effect or
Control over person and property of insolvent.
composition
33. (/) Every insolvent shall, unless prevented by sickness or other sufficient cause, attend any
or schcmc.
meetings of his creditors which Lhe official assignee may require him 10 attend, and shall submit, lo such
examination and give such information as the meeting may require.
( 2 ) The insolvent shall—
(<i) give such inventory of his property, such list of his creditors and debiors, and of the debts due
Duties of
lo and from them respectively,
insolvent as (b) submit 10 such examinaiion in respeci of his properly or his creditors,
10 discovery (r) wait at such times and places on lhe official assignee or special manager,
and realiza- (d) execute such powers-of-atlorney, transfers and instruments, and
tion of pro-
(e) generally do all such acts and things in relation to his property and the distribution of the
perty-
proceeds amongst his creditors,
as may be required by the official assignee or special manager or may be prescribed or be direclcd by lhe Court
by any special order or orders made in reference lo any particular case, or made on the occasion of any special
application by the official assignee or special manager, or any creditor or person interested.
(3) The insolvent shall aid, io the utmost of his power, in the realisation of his property
and the distribution of the proceeds among his creditors.
(4) If the insolvent wilfully fails to perform lhe duties imposed upon him by this section,
or to deliver up possession to lhe official assignee of any part of his property, which is divisible amongst
his creditors under this Act and which is for the time being in his possession or under his control, he shall,
in addition to any other pun- ishmeni to which he may be subject, be guilty of a contempt of Courl, and
may be punished accordingly.
34. (/) The Court may, either of its own motion or at the instance of the official assignee or of any
creditor, by warrant addressed lo any policc-officcr or prescribed officer of the Court, causc an insolvent lo
be arrested, and committed to ihe civil prison or if in prison lo be deLained until such time as the Court
Arrest of
insolvent.
of 1909.]
(Part 11.—Proceedings from act of Insolvency to Discharge,—

Sections 35, 36.)
may order, under the following circumstances, namely:—
(a) if il appears lo the Court that there is probable reason for
believing lhai he has absconded or is about to abscond with a
view of avoiding examination in respeel of his affairs, or of
otherwise avoiding, delaying or embarrassing proceedings in
insolvency against him; or
(b) if iL appears lo Ihe Courl lhal there is probable reason for
believing that he is about to remove his property with a view of
preventing or delaying possession being laken of il by ihc official
assignee, or thai there is probable reason for believing that he has
concealed or is aboui to conccal or destroy any of his property or
any books, documents or writings which might be of use lo his
creditors in ihe course of his insolvency; or
(c) if he removes any properly in his possession above the value of
fifty rupees without the leave of lhe official assignee.
(2) No payment or composition made or security given after arresi
made under this section shall be exempt from the provisions or this Aci relating
to fraudulent preferences.
35. Where the official assignee has been appointed interim Rcdircc- receiver or an
order of adjudication is made, lhe Court, on lhe appli- lion of cation of the official assignee,
may, from time to time, order thai for lc(lcrs- such time, not exceeding three months, as lhe
Court thinks fit, all post Jettcrs, whether registered or unregistered, parcels and money orders
addressed to the debtor at any place or places mentioned in the order for redirection, shall be
re-direclcd, or delivered by the Postal Authorities in '[the States], to the official assignee, or
otherwise as the Court directs; and the same shall be done accordingly.
36- (/) The Courl may, on Lhe application of the official as- Discovery signce or of
any creditor who has proved his debt, al any lime afler °r ,[|so1' an order of adjudication has
been made, summon before it in such ven[s pro manner as may be prescribed lhe.insolvent or
any person known or suspecLed to have in his possession any property belonging to the
insolvent, or supposed to be indebted to the insolvent, or any person whom the Court may
deem capable of giving information respecting the insolvent, his dealings or property; and
the Court may require any such person in produce any documents in his custody or power
relating to the insolvent, his dealings or property.
(2) If any person so summoned, afler having been tendered a reasonable
sum, refuses lo come before the CourL al the time appointed, or refuses lo
produce any such document, having no lawful impediment made known lo the
Court al the time of its silling and allowed by it, the Court may, by warrant,
causc him Lo be apprehended and brought up for examination.
'See Tool-noie 2 oil page 584, ante.

[Act in
(Part 11.—Proceedings from act of Insolvency to Discharge.— Sections 37, 38.)

(5) The Court may examine any person so brought before ii concerning the insolvent,
his dealings or property, and such person may be represented by a legal practitioner.
(4) 1 [If on his examination any such person admiisj that he is indebted to the
insolvent, lhe Court may, on the application of the official assignee, order him to pay lo lhe
official assignee, at such lime and in such manner as to the Court seems expedient, ihe amount
in which he is indebted, or any pari thereof, either in 1'ulJ discharge of the whole amount or
not, as the Court thinks fil, with or without costs of the examination.
(5) ' [If on his examination any such person admits] that he has in his possession any
property belonging to lhe insolvent, the Court may, on the application of the official assignee,
order him to deliver to liie official assignee lhal property, or any part thereof, at such lime, in
such manner and on such terms as to lhe Court may seem just.
(6) Orders made under sub-scctions (4) and (J) shall be cxc- cuted in lhe same manner
as dccrees for the payment of money or for the delivery of property under lhe Code of Civil
Procedure, 1908, respectively,
(7) Any person making any payment or delivery in pursuance of an order made under
sub-seclion {4) or sub-scction (5) shall by such payment or delivery be discharged from ali
liability whatsoever in respect of such debt or property.
37. The Court shall have the same powers lo issue commissions and letters of request
for lhe examination on commissions or otherwise or any person liable to examinaiion under
section 36 as it has for the examination of witnesses under the Code of Civil Procedure, 1908,
Discharge of Insolvent.
v of
38, (1) An insolvent may, at any time after Ihe order of adjudication, apply lo the
Court for an order of discharge, and lhe Court shall appoint a day for hearing ihe application,
but, save where the public examination of the insolvent has been dispensed with under lhe
provisions of this Act, lhe application shall not be heard until after such examinaiion has been
concluded. The application shall be heard in open Court.
Power to
(2) On the hearing of the application, lhe Court shall lake into
issui; consideration any report of the official assignee as to the insolvent's conduct
commissi and affairs, and, subject lo the provisions of section 39, may—
onS- (a) grant or refuse an absolute order of discharge, or
'Substituted by s. 4 of ihe Presidency-lowis Insolvency (Amendment) Acl. 1927 (XIX of

Dischargc of 1927). for "IT, on the examinaiion of any such person, lhe Coun is satisfied",
insolvent
of 1909.]
(Pari fl—Proceedings from act of Insolvency to Discharge.—

Section 39.)
(b) suspend the operation of the order for a specified time,
or
(c) graiM an order of discharge subject to any conditions with respect
to any earnings or income which may afterwards become due to
the insolvent, or wilh respect lo his after- acquired properly.
39. (I) The Court shall refuse the discharge in all cases where Cases in the insolvent
has committed any offence under this Act, or under which ll,e XLV of sections 421 lo 424 of the Indian Penal
Code, and shall, on proof of REFUSC ^
I860. any of the facts hereinafter mentioned, cither— absolute
( a ) refuse the discharge; or discharge,
( b ) suspend ihc discharge for a specified lime; or
( c ) suspend the discharge until a dividend of not less than four annas
in the rupee has been paid to lhe creditors; or
( d ) require the insolvent as a condition of his discharge to consent to
a decree being passed against him in favour of [he official
assignee for any balance or part of any balance of ihc debts
provable under Lhe insolvency which is not satisfied at the dale
of his discharge; such balance or pari of any balance of the debts
to be paid out of the future earnings or after-acquired property of
the insolvent in such manner and subject to such conditions as lhe
Courl may dirccl; but in that case the decree shall noi be executed
wilhout leave of the Court, which leave may be given on proof
that the insolvent has since his discharge acquired property or
income available for payment of his dcbls.
(2) The facts herinbefore referred lo are—
( a ) that the insolvent's asseLs are not of a value equal to four annas
in lhe rupee on the amount of his unsecured liabilities, unless he
satisfies lhe Court that the fact that lhe assets arc not of such
value has arisen from circumstances for which he cannot justly be
held responsible;
( b ) that lhe insolvent has omiLted lo keep such books of accounl as
arc usual and proper in the business carried on by him and as
sufficiently disclose his business transactions and financial
posiLion wilhin the three years immediately preceding his
insolvency;
( c ) that the insolvent has continued lo trade after knowing ' himself lo
be insolvent;
( d ) lhat the insolvent has contracted any debt provable under ihis Act
without having at lhe time of contracting il any reasonable or
probable ground of expectation (the burden of proving which
shall lie on him) lhat he would be able to pay il;
[Act in
CPart II.—Proceedings from act of Insolvency to Discharge — Sections 40—

42.)
(e) that lhe insolvent has failed to account satisfactorily for any loss of
assets or for any deficiency of assets to meet his liabilities;
(Q thai the insolvenl has brought on or contributed to his insolvency by
rash or hazardous speculations or by unjustifiable extravagance
in living or by gambling, or by culpable neglect of his business
affairs;
(g) lhaL the insolvent has put any of his creditors to unnecessary expense
by a frivolous defence to any suit properly brought against him;
(h) that the insolvenl has wilhin three months preceding lhe time of
presentation of the petition incurred unjustifiable expense by
bringing a frivolous or vexatious suit;
(i) that the insolvent has wilhin three months preceding the date of
the presentation of the petition, when unable to pay his debts as
they become due, given an undue preference to any of his
creditors;
(j) lhal the insolvenl has concealcd or removed his books or his
property or any pan thereof or has been guilty of any other fraud
or fraudulent breach of trust.
(3) The power of suspending and of attaching conditions to an
insolvent's discharge may be exercised concurrently.
(4) On any application for discharge the report of lhe official assignee
shall be prima facie evidence and the Court may presume the correctness of any
statement contained therein.
40. Notice of the appointment by the Court of the day for hearing the
application for discharge shall be published in the prescribed manner and sent
one month al least before the day so appointed to each creditor who has proved,
and lhe Court may hear the official assignee and may also hear any creditor. At
the hearing, the Courl may put such questions lo lhe insolvent
Hearing of and receive such evidence as it may Ihink fit.
application
. 41. If an insolvent does not appear on ihe day so appointed
for
discharge,
for hearing his applications for discharge or if an insolvent
shall not apply to the Court for an order of discharge wilhin
such lime as may be prescribed, the Court, on the application
of the official assignee or of a creditor or of its own motion,
may annul the adjudication or make such other order as it may
Po\ter to annul think fit, and the provisions of section 23 shall apply on such
adjudication nn
annulment.
failure to apply
Tor discharge. 42. (I) Where lhe Courl refuses lhe discharge of lhe
insolvent it may, afler such time and in such circumstances as
Renewal of
may be prescribed, permit him to renew his application.
application and
variation of terms
of order.
The Presidency-towns Insolvency Act, J 909. 601
of 1909.]
(Part II.—Proceedings from act of Insolvency to Discharge.— Sections 43—45.)

( 2 ) Where an order of discharge is made subjcct to conditions and al
any Lime after Lhe expiration of iwo years from the date of Lhe order lhe
insolvent shall satisfy the Court thai ihcre is no reasonable probablily of his
being in a position lo comply wilh the lerms of such order, lhe Court may
modify the terms of order, or of any substituted order, in such manner and upon
such conditions as il may think fit.
43. A discharged insolvent shall, notwithstanding his discharge, give
such assistance as the official assignee may require in lhe realisation and
distribution of such of his property as is vested in the official assignee, and, if
he fails to do so, shall be guilty of a contempt of Court; and the Court may also, Duly of dis-
charged in-
if it thinks fit, revoke his discharge, but without prejudice lo the validity of any
solvent 10
sale, disposition or payment duly made or thing duly done subsequent lo the assist in re-
discharge, but before its revocation, alization of
44. In either of the following cases, that is lo say :— properly.
( 1 ) in the case of a settlement made before and in consideration of
marriage where the settlor is nol at the Lime of making the settlement able to
pay all his debts without the aid of the property comprised in the settlement; or
" Fraudulent
settlements.
( 2 ) in the case of any covenant or contract made in consideration of
marriage for the future settlement on or for the settlor's wife or children of any
money or property wherein he had nol al the date of his marriage any estate on
interest (not being money or property of or in right of his wife);
if the settlor is adjudged insolvent or compounds arranges with his
creditors, and it appears to the CourL that the settlement, covenant or contract
was made in order lo defeat or delay crcdilors, or was unjustifiable having
regard lo the state of the settlor's affairs at the time when it was made, the Court
may refuse or suspend an order of discharge or grant an order subject to
conditions or refuse to approve a composition or arrangement.
45. (!) An order of discharge shall not release the insolvent fro in—
( a ) any debt due to the '[Government];
( b ) any debt or liability incurred by means of any farud or fraudulent
brcach of irusl to which he was a party; or
( c ) any debt or liability in respect of which he has obtained
forbearance by any fraud to which he was a party; or
Effect of order
or discharge.
'Substituted for lhe word "Crown" by para. 4( 1) of the Adaptation of Laws Order, (950.
Code-12
[Act in
(Pari III.—Administration of Property.—Section 46.)
{ d ) any liability under an order for maintenance made under section 488 of lhe 'Code of
Criminal Procedure, 1898. vof]898,
(2) Save as otherwise provided by sub-seciion (/), an order of discharge
shall release the insolvent from all debts provable in insolvency.
(5) An order of discharge shall be eouclusivc evidence of the insolvency, and of the
validity of lhe proceedings therein.
( 4 ) An order of discharge shall not release any person who at ihe date of
ihe presentation of the petition was a partner or co-trustcc wilh Lhe insolvent or was
jointly bound or had made any joinl conlracl with him, or any person who was surely
or in the nature of a surety for him.
PART III ADMINISTRATION OF PROPERTY.
Proof of debts.
Debts pro- 46. (V) Demands in lhe nature ol" unliquidated damages arising
vablc in in- otherwise than by reason of a contract or breach of trust shall not be
solvency, provable in insolvency.
(2) A person having notice of the presentation of any insolvency petition
by or againsi the debtor shall not prove for any debL or liability coniractcd by
the debtor subsequently lo the dale of his so having notice.
(J) Save as provided by sub-sections (7) and (2), all debts and liabilities,
present or future, certain or contingent, lo which (he deblor is subject when he is
adjudged an insolvenl or lo which he may become subject before his discharge
by reason of any obligation incurred before the dale of such adjudication, shall
be deemed lo be debts provable in insolvency.
( 4 ) An estimate shall be made by the official assignee of the value of any
debt or liability provable as aforesaid which by reason of its being subject to any
contingency or contingencies, or for any other reason, docs noi bear a certain value :
Provided lhat if in his opinion the value of the debt or liability is
incapable of being fairly estimated, he shall issue a certificate to that cffect, and
thereupon lhe debi or liability shall be deemed to be a debt not provable in
insolvency.
Explanation.—For the purposes of this scclion "liability" includes any
compensation for work or labour done, any obligation or possibility of an
obligation to pay money or money's worth on lhe breach of any express or
implied covenant, contract, agreement or undertaking, whether the breach docs
or docs noL occur, or is or is noL likey lo occur or capable of occuring, before
the discharge of the debtor, and generally it includes any express or implied
engage mem, agreement or undertaking to pay, or capable of resulting in the
payment of, money
'See now Ih'- Code of Criminal Procedure, 1973 {2 of 1974).

of 1909.]
(Part III.—Administration of Property.—Sections 47—49.)
or money's worth, whether the payment is, as rcspecls amount, fixed or

unliquidated; as respects time, present or future, certain or dependent on any
contingency or contingencies; as to mode of valuation, capable of being
ascertained by fixed rules, or as mailer of opinion.
47. Where there have been mutual dealings between an insolvent and a
creditor proving or claiming to prove a debl under this Act, an account shall be
taken of what is due from the one party to the other in respeel of such mutual Mutual
dealing
dealings, and the sum due from the one party shall be set-off against any sum
s and
due from the other party, and the balance of the account, and no more, shall be set-off.
claimcd or paid on cither side respectively :
Provided that a person shall not b'c entitled under this section to claim the
benefits of any set-off against the property of an insolvent in any case where he
had at the lime of giving credit to the insolvent notice of the presentation of any
insolvency petition by or against him.
48. With respect to the mode of proving debts, the right of proof by
secured and other creditors, lhe admission and rejection of proofs, and the other
matters referred to in the Second Schedule, the rules in that Schedule shall be
observed. Rules as to
49. (J) In the distribution of the property of Lhe insolvent there shall be proof of
debts.
paid in priority to all other debts—
(a) all debts due to the '[Government] or lo any local authority;
Priority or
(ib) all salary or wages of any clerk, servant or labourer in respeel of
debts.
services rendered lo the insolvent during four months before the date of the
presentation of the petition, not exceeding three hundred rupees- for each such
clerk, and one hundred rupees for each such servant or labourer; and
(c) rent due to a landlord from Ihc insolvent : provided the amount
payable under this clause shall not exceed one month's rent.
(2) The debts specified in sub-section (/) shall rank equally between
themselves and shall be paid in full, unless the property of the insolvent is
insufficient to meet them, in which case they shall abate in equal proportions
between themselves.
(5) Subject lo the retention of such sums as may be necessary for lhe
expenses of administration or otherwise, Lhe debts specified in sub-section (I)
shall be discharged forthwith in so far as the property of the insolvent is
sufficient to meet them.
l
Sce fool-note I on page 601, ante.
[Act in
(Pari III.—Administration of Properly.—Sections 50—52.)
{ 4 ) In lhe case of partners, the partnership property shall be applicable

in the first instance in payment of the partnership debts, and the separate
property of each partner shall be applicable in the first instance in payment of his
separate debts. Where there is a surplus of the separate property of the partners,
it shall be dealt with as part of the partnership property; and where there is a
surplus of the partnership property, it shail be dcali wilh as pari of the respective
separate property in proportion to the rights and interests of each partner in the
partnership property. '
(5) Subject lo lhe provisions of this Act, all debts proved in
insolvency shall be paid rateably according to the amounts of such debts
respectively and without any preference.
(6) Where there is any surplus after payment of the foregoing debts, it
shall be applied in payment of interest from lhe date on which the debtor is
adjudged an insolvent at the rale of six per centum per annum on all debts
proved in insolvency.
50. After an order of adjudication has been made no distress for rent
due before such order shall be made upon the goods or effects of the insolvent,
unless the order be annulled, bul lhe landlord or parly to whom lhe renl may be
"Kent due due shall be entitled lo prove in respect of such rent.
before ad-
judication. Property available for payment of debts.
51. The insolvency of a debtor, whether the same lakes place on the
debtor's own petition or upon thai of a creditor or creditors, shall be deemed to
have relation back lo and to commence al—
(o) lhe time of the commission of the acl of insolvency on which an
Relation of order of adjudication is made against him, or
assignee's
title. ( b ) if lhe insolvenl is proved lo have committed more acts of insolvency
than one, lhe time of the first of the acts of insolvency proved to
have been committed by the insolvent wilhin Ihree months next
preceding lhe date of the presentation of lhe insolvency petition :
Provided that no insolvency petition or order of adjudication shall be
rendered invalid by reason of any act of insolvency committed anterior to the
debl of the petitioning creditor.
52. (/) The property of lhe insolvenl divisible amongst his creditors, and
in this Acl referred lo as the property of the insolvent, shall not comprise lhe
following particulars, namely :—
(a) property held by the insolvent on trust for any other person;
Description
of insolvent's
property
divisible
amongst
creditors.
of 1909.]
(Part III.—Administration of Property.—Sections 53. 54.)

( b ) the tools (if any) of his trade and lhe necessary wearing apparel,
bedding, cooking vessel, and furniture of himself, his wife and
children, lo a value, inclusive of lools and apparel and other
necessaries as aforesaid, nol exceeding three hundred mpecs in lhe
whole.
(2) Subjcct as aforesaid, the property of lhe insolvent shall comprise the
following particulars, namely :—
(a) all such properly as may belong to or be vested in the insolvent al
the commencement of the insolvency or may be acquired by or
devolve on him before his discharge;
(b) the capacity to exercise and to take proceedings for exercising all
such powers in or over or in respect of properly as might have
been exercised by the insolvent for his own benefit at the
commencement of his insolvency or before his discharge; and
(c) all goods being at lhe commencement of the insolvency in the
possession, order or disposition of the insolvcnl, in his trade or
business by the consent and permission of the true owner under
such circumstances lhat he is the reputed owner thereof : .
Provided that things in action other than debts due or growing due to ihe
insolvent in the course of his trade or business shall not be deemed goods within
the meaning of clause (c) :
Provided aiso that the true owner of any goods which have become
divisible among the creditors of the insolvent under lhe provisions of clause (c)
may prove for the value of such goods.
Effect of insolvency on antecedent transactions.
53. (7) Where execution of a decree has issued against the property of a
debtor, no person shall be entitled lo the benefit of the execution against the
official assignee, except in respeel of assets realized in the course of lhe
execution by sale or otherwise '[before the date of the admission or the
insolvency petition], Restric-
( 2 ) Nothing in this scction shall affect the right of a sccured creditor in tion or
respeel of property against which a decrce is executed. rights of
(J) A. person who in good failh purchases the property of a debtor creditor
under
under a sale in execution shall in all cases acquire a good tille to il against the
exe-
official assignee. cution.
54. Where execution of a decree has issued against any property of a
debtor which is saleable in execution, and before ihe sale thereof notice is given
lo lhe Court executing lhe decree thai an order of adjudication has been made
against the debtor,
'Substituted for ihc words "before the dale of ihc order of adjudication and before he had Dunes of
notice or [he presentation of any insolvency petition by or against the debtor", by s. 4 of the Court exe-
Insolvency Law (Amendment) Act, 1950 (III of 1950). cuting de-
cree as (o
property
token in
execution-
606 The Presidency-towns Insolvency Acl, 1909.
[Act in
(Pari III.—Administration of Property.—Sections 55—58,)

the Court shaJJ, oti application, direct the property, if in the possession of lhe
Court, to be delivered to lhe official assignee, but the costs of the execution shall
be a first charge on the property so delivered, and the official assignee may sell
the property or an adequate pari [hereof for lhe purpose of satisfying [he chargc.
55. Any transfer of property, not being a transfer made before and in
consideration of marriage, or made in favour of a purchaser or incumbrancer in
good faith and for valuable cosideraiion, shall, iT the transferor is adjudged
insolvent wilhin two years after the date of the transfer, be void against lhe
official assignee.
56. (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, wilh a view of giving
that creditor a prcfcrcncc over the other creditors, shall,
if such person is adjudged insolvent on a petition
presented within three months after lhe date thereof, be
deemed fraudulent and void as against the official
assignee.
(2) This section shall not affect [he rights of any person making title in
good faith and for valuable consideration through or under a creditor of the
insolvent.
57. Subjcci lo [he foregoing provisions with respec[ lo the effcct of
insolvency on an execution and wilh respccl to the avoidance of ccrlain transfers
and preferences, nothing in this Act shall invalidate in lhe case of an
insolvency—
(а) any payment by Lhe insolvent to any of his creditors;
(б) any payment or delivery lo the insolvent;
(<r) any transfer by the insolvenl for valuable consideration; or

(d) any contraci or dealing by or with the insolvenl for valuable
consideration :
Provided lhal any such transaction lakes place before lhe date of lhe
order of adjudication and thai the person with whom such transaction lakes placc
has noi al the lime notice of the presentation of any
insolvency petition by or against ihe debtor.
Realization of property.
58. (7) The official assignee shall, as soon
as may be, lake possession of the deeds, books and documents of the insolvenl
and all other parts of his properly capable of manual delivery.
The P residency-lowns Insolvency Act. 1909. 607
of 1909.]
(Pari III.—Administration of Property.—Sections 59, 60.)
(2) The official assignee shall, in relation to and for ihe purpose of
acquiring or retaining possession or the property of the insolvent, be in the same
position as if he were a receiver of the property appointed under lhe Code of
Civil Procedure 1908, and the Court may on his application cnforce such
acquisition or retention accordingly.
(J) Where any pari of the property of the insolvent consists of slock,
shares in ships, shares, or any other property transisls of stock, shares in ships,
shares, or any other property transferable in the books oT any company, office or
person, ihe official assignee may exercise lhe right to transFer the property to the
same extent as the insolvent might have cxcrcised it, if he had not
becomc insolvent.
(4) Where any part of the properly of the insolvent
consists of things in action, such things shall be deemed Lo have been duly trans-
ferred to the official assignee.
(5) Any treasurer or other officer, or any honker, attorney or agent of
an insolvent, shall pay and deliver to the official assignee all money and
securities in his possession or power as such officer, banker, attorney or agent,
which he is nol by law entitled to retain as against lhe insolvent or lhe official
assignee. If he fails so co do, he shall be guiliy of a contempt of Court, and shall
be punishable accordingly on ihc application of lhe official assignee. .
59. (/) The Court may grant a warrant to any prescribed officer of lhe
Court or any police-officer ahove the rank of a conslablc to seize any parL of the
property of an insolvent in the custody or possession of the insolvent or of any
other person, and with o view to such seizure to break open any house, building
or room of the insolvent where the insolvent is supposed to be, or any building or
receplaclc of the insolvent where any of his properly is supposed to be.
(2) Where the Court is satisfied that there is reason to believe that
property of Lhe insolvent is concealed in a house or place not belonging to him, Seizure of
lhe Courl may, if it thinks fit, grant a search-warrant lo any such officer, as properly of
insolvent.
aforesaid who may execute it according to its tenor.
60. (/) Where an insolvent is an officer of Ihc '[the Indian Army or Appropriation
of portion of
Navy], or an officer or clerk or otherwise employed or engaged in the civil
pay or other
scrvice of the 2[Government], the official assignee shall receive for distribution incomc lo
amongst the creditors so much of lhe insolvent's pay or salary liable to creditor.
attachment in execution of a decrce as the Court may direct.
(2) Where an insolvent is in Lhe rcccipL of a salary or income other than
as aforesaid, the Court may, at any lime afler adjudication and from time to time,
make such order as il thinks just
2
See fool-note 1 on page 601. u/ne.
[Act III
60S The Presidency-wwns Insolvency Act, 1909.
(Part 111.—Administration of Property.—Sections 61-64.)
for the payment lo the official assignee, for distribution among the creditors of
so much of such salary or income as may be liable lo attachment in cxcculion of
a decree, or of any portion thereof.
<1. The property of the insolvent shall pass from official assignee lo
Vesting and official assignee, and shall vest in the official assignee for lhe time being during
transfer of
his continuancc in officc, without any transfer whatever.
properly.
62. (/) Where any pari of the properly of an insolvent consists of land of
any tenure burdened wilh onerous convenams, of shares or slocks in companies,
Disclaimer of of unprofitable contracts, or of any other property that is unsaleable, or not
onerous
property.
readily saleable, by reason of iis binding the possessor thereof lo the
performance of any onerous acl or to the payment of any sum of money, lhe
official assignee may, notwithstanding thai he may have endeavoured to sell or
have laken possession of the property, or exercised any act of ownership in
relation thereto, but subject always lo lhe provisions hereinafter contained in that
behalf, by writing signed by him, al any time wilhin twelve months after the
insolvent has been adjudged insolvent, disclaim lhe properly:
" Provided that, where any such property has not come to the knowledge of
the official assignee within one month after such adjudication as aforesaid, he
may disclaim the property at any lime within twelve months after he has first
become aware thereof.
(2) The disclaimer shall operate to determine, as from lhe date thereof,
the rights, interest and liabilities of the insolvent and his property in or in
rcspecL of the property disclaimed, and shall also discharge the official assignee
from all persona) liability in respect of the properly disclaimed as from the date
when the properly vested in him, but shall not, except so far as is necessary for
lhe purpose of releasing the insolvent and his property and the official assignee
from liability, affect the rights or liabilities of any other person.
63. Subject always to such rules as may be made in ihis behalf, the
official assignee shall not be entitled to disclaim any leasehold interest without
the leave of the Court; and the Court may, before or on granting such leave,
require such notices to be given to persons interested, and impose such terms as
a condition of granting leave and make such orders wilh respect lo fixtures,
tenant's improvements and other mailers arising out of the tenancy, as the Court
Disclaimer of
ihinks just.
leaseholds.
64. The official assignee shall not be entitled to disclaim any property
in pursuance of section 62 in any case where an application in writing has been
made to the official assignee by any person interested in the property requiring
him to decide whether he will disclaim, and the official assignee has for a period
of iwenty-eight days afier the receipt of the application, or such extended period
Power lo call
on official
assignee lo
disclaim.
The Presidency-wwns Insolvency Ad. J 909. 609
of 1909.]
(Pari III.—Administration of Property.—Sections 65, 66.)
as may be allowed by the Court, declined or neglected to give noticc that he

disclaims the property; and in the case of a contract, if the official assignee, after
such application as aforesaid, does not within the said period or extended period
disclaim lhe contract, he shall be deemed to have adopted it.
65. The Court may, on the application of any person who is, as against
the official assignee, entitled lo lhe benefit or subject to the burden of a contract
Power for Court
made wilh the insolvent, make an order rescinding the contract on such terms as
lo rescind
lo payment by or to either parly of damages for the non-performance of the contract.
contract, or otherwise, as to the Court may seem equitable, and any damages
payable under the order to any such person may be proved by him as a debt
under the insolvency.
66. (7) The Court may, on Ihc application of any person either claiming
any interesL in any disclaimed property, or under any liability nol discharged by
Power for Court
this Act in respect of any disclaimed property, and on hearing such persons as it
(a make vesting
thinks fit, make an order for the vesting of the property in or delivery thereof lo order in respect
any person entitled thereto, or lo whom il may seem jusl thai lhe same should be of disclaimed
delivered by way of compensation for such liability as aforesaid, or a trustee for propeny.
him, and on such terms as the Court thinks jusl; and on any such vesting order
being made, the property comprised therein shall vest accordingly in the person
therein named in lhat behalf without any transfer for the purpose:
Provided always, lhat, where the property disclaimed is of a leasehold
nature, the Court shall not make a vesting order in favour of any person claiming
under the insolvent, whether as under-tessee or as mortgagee, cxccpl upon the
terms of making such person subject lo the same liabilities and obligations as lhe
insolvent was subject to under the lease in respeel of the property at lhe dale
when the insolvency petition was Hied, and any under-lessee or mortgagee
declining to acccpt a vesting order upon such terms shall be excluded from all
interest in and security upon Ihc property, and if there is no person claiming
under [he insolvent who is willing to accept an order upon such terms, the Court
shall have power to vest the insolvent's interest in the property in any person
liable cither personally or in a representative character, and either alone or
joinLly with the insolvent, to perform the lessee's covenants in such lease, freed
and discharged from o!J estates, incumbrances and interests creatcd therein by
the insolvent.
(2) The Courl may, if ii thinks fit, modify the terms prescribed by the
foregoing proviso so as lo make a person in whose behalf the vesting order may
be made subject only to the same liabilities and obligations as if the lease had
been assigned lo him al the date when the insolvency petition was filed, and (if
the case so requires)
[Act III
(Part 111—Administration of Properry.-Sections 67-69.)
as if lhe lease had comprised only the property comprised in lhe vesting order.
67. Any person injured by the operation of a disclaimer under the
foregoing provisions shall be deemed to be a creditor of the insolvent to the
Persons in- amount of lhe injury, and may accordingly prove (he same as a debt under the
jured by
insolvency.
disclaimer
may provo.
68. (1) Subject to the provisions of this Act, the official assignee shall,
wilh all convenient speed, realize lhe properly of the insolvent. and for the
Duiy and
purpose may-
powers of
fa) sell all or any pari of lhe property of lhe insolvent;
official
(£>) give receipts for any money received by him;
assignee lo
realiza-
and may, by leave of the Court, do all or any of the following things,
namely:—
(c) carry on lhe business of lhe insolvenl so far as may be necessary for the
beneficial winding up of lhe same;
(J) institute, defend or continue any suit or other legal proceeding relating to the
properly of lhe insolvent;
(e) employ a legal practitioner or other agent to take any proceedings
or do any business which may be sanctioned by the Court;
(f) accept as lhe consideration for the sale of any property of the
insolvent a sum of money payable al a future time or fully paid
shares, debentures or debenture slock in any limited company
subject lo such stipulations as to security and otherwise as the
Court ihinks fit;
(g) mortgage or pledge any part of the property of the insolvent for lhe
purpose of raising money or for the payment of his debts or for the
purpose of carrying on lhe business;
(/i) refer any dispute to arbitration, and compromise all debts, claims and
liabilities, on such terms as may be agreed upon;
(0 divide in its existing form amongst the creditors, according to ils
estimated value, any properly which, from ils peculiar nature or
other special circumstances, cannot readily or advantageously be
sold.
(2) The official assignee shall account lo the Court and pay over all
monies and deal with all securities in such manner as is prescribed or as lhe
Court directs.
Distribution of property.
Declaration and
69. (7) The official assignee shall, with all convenienl speed, declare
distribution of
dividends, and distribute dividends amongst the creditors who have proved their debts.
of 1909.]
(Pari ///, —Administralion of Property.—Sections 70 —72.)
(2) The first dividend (if any) shall be declared and be distributed wilhin
'[one year] after lhe adjudication, unless the official assignee satisfies the Court
that there is sufficient reason for postponing the declaration to a later date,
(J) Subsequent dividends shall, in the absencc of sufficient reason to the
contrary, be declared and be payable at intervals of not more than six months.
(4) Before declaring dividend, the official assignee shall cause noticc
of his intention lo do so lo be published in the prescribed manner, and shall also
send reasonable notice thereof lo each creditor mentioned in the insolvent's
schedule who has not proved his debt.
(5) When the official assignee has declared a dividend, he shall send
to each creditor who has proved a notice showing the amount of the dividend,
and when and how it is payable, and, if required by any creditor, a statement in
lhe prescribed form as to the particulars of the estate.
70. Where one partner in a firm, is adjudged insolvent, a creditor to
whom the insolvent is indebted jointly wilh other partners in (he firm or any of
them shall not receive any dividend out of the separate property of the insolvent
until all the separate creditors have received the fuil amount of Ihcir respcciivc
debts. Joinl
71. (7) In the calculation and distribution of dividends, the official and
separate
assignee shall retain in his hands sufficient assets (o mecl-
pro pen
(o) debts provable in insolvency and appearing from (he insolvent's ics.
statements or otherwise to be due to persons resident in places so
distant in the ordinary course of communication they have not had
sufficient lime lo lender their proofs;
Calcula-
(b) debts provahle in insolvency the subject of claims not yel tion of
determined; dividends.
(c) disputed proofs or claims; and

(d) the expenses necessary for the administration of the eslate or
otherwise.
(2) Subject to the provisions of sub-scction (/), all money in hand shall
be distributed as dividends.
72. Any creditor who has not proved his debt before '.he declaration of Right of
creditor
any dividend or dividends shall be entitled to be paid oul of any money for the
who has
lime being in lhe hands of the official assignee any dividend or dividends which nor
he may have failed lo receive, before that money is applied to the payment of proved
any future dividend or div- debt
before
declara-
tion or a
1 devidend.
Substituted for the words "six months" by s. 2 of the Presidency-towns Insolvency
(Amendment) Acl, 1929 (III of 1929),
612 The Presidency-towns Insolvency Act, J 909.
[Act III
(Part HI.—Administration of Property.—Sections 73—76.)
idends, but he shall nol be entitled lo disturb the distribution of any dividend
declared before his debt was proved by reason [hat he has not participated
therein.
73. (7) When the official assignee has realised all the properly of the
Final insolvent, or so much thereof as can, in his opinion, be realised without
dividend. needlessly protracting the proceedings in insolvency, he shall wilh the leave of
the Court, declare a final dividend; bui, before so doing, he shall give notice in
manner prescribed to the persons whose claims to be creditors have been notified
to him but nol proved thai, if they do not prove their claims, lo the satisfaction of
ihc Courl, within the time limited by the notice, he will proceed to make □ final
dividend without regard lo their claims.
(2) After the expiration of the time so limited, or, if ihe Court on
application by any such claimant grams him further time for establishing his
claim, then on the expiration of lhat further lime, the property of lhe insolvent
shall be divided among the creditors who have proved their debts, without regard
to the claims of any oihcr persons.
74. No suit for a dividend shall lie against the official assignee, but,
where the official assignee refuses to pay any dividend, the Court may, on the
application of the creditor who is aggrieved by such refusal, order him to pay it,
and also to pay out of his own money interest thereon at such rate as may be
No suil for prescribed for the lime thai it is withheld , and the costs of the application.
dividend.
75. (/) Subject to such conditions and limitations as may be prescribed,
lhe official assignee may appoint the insolvent himself to superintend Ihc
management of the properly of Lhe insolvent or of any part thereof, or to carry
on Lhe trade (if any) of the insolvent, for the benefit of fiis creditors, and in any
other respect lo aid in administering Ihe property in such manner and on such
Power lo terms as the official assignee may direct.
allow
insolvent lo (2) Subject as aforesaid, the Court may, from lime to time, make such
manage
allowance as it thinks just to the insolvent out of his properly, for the support of
property, and
allowance lo
lhe insolvent and his family, or in consideration of his services, if he is engaged
insolvent for in winding up his estate, but any such allowance may at any time be varied or
main- determined by ihc Courl,
lenance or
service. 76. The insolvent shall be entitled lo any surplus remaining after
payment in full of his creditors, with interest, as provided by this Acl and of lhe
expenses of the proceedings taken thereunder.
Right of
insolvent to
surplus.
of 1909.]
(Part IV.—Official Assignees—Section 77.)
PART IV
OrFrci AL ASSIGNEES.
77. '(1) The 2 [Stale Government] shall, after consullaiion wilh and with Appointment or
the concurrence of lhe Chief Justice, appoint substantively or lemporarily a official
person to the office of official assignee of insolvent's estates for the High Court 3 assignee and
deputy official
[at Calcutta] and may, after the like consultation and with the like concurrence, assignee of
appoint, substantively or temporarily, a person or persons to Lhe office of deputy insolvents'
official assignee for the said Court. estates,
4
(M) Subject to rules made under scction 5[112A], the deputy official
assignee shall have all the powers and shall discharge all the duties and in
exercise of such powers and in the discharge of such duties shall be subject to all
the liabilities of the official assignee under this Acl.
(2) Every official assignee J[and every deputy official assignee] shall give
such security and shall be subjcct to such rules and shall act in such manner as
may he prescribed.
'Substituted Tor the original sub-section by s 5 ( a l of the Presidency-towns Insolvency

(Bengal Amendment) Acl, 1936 (Ben. Act XVIII of 1936).
The sub-sec lion which was substilulcd is as follows, namely:—
"CO (a) The Chief Justice of ihe High Court al Madras may from lime to lime appoint subs I
actively or temporarily such person as he thinks fit to the office of official assignee of insolvents' estates
and such person or persons as he thinks fit to lhe office of lhe deputy official assignee for the said Court
and may. with the concurrence of a majority of the olher Judges of ihc Court, remove the person for Ihe
lime being holding any of (he salt! offices for any cause appearing lo the Court sufficient.
(b) The [Slate) Government of [West Bengal] shall, after consullaiion with, and wilh lhe
concurrence of, the Chief Juslicc or the High Court al Calculi a, appoint substantively or lemporarily a
person lo lhe office of official assignee of insolvents' estates for Ihe said Court and may. after the like
consullaiion and with Ihc like concurrcncc, appoint substantively or tcmpotarily a person or persons lo
the officc of (he deputy official assignee for the said Coun.
(c) For the High Coun al Bombay, the [Stale] Govemmcnl of Bombay, may from lime lo time
appoint substamivdy or lemporarily such person as the [Stale] Government thinks fit lo lhe office of
official assignee of insolvents' cslales and such person □r persons as the [Slale] Govemmcnl thinks fil (o
the office of (he deputy official assignee.".
■The words "Provincial Govemmcnl" were first substituted for the word "Local Governmenl"
by para. 4 (/) of the Government of India (Adaptation of Indian Laws) Order. 1937. Thereafter the word
"Slate" was substituted for Ihc words "Provincial" by para. 4 (/) of ihe Adaptation of Laws Order, 1950.
'Subsliiutcd for the words "al Fort William" by para. 3 and the Eleventh Schedule to lhe
Adaptation of Laws Order, 1950. <
'Inserted by s. 4 of lhe Insolvency Law (Amendment) Act, 1930 (X of 1930).
'Subsliiutcd for "112" by s. 3 (6) of lhe Presidency-(owns Insolvency (Bengal Amendment)
Acl, 1936 (Ben. Acl XVIII of 1936).
[Act III
(Part IV.—Official Assignees.—Sections 78—80.)
1
(5) Notwithstanding anything contained in sub-section (7), the person
substantively or temporarily holding lhe office of official assignee under this
AcL for the High Court - [at Calcutta] immediately before the commencement of
the Presidency-towns Insolvency (Bengal Amendment) Act, 1936, shall, without
Ben. Ad.
further appointment for lhal purpose, become lhe official assignee substantive or
XVIII of
temporary, as the ease may be, as if appointed by lhe 3 [State Government] under 1936.
subsection (/).
78. An official assignee may, for lhe purpose of affidavits verifying
proofs, petitions or oLher proceedings under this Acl, administer oaths.
Power lo
administer 79. (7) The duiies of an official assignee shall have relation Lo the
oalh. conduct of the insolvent as well as to lhe administration of his estate.
(2) In Particular it shall be the duty of the official assignee—
Duties as
regards [he
(a) to investigate lhe conduct of the insolvenl and to repon to the Court
insolvent's upon any application for discharge, stating whether [here is reason
eon- duel. to believe that the insolvenl has committed any act which
constitutes an offcncc under this Act or under sections 421 to 424
of the Indian Penal Code in conncction with his insolvency or
which would justify lhe Courl in refusing, suspending or qualifying
an order for his discharge;
(b) to make such other reports concerning lhe conduct of the insolvent
XLV of
as the Court may direct or as may be prescribed; and IH60.
(c) lo take such pan and give such assistance in relation to the
prosecution of any fraudulent insolvent as the Court may dircct or
as may be proscribed.
Duiies to 80. The official assignee shall, whenever required by any creditor so to
furnish list
do, and on payment by the creditor of the prescribed fee, furnish and send to the
of cre-
dilors,
creditor by posl a list of the creditors showing in the list the amount of Lhe deb[
due [o each of the creditors.
of 1909.]
(Part IV.—Official Assignees.Sections 81—82.)

J
81. The official assignee and any deputy official assignee shall, in lhe
discahrge of their functions under this Acl, be under (he administrative control of Administrative
control over
the - [Stale Government] exccpt in so far as they are required by or under this Act
official assignee
to act under the conLrol or direction of the High Court. and deputy
'81A. The salary, allowances, pension and conditions of service of the official assignee.
Salary, allow-
official assignee, and of any deputy official assignee shall be such as may be
ance, pension
proscribed by rules made under the Government of India Acl, and such salary, and conditions
allowances and pension shall be paid by the 3 [Stale Government]. ' or servicc or
official assignee
and tltputy offi-
cial assignee.
"81B. (J) The : [Stale Government] may determine the number,
Establish-
designations and grades of officers and servants (other than employees who are ment of
paid by the day) whom the official assignee may employ for the purposes of this official
Act and the amount and nature of the salary, allowances and other remuneration assignee.
lo be paid to each such oITiccr and scrvanl.
(2) The conditions of servicc of lhe officers and servants of the official
assignee shall be prescribed by lhe :[Stale Government], (i) The salaries,
allowances and other remuneration of the officers and servants of the official
assignee and all other costs, charges and expenses of his establishment shall be
paid by the -[Stale Government].
82. [(/)]J The Courl shall call the official assignee to account for any
misfeasance, neglect or omission which may appear in his accounts or otherwise,
and may require the official assignee to make good any loss which the eslale of
the insolvent may have sustained by reason of the misfeasance,neglecL or Misfea-
omission, sance.
■4(2) The revenues of lhe 2 [Stale Government] shall be liable lo make
good a]] sums which lhe official assignee is required by order of the Court to pay
under sub-section (}) in respccl of any misfeasance, neglect or omission which
occurred after the commencement of lhe Presidency-towns Insolvency (Bengal
Amendment) Acl, 1936.
3
(3) Nothing in sub-section (2) shall prevent the 5 [Slate Government]
Ben. Acl 3 No remuneration whatever beyond lhal referred to in sub-scclion (/) shall be received
XVIII ofby an official assignee as such.".
1936. 'See foot-nole 2 on page 613, ante.
4
SubstiluieJ for lhe original sub-section by s. 3 (c) or lhe Presrdency-iowns Insolvency
(Bengal Amendment) Act. 1936 (Ben. Act XVIII or 1936).
The sub-section which was substiluted is as follows, namely:— ^ "(J) Notwithstanding
anything in sub-section (I). lhe persons substantively or temporarily holding the office of official
assignee immedialely before the commencement of this Acl in the Courts for the relief of Insolvent
Debtors at Calcutta. Madras and Bombay respectively under the Indian Insolvency Act. 1943, shall,
wilhoul further appointment for that purpose, become the official assignees, substantive or temporary, as
the case may be. under Ifiis Acl in the High Courts at Fori William, Madras and Bombay respectively.".
'See foot-note 3 on page 613, ante,
1
See foot-nole 2 on page 613, ante.
'Section 82 was le-numbered as sub-seel ion (/) of thai section and after that sec lion as so re-
numbered sub-see I ions (2) and (J) wen: added by s. 5 of lhe Presidency- towns Insolvency (Bengal
Amendment) Act, 1936 (Ben. Acl XVIII of 1936).
'Sections 82A, 82B and 82C were inserted by s. 6 of the Presidency-towns Insolvency (Bengal
A mend muni) Aci, 1936 (Ben. Acl XVIII of 1936).
'See Tool-note 2 on page 613. utile.
'Seelion 84A, was inserted by s, 7 of the Presidency-towns Insolvency (Bengal Amendment)
[Act III
from recovering any sum paid by lhe 3 [State Government]

(Part IV.-Official Assignees.—Sections 82A—84A.)
under lhal sub-section from the person who was holding the office of official
assignee when the misfeasance, neglcct or omission occurred.
Liability or
Si ale Gov-
'82A. Where the official assignee has incurred, whether before or after
emmcnl for the commencement of lhe Presidency-towns Insolvency (Bengal Amendment)
costs in legal Act, 1936, in the matter of insolvency-
proceedings, (a) any costs in legal proceedings taken by him under the direction of
etc. the Coun, or
(b) any civil liability, bona fide in lhe discharge of his duties, Ihc
revenues of lhe 1 [State Government] shall be liable for the payment of such
costs or liability, in so far as the assets realized by the official assignee in respect
of such insolvency are insufficient lo meet such costs or liability. ■
Cenain
liabilities not to
'82B. Where an insolvent's esiale has no available assets, the official
be incurred assignee shall not incur any costs, charges or expenses in rcspccl of such estate
without ihc without the express direction of the Court, but lhe Court on lhe application of the
express official assignee may empower him to spend an amount specified by lhe Courl in
direction of ihe payment of any costs, charges and expenses of or in connection with the
Coun. realization or administration of ihe estate of the insolvent, and the revenues of
Sums paid lhe 1 [Slate Government] shall be liable Tor lhe payment of such amount.
J
under section 82C. Any sum paid oul of the revenues of Lhe 2 [Slate Government]
82A or section under section 82A or section 82B in respeel of an insolvent's estate shall be
82B to be reali- repaid to the -[Slate Government] by the official assignee out of any assets of the
zed (torn (he estate which may subsequently become available, in priority to all other claims
estate of the
and charges on such assets other ihan fees and percentages chargeable by Lhe
insolvent. Naine
official assignee under ihis AcL.
under which to
sue or t>e sued. 83. The official assignee may sue and be sued by the name of "lhe
official assignee of the properly of—, an insolvent," inserting the name of the
insolvent, and by lhal name may hold properly of every description, make
contracts, enter into any engagements binding on himself and his successors in
Office vacated office, and do all other acts necessary or expedient lo be done in the execution of
by insulvcncy.
his officc,
84. If an order of adjudication is made against an official assignee, he
Account of shall thereby vacate the office of official assignee.
official as-
3
signee. in 84A. (/) The official assignee shall maintain an account in the
vestments prescribed manner and shall pay into such account, after making any prescribed
and proceeds deduction-
of in- fa) all monies received by him in the realization of insolvent's estates and
vestment.
(b) any other sums that may be prescribed.
(2) Subject to Lhe control of lhe1 [State Government], whenever the cash
balance standing to the credit of the said account is, in lhe
Act, 1936 (Ben. Act XVltl of 1936),

of 1909.]
(Part IV.—Official Assignees ____ Section SS.)
opinion of the official assignee in cxccss of the amount which is required for the
lime being to meet demands in respect of insolvents' estates, or to make the
payments required under section 122 or any other payments that may be
prescribed, the official assignee shall invest such excess in the prescribed
manner.
(3) Subject to Lhe control of the 6 [State Government], whenever any
part of the money so invested is, in the opinion of the official assignee, required
to meel any demands in respect of insolvents' estates, or to make Lhe payments
required under section 122 or any other payments that may be prescribed, the
official assignee may realize such part of the said investments as may be
necessary, and shall credit lhe proceeds of such realisation to the said accounl,
(4) The official assignee shall transfer and pay to such authority and in
such manner and at such limes as may be prescribed in this behalf the proceeds
of such investments, and lhe same shall be carried to the accounl and credit of the
1
[State Government].
(J) The provisions of sub-section (4) shall apply to the balance of the
proceeds, accumulated before the commencement of the Presidency-towns
Insolvency (Bengal Amendment) Act, 1936, of the investments made by the
official assignee of sums received by him in lhe realization of insolvents' estates,
whether such balance or any part thereof has been invested or not.
(6) Subject lo the provisions of sub-section (5), the provisions of sub-
sections (I), (2) and (5) shall apply lo all monies in the hands of the official
assignee at the date of the commencement of the Prcsidcncy-lowns Insolvency
(Bengal Amendment) Act, 1936, and to all investments made by him before that
date. l
85. (7) Subject to the provisions of this Act and to the directions of the
Court, the official assignee shall, in the administration of the property of the
insolvent and in the distribution thereof amongst his creditors, have regard to any
resolution that may be passed by the creditors al a meeting.
Discrc-
(2) The official assignee may, from time lo time, summon meetings of
L JO
the creditors for the purpose of ascertaining their wishes, and it shall be his duty nary
to summon meetings at such limes as the creditors, by resolution at any meeting, powers
or the Court may direct, or whenever requested in writing to do so by one-fourth and
in value of lhe creditors who have proved. control
[hereof.
(3) The official assignee may apply to the Court for directions in relation
to any particular matter arising under the insolvency.
6
Ste fool-note 2 on page 613, ante.
[Act III
(Part IV.—Official Assignees.—Sections 86, 87.—Part V,— Committee of Inspection.—Sections 88, 89.)
(4) Subjcci lo the provisions of ihis Act, the official assignee shall use
his own discretion in ihe management of the estate and its distribution among the
creditors.
Appeal to g6. If ihe insolvent or any of the creditors or any other person
'' is aggrieved by any acl or decision of the official assignee, he may
appeal lo lhe Court, and the Court may confirm, reverse or modify ihc act or decision
complained of, and make such order as it thinks just.
Control of
87. (/) If any official assignee does not faithfully perform his duties and duly
Coun.
observe all the requirements imposed on him by any enactment, rules or otherwise, with
respect lo the performance of his duties, or if any complaint is made lo the Court by any
creditor in regard thereto, the Court shall enquire into ihc matter and take such action
thereon as may be deemed expedient.
(2) The Court may at any lime require any official assignee Lo answer
any enquiry made by it in relation lo any insolvency in which he is engaged, and
may examine him or any other person on oath concerning the insolvency.
(J) The Court may also direct an investigation to be made of the books
and vouchers of the official assignee.
PART V
COMMITTEE OF INSPECTION.
88. The Court may, if il so thinks fit, authorize the creditor who have proved, lo appoint
Commillee
of inspec- from among the creditors or holders of general proxies or general powers-of-attomey from
tion. such creditors, a com- millcc of inspection for the purpose of superintending the
administration of the insolvent's property by the official assignee:
Provided lhal a creditor, who is appointed a member of a commillee of

inspection, shall not be qualified to act until he has proved.
89. The commillee shall have such powers of control over lhe proceedings of the
official assignee as may be prescribed.
Control of
eommiwec
of inspec-
tion over
official
assignee.
of 1909.]
{Part VI.—Procedare.—Sections 90, 91.)
PART VI
PROCEDURE,
90. (/) In proceedings under this Acl the Court shall have the Powers of like powers and
follow lhe like procedure as il has and follows in lhe thc CourI- exercise of ils ordinary original civil
jurisdiction:
Provided that nothing in this sub-section shall in any way limit the jurisdiction
conferred on the Court under this Act.
(2) Subject to lhe provisions of this Act and rules, lhe costs of and incidental to
any proceeding in the Court shall be in the discretion of the Court.
(J) The Court may at any lime adjourn any proceedings before il upon such
terms, if any, as it thinks fit to impose.
(4) The Court may at any time amend any written process or proceeding under
this Act upon such lerms, if any, as it thinks fit to impose.
(5) Where by this Act or by rules the time for doing any acl or thing is limited,
the Court may extend the time either before or after the expiration thereof, upon such
terms, if any, as the Court thinks fil lo impose.
(6) Subject to rules, the Court may in any matter take the whole or any part of
lhe evidence either viva voce or by interrogatories, or upon affidavit, or by commission.
(7) For the puipose of approving a composition or scheme by joint debtors lhe
Court may, if it ihinks fit, and on the report of lhe official assignee lhal it is expedient
so lo do, dispense with the public examination of one of lhe joinL debtors if he is
unavoidably prevented from attending the examination by illness or absence abroad.
I* * * * * * *
91. Where two or more insolvency petitions are presented coiwolitta-

against the same debtor or againsl joint debtors or where joint debtors lion of
file separate petitions, the Court may consolidate the proceedings or pennons, any
of ihem on such terms as lhe Court thinks fit.
!
Sub-seel ion (A) was omiiicd by pan, 3 (/) and (he Schedule of [he Indian Independence (Adaptation
of Genual Acts and Ordinances) Order. 1943.
[Act III
(Pari VI,—Procedure.—Sections 92—98.)
92. Where lhe petitioner does nol proceed wilh due diligence on his petition, the Court
Powers lo may substitute as petitioner any other creditor to whom the debtor is indebted in the amouni
change carriage required by this Act in the case of a petitioning creditor.
of pelilion.
93. If a debtor by or against whom an insolvency petition has been presented dies, the
Conli nuance Dr
proceedings in ihe matter shall, unless ihe Coun otherwise orders, be continued as if he were
proceedings on alive. .
doaih of debtor.
94. The Court may, at any time, for sufficient reason, make an order slaying the
Power to
slay pro-
proceedings under an insolvency petition, either altogether or for a limited time, on such terms
codings. and subject lo such conditions as the Court thinks just,
95. Any creditor whose debt is sufficient to. entitle him lo present an insolvency
Power lo present petition against all the partners in a firm may present a petition againsL any one or more partners
pctilion against a
in the firm without including the others.
partner.
96. Where there are more respondents than one to a petition, the Court may dismiss
Power to dismiss
the petition as to one or more of them without prejudice lo lhe effeel of the petition as against the
petition against other or others of them.
some respondents
only. 97. Where an order of adjudication has been made on an insolvency petition against or
by one partner in a firm, any other insolvency petition against or by a partner in the same firm
Separate shall be presented in or transferred to the Court in which the first-mentioned petition is in course
in-
of prosecution; and such Court may give such directions for consolidating the proceedings under
solvency
pel) Lions
lhe petitions as it thinks jusl.
against
98. (7) Where a partner in a firm is adjudged insolvent, the Court may authorise the
partners.
official assignee to continue or commence and carry on any suit ar other proceeding in his name
and lhat of the insolvent's partner; and any release by the partner of the debt or demand lo which
the proceeding relates shall be void.
Suits by officio] (2) Where application for authority to continue or commence any suiL or any other
assignee and proceeding has been made under sub-section (J), notice of the application shall be given lo lhe
insolvent's
partners.
insolvent's partner, and he may show cause against it, and on his application the Court may, if il
thinks fit, direct that he shall receive his proper share of the proceeds of the proceeding, and if he
does not claim any benefit therefrom he shall be indemnified against costs in respect thereof as the Court
directs.
of 1909.]
(Part VI.—Procedure.—Sections 99, J00.—Part VII.—Limitation.— Sections 10!, I0IA.)
99. (/) Any two or more persons, being partners, or any person carrying on business under a
partnership name, may take proceedings or be proceeded against under ihis Act in lhe name
of lhe firm :
Proceedings in
Provided that ill thai case the Court may, on application by any person interested, partnership name.
order the names of the persons who arc partners in lhe firm, or lhe name of the person
carrying on business under a partnership name, lo be disclosed in such manner and verified on oath or
otherwise, as the Court may direct,
(2) In the case of a firm in which one partner is an infant, an adjudication order may be made
against the firm other than the infant partner.
100. (1) A warrant of arrest issued by the Court may be executed in the same manner and
subject to the same conditions as a warrant of aiTest issued under the Code of Criminal Procedure, 1898,
may be executed.
(2) A warrant to seize any part of the property of an insolvent, issued by the Court under section
59, sub-scction (7), shall be in the form prescribed, and sceLions 77 (2), 79, 82, 83, 84 and
102 of ihe Code shall, so far as may be, apply to the execution of such warrant. Warrants of
Insolvency
(5) A search-warrant issued by Lhe Court under section 59, sub- sccLion (2), may be Couns.
executed in lhe same manner and subject to the same conditions as a search-warrant for
property supposed to be stolen may be executed under the said Code.
PART VII
LlMrrATtON
101. The period of limitation for an appeal from any act or decision of the Limitation of
official assignee, or from an order made by an officer of the Court empowered appeals.
under section 6, shall be twenty days from lhe date of such act, decision or order, as
the case may be.
'101A. Where an order of adjudication has been annulled under this Act, in Exclusion of lime in
computing lhe period of limitation prescribed for any suit or other legal proceeding computation of period of
limitation in conain cases.
(other than a suit or legal proceeding in respcct of which lhe leave of lhe Court was
obtained under section 17) which might have been brought
'Inserted hy a, 5 of the Insolvency Law (Amendment) Acl, 1950 (111 of 1950),

622 The Presidency-towns Insolvency Act, !909.
[Act III
(Part VIII.—Penalties.—Sections 102, J03.)
but for Lhe making of an order of adjudication under this Acl, lhe period from lhe
dale of ihc order of adjudication to the dale of the order of annulment shall be
excluded :
Provided that nothing in this section shall apply to any suit or other legal
proceeding in respect of a debt provable but not proved under this Act.
PART VIII
PENALTIES.
102. An undischarged insolvent obtaining credit to the extent of fifty rupees or

upwards from any person without informing such person that he is an undischarged
Undischarged in-
insolvent shall, on conviction by a Magistrate, be punishable wilh imprisonment for
solvent obtaining
credit.
a term which may extend to six months, or with fine, or wilh both.
103. Any person adjudged insolvent who—
(a) fraudulently wilh lhe intent lo conceal the state of his affairs or to
Punishment or defeat Lhe objects of (his Act,—
insolvent for certain
offences. 0') has destroyed or otherwise wilfully prevented or purposely withheld
the production of any book, paper or writing relating lo such of his
affairs as are subject to investigation under ihis Acl, or
( i t ) has kept or caused to be kept false books, or
(iii) has made false entries in, or withheld entries from, or wilfully
altered or falsified, any book, paper or wriling relating lo such of his
affairs as are subject to investigation under this Act, or
(b) fraudulently with intent to diminish the sum to be divided amongst his
creditors or of giving an undue preference lo any of lhe said
creditors,—
(i) has discharged or conccalcd any debt due lo or from him, or

( i f ) has made away with, charged, mortgaged or concealed any part of
his property of what kind soever,
shall on conviction be punishable with imprisonment for a term which may extend
to two years.
of 1909.]
(Pan VIII.—Penalties.—Sections 103A-105.)
1
103A. (7) Where a debtor is adjudged or readjudged insolvent under this
Act, he shall, subject to the provisions of this scction, be disqualified from—
Disquali-
(a) being appointed or acting as Magistrate; fications of
insolvent.
(b) being cleclcd to any office of any local authority where the
appointment to such office is by election, or holding or
exercising any such office to which no salary is attached; and
(c) being elected or silling or vol i ng as a memberof any 1 ocal
authority.
(2) The disqualifications which an insolvent is subject to under this section
shall be removed, and shall ceasc if—
(a) the order of adjudications is annulled under sub-section (1) of

section 2J, or
(b) he obtains from the Court an order of discharge, whether
absolute or conditional, with a certificate that his insolvency was
caused by misfortune without any misconduct on his pan.
(J) The Courl may grantor refuse such certificate as it thinks fits.
2
104. (1) where ihe Courl is satisfied, afler such preliminary inquiry, if any,
as it thinks necessary, that there is ground for inquiring into any offence referred to
in section 103 and appearing lo have been corrtmUied by lhe insolvent, the Court
may record a finding to lhat effect and make a complaint of the offence in writing ta
a Presidency Magistrate or a Magistrate of the first class having jurisdiction, and
such Magistrate shall deal with such complaint in ihe manner laid down in the Code
Procedure
of Criminal Procedure, 189B.
of charge
under sec-
(2) Any complaint made by the Courl under sub-section (I) may be signed
tion 103.
by such officcr of the Court as ihe Court may appoint in this behalf,
105. Where an insolvent has been guilty of any of the offences specified in
scction 102 or section 103, he shall nol be exempt from being proceeded against
Acl V of
therefor by reason thai he has obtained his discharge or that a composition or
IS98.
scheme of arrangement has been accepted or approved.
Criminal'
liability after
discharge or
composition.
[Act III
(Port fX.—Small Insolvencies.—Section 106.—Part X. —Special Provisions. —

Sections 107, 108.)
PART IX
SMALL INSOLVENCIES.
106. (7) Where lhe Court is satisfied by affidavit or otherwise, or the

official assignee reports to the Courl, that lhe property of an insolvenl is not likely
Summary
to exceed in value three thousand rupees ar such other less amount as may be
adminis-
tration in
prescribed, lhe Court may make an order that lhe insolvent's estate be administered
small in a summary manner, and thereupon lhe provisions of this Act shall be subjecL to
eases. lhe following modifications, namely :—
(ia) no appeal shall lie from any order of the Court, excepl by leave of the
Court;
(b) no examination of the insolvent shall be held except on lhe
application of a creditor or the official assignee;
(c) the estate shall, where practicable, be distributed in a single dividend;
(d) such other modifications as may be prescribed wilh lhe view of
saving expense and simplifying procedure :
Provided lhat nothing in ihis section shall permit the modification of the
provisions of this Acl relating Lo lhe discharge of the insolvenl.
(2) The Court may at any time, if il Ihinks fit, revoke an order for the
summary administration of an insolvent's estate.
PART X SPECIAL PROVISIONS.
107. No insolvency petition shall be presented against any corporation or

against any association or company registered under any enactment for the time
Exemption of being in forcc.
corpora- lion,
etc., from
insolvency
proceeding. 108. (7) Any creditor of a dcceascd debtor whose debt would have been
sufficient to support an insolvency petition against the debtor, had he been alive,
Administration in may present lo lhe Court within the limits of whose ordinary original civil
insolvency of
jurisdiction the debtor resided or carried on business for the greater part of the six
cslalc of person
dying insolvent. months immediately prior to his decease, a petition in the prescribed form praying
For an order for the administration of the deceased debtor under this Aci,
The Presidency-town Insolvency Act, 1909. 625
of 1909.]
(Part X.—Special Provisions.—Sections 109, 110.)

(2) Upon the prescribed notice being given to the legal representative of
the deceased debtor, the Coun may, upon proof of the petitioner's debt, unless the
Courtis satisfied that there is a reasonable probability that the estate will be
sufficient for ihe payment of the debts owing by the deceased, make an order for the
administration in insolvency of the deceased debtor's estate, or may upon cause
shown dismiss the petition wilh or without costs.
(3) A petition for a administration under this section shall not be
presented to the Court after proceedings have been commenced in any Court of
Justice for the administration of the deceased debtor's estate; but that Court may in
(hat case, on proof that the estate is insufficient to pay its debts, transfer the
proceedings to the Court exercising jurisdiction in insolvency under this Act, and
thereupon the last-mentioned Court may make an order for the administration of ihe
estate of the deceased debtor, and the like conscqucnces shall ensue as under an
administration order made on the petition of a creditor.
109. (/) Upon an order being made for the administration of a deceased
debtor's estate under section 108, the property of the debtor shall vest in the official
assignee of [he Court, and he shall forthwith proceed to realize and distribute the
same in accordancc with the provisions of this Acl.
Vesting or
(2) Wilh the modification hereinafter mentioned, all the provisions of Part estate and
HI, relating to the adminislraLion of the property of an insolvent, shall, so far as the mode ot ad-
min is [rat
same are applicable, apply to the case of such administration order in like manner as ion.
to an order of adjudication under this Act.
(J) In the administration of the properly of the deceased debtor under an
order of administration, the official assignee shall have regard lo any claims by the
legal representative of the deceased debtor to payment of the proper funeral and
testamentary expenses incurred by him in and about lhe debtor's estate; and those
claims shall be deemed a preferential debt under the order, and be payable in full,
out of the debtor's estate, in priority to all other dcbls.
(4) If, on the administration of the deceased debtor's estate, any surplus
remains in the hands of the official assignee after payment in full of all the debts
due from debtor, together wilh the costs of the administration and interest as
provided by ihis Act in case of insolvency, such surplus shall be paid over to the
legal representative of the deceased debtor's estate, or dealt with in such other
manner as may be prescribed.
110. (/) After notice of the presentation of a pctilion under section 108 no Payments or
transfer by
payment or transfer of properly made by the legal represent alive shad operate as a
legal repre-
discharge to him as between himself sentatives.
626 The Presidency-towns Insolvency Act. 1909.
[Act in
(Part X.—Special Provisions.—Section III.— Part XI.— Rules.—Section !)2.)
and the official assignee.

(2) Savcas aforesaid nothing in section 108 or section 109 or this section
shall invalidate any payment made or acl or thing done in good faith by the legal
representative or by a District Judge acting under the powers conferred on him by
section 64 of the Administrator-General's Acl, 1874, before the date of the order of
administration.
111. The provisions of sections 108,109 and 110 shall not apply to any n of
1B74.
case in which probate or letters or administration lo the estaie of a dcceascd debtor
Saving of have been granted to an Administrator-General.
jurisdiction
of Adminis- PART XI
trator-
R ULES.
Genera!.
112. (/) The Courts having jurisdiction under this Acl may from lime to
lime make rules7 [except in regard to Ihose matters to which section 112A applies.]
(2) In particular and without prejudice lo the generality of the foregoing
Rules. power, such rules may provide for and regulate—
8
(A) the fees and percentages (other than fees and preccniages chargeable by
lhe official assignee] to be charged under this Act and the manner in
which the same are to be collected and accounted for and the account
to which they we to be paid;
(c) the proceedings of the official assignee in taking possession

of and realizing the estates of insolvenl debtors;
[Clause (d) uw omitted by para. 2 and the Sch. of the Govt, of India
(Adaptation of Indian Laws) Supplementary Order, 1937. ]
(Pari XL—Rules.—Section ! 12A.)
(/) lhe proceedings to be taken in conncction wilh proposals for

composition and schemes of arrangement with ihc creditors of
insolvent debtors;
(ik) ihe intervention of the official assignee at the hearing of applications
and mailers relating to insolvent debtors and ihcir estates;
-(fat) filing of lists of creditors and debtors and the affording of
assistance to lhe Court by a petitioning debtor; (0 the examination by
lhe official assignee of the books and
papers of accounl of undischarged insolvent debtors; (m) the service
of noliccs in proceedings under this Act; 3 (mm) the form of the insolvency
notice under clause (a) and the manner in which such notice may be served
under clause (b), of sub-section (3) of section 9;
(n) the appointment, meetings and procedure of committees of inspection;
(o) the conduct of proceedings under this Act in the name of a firm;
( p ) lhe forms lo be used in proceedings under this Aci;
(q) ihc procedure to be followed in the case of estates to be
administered in a summary manner;
7
Inserted by s. (o) of ihe Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Bin. Aei
XVtlt or 1936)
5
Inserted by s. B(i>) (i), ibid.
The Presidency-town Insolvency Act, 1909. 627
of 1909.]
(r) the procedure to be followed imhe ease of estates of deceased persons to

be administered under this Act;
'[and, in the case of the .High Court at Madras, may also provide for and
regulate the remuneration of the official assignee and lhe payment of lhe costs,
charges and expenses of his establishment.]
6
5
112A, ( J ) The [Slate Government] may make rules for carrying into Power of
cffecL lhe objects of this Act in regard to those functions or the official assignee Siaic Gov-
ernment I D
which are discharged under the administrative control of lhe 6 [Slate Government].
moke rules.
(2) In particular and without prejudice to the generality of the foregoing
power, such rules may provide for and regulate—
(a) the fees and percentages to be charged by lhe official assignee for and in
respect of proceedings under this Acl and the manner in which the
same arc lo be collected and
[Act in
(Pari XI.—Rules.—Sections ! S3, 114.)
accounted for;
(b) the receipts, payments and accounts of the official assignee; Exemption
(c) ihe audit of the accounts of the official assignee; from duly
(d) the security to be given by the official assignee and his deputy or of transfers,
etc.. under
deputies; this Act.
(e) the distribution of work between ihc official assignee and his
deputy or deputies;
if) the conditions of service of lhe officers and servants of the
official assignee;
(g) the payment by the 9 [Stale Government] of sums under subsection The Gaicde to be
(2) of section 82, or under section 82Aor section 82B; (/i) lhe repayment evidence
by the official assignee of sums under section 82C;

(0 the maintenance of an account by the official assignee under sub-
section (/) of section 84 A and the payments to be made into such
account;
(/) the investment of sums by the official assignee under subsection (2) Swearing or affi-
of section 34A and the realization of such investments; davits.
(k) the transfer and payment by the official assignee of the' proceeds of
investments to the authority referred lo in subsection (4) of section
84A, and (i) the transfer and payment by the official assignee of
fees and percentages, and of commission o; other remuneration, lo
the authority referred to in section 125.
(5) Rules made under ihis section shall be published in the 1 [Official
Gazette] and shall thereupon have the same force and effect as if they had been
enacted in this Acl.
3
113. Rules made under the provisions4 [of scction 112] shall be subjcct
to the previous sanction of the ' [State Government.]
114. Rules so made and sanctioned shall be published ******* in Lhe 1
[Official Gazette],and shall thereupon have the same force and effect with regard
to proceedings under this Act in the Court which made them as if they had been
enacted in this Act.
(Part XII.—Supplemental.—Sections ! 15-117.) PART xn
SUPPLEMENTAL.
9
Subsliiuied Tor lhe former s. by pom. 3 and the Firsl Schedule, itiJ,
' Substituted for the words "oflhis Put" by s, lOofthc Prcsidcncy-iowns Insolvency (Bengal
Amendment) Act, 1936 (Ben. Act XVIII of 1936).
J
Thc words "in ihc Gazette uf India" were omilied by para. 3 and the First Schedule of ihe
Govern mem of India (Ad Dp ID Lion of Indian Laws) Order, 1937.
"The words "us the KSC may be" were omined, ibid.
'The words "the Provinces of India" were first substituted for Lhe words "British India" by para. 3
(J) and the Schedule of the Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.
Thereafter the word "States* was substituted Tor the word "Provinces" by para. 4(/) of ihe Adaptation of
Laws Order, 1950, and lhe words "of India" were omitted by para. 3 and the First Schedule of that Order.
'Substituted for the words 'a British Minister or British Consul or Political Agent" by para. 3 and
the First Schedule of (he Adaptation of Laws Order, 1950.
of 1909.]
115. U) Every transfer, mortgage, assignment, power-of-attorney, proxy

paper, certificate, affidavit, bond or other proceedings, instrument or writing
whatsoever before or under any order of the Court, and any copy thereof, shall be
exempt from payment of any stamp or other duty whatsoever.
(2) No Stamp-duty or fee shall be chargeable for any application made by
the official assignee to the Court u nder this Acl, or for the drawing and issuing of
any order made by the Court on such application.
116. (/) A copy of the Official Gazette containing any noticc inserted in
pursuance of this Act shall be evidence of the facts stated in the noticc.
(2) A copy of the Official Gazette containing any noLice of an order of
adjudication shall be conclusive evidence of (he order having been duly made, and
of its date,
. 117. Any affidavit may be used in a Court havingjurisdiction under this Act if it is
sworn—
. (a) in '[the States], before— -
(0 any Court or Magistrate, or
V of (iii) any officer or other person appointed to administer oaths under
IMS
the Code of Civil Procedure, 1908;
(ib) in England, before any person authorized to administer oaths in His
Majesty's High Court of Justice, or in the Court of Chancery of the
County Palatine of Lancaster, or before any Registrar of a Bankruptcy
Court, or before any officer of a Bankruptcy Court authorized in
writing in that behalf by the judge of the Court or before a Justice of
the Peace for the country or place where it is sworn;
(c) in Scotland or in Ireland, before a Judge Ordinary, Magistrate or Justice
of the Peace; and
(</) in any other place, before a Magistrate or Jucticc of the Peace or other
person qualified to administer oaths in that place (he being certified to
be a Magistrate or Justice of ihe Peacc, or qualified as aforesaid, by 2
[an Indian Consul or Political Agent] or by a notary public).
[Act in
(Port XII.—Supplemental.—Sections 113-123.)
118. (/) No proceeding in insolvency shall be invalidated by any formal

Forma] defect defect or by any irregularity, unless lhe Court before which an objection is made to
not (o invali- ' lhe proceeding is of opinion that substantial injustice has been caused by ihe defect
date proceed- or irregularity, and that the injustice cannot be remedied by any order of thai Court.
ings.
(2) No defect or irregularity in the appointmeni of an official assignee or
member of a commiLlee of inspection shall vitiate any act done by him in good
faith.
119. Where an insolvent is a trustee wilhin the Indian Trustee Act, 1866,
scction 35 of lhat Acl shall have effect so as lo authorize the appointment of a new
Applicatio trustee in substitution for the insolvent (whether voluntarily resigning or not), if it
n of appears expedient lo do so, and all provisions of that Acl, and of any other Acl
Trustee relative thereto, shall have effect accordingly.
Acl to in-
120. Save as herein provided, the provisions of ihis Act relating lo the
solvency
trust ee, remedies againsi lhe properly of a debtor, the priorities of debts, the effect of a
composition or schcme of arrangement, and the effect of a discharge shall bind the '
[Government].
Certain pio-
121. Nothing in this Act, or in any transfer of jurisdiction effecled thereby,
vijions to bind
ihe
shall take away oraffccl any right of audience lhal any person may have had
Government. immediately before the commencement of ihis Act, or shall be deemed to confer
such right in insolvency matters on any person who had not a right of audience
Savings Tor
before ihc Courts for the Relief of Insolvent Debtors.
existing rights
or audience.
122. Where the official assignee has under his control any dividend which
has remained unclaimed for fifteen yean from the dale of declaration or such less
period as may be prescribed, he shall pay the same to lhe account andcrcdit of2 [the
Slate Government], unless the Court otherwise directs.
Lapse and
123. Any person claiming to be entitled to any monies paid to the account
credit to
Government or and credit of :[ihe Slate Government] under scction 122, may apply io the Court for
unclaimed an order for payment to him of the same; and the Court, if satisfied lhat lhe person
dividends. claiming is entitled, shall make an order for payment to him of the sum due :
Claims to
Provided lhat, before making an order for the payment of a sum which has
monies been carried to the account and credit of 2[lhe Slate Government], Ihc Court shall
credited to causc a notice to be served on such
Governme
nt under
section
122,
of 1909.]
(Part XIL—Supplemental.—Sections 124-127.)
officcr as '[ [he Stale Government] may appoint in this behalf, calling on the
officcr to show causc, within one month from the date of the service of the
notice, why the order should not be made.
124. {/) No person shall, as against the official assignee, be entitled lo Access io
withhold possession of lhe books of accounts belonging lo the insolvent or lo set insolvent's
books.
up any lien [hereon.
(2) Any creditor of the insolvenl may, subjcci io the control or the Court,
and on payment of such fee. if any, as may be prescribed, inspccl al all
reasonable limes, personally or by agent, any such books in the possession of the
official assignee,
125. - (/) Such fees and percentages shall be charged for and in Fees and
percentages
respect of proceedings under this Acl as may be prescribed. .
2
(2) The official assignee shall transfer and pay to such authority and in such
manner and at such times as may be prescribed in this behalf all fees and percentages received by
him after the commencement of the Prcsidency-lowns Insolvency (Bengal Amendment) Acir
1936, and the same shall be carried lo lhe account and credit of lhe 1 [Slate
Ben Acl
Government),
XVttl of 2
1936. (5) Any percentages or commission or other remuneration received by
the official assignee if appointed as a trustee in a composition or as agent of
another official assignee shall be similarly so transferred and paid by him.
126. All Courts having jurisdiction under this Acl shall make such
orders and do such things as may be neccssary io give cffeci tu seclion 118 of the
Bankruptcy Act, 1883, and lo scction 50 of ihe
hi or 1907. Provincial Insolvency Acl, 19074; Conns to
he auxi-
46 and 47
Meetings of
127. s* * * * * * liary *lo(2)' * * * The proceedings under an insolven
Vict., c, 52.
Credit OR. n and 12 die Indian Insolvency Act, 1848, pending at the commencement of.this each
Vict., c. 21. Act shall, except so far as any provision of (his Act is expressly applied ■ to other.
pending proceedings, continue, and all the provisions of the said Indian Insolvency Act
shall, except as aforesaid, apply thereto, as if this Act had not been passed. Saving.
Summoning of
meetings.
(The First Schedule.—Meetings of Creditors.—rules J-8.) THE FRIST SCHEDULE
Notice of
meetings (iSee section 26.)
MEETINGS OF CREDITORS.
1. The official assignee may al any time summon a meeting of creditors, and shall do
Duty of in-
so whenever so directed by the Court or by the creditors by resolution at any meeting or
solvent to whenever requested in writing by one-fourth in value of the creditors who have proved.
attend if 2. Meetings shall be summoned by sending notice of the time and place thereof to
required.
each creditor at the address given in his proof, or, if he has not proved, at lhe address given in
the insolvent's schedule, or such olher address as may be known lo the official assignee.
Proceedings 3. The notice of any meeting shall be sent off not less than seven days before lhe day
not to be avo- appointed for lhe meeting and may be delivered personally or sent by prepaid post letter, as
ided for non-
may be convenient. The official assignee may, if he thinks fit, also publish the lime and place
ruccipt of
notice.
Proof of issue
of notice.
Costs of
meeting.
Chairman.
[Act in
of any meeting in local newspaper or in lhe 10 [Official Gazette].

4. Il shall be the duly of ihe insolvent to attend any meeting which the official assignee,
may, by notice, require him to attend, and any adjournment [hereof. Such notice shall be either
delivered lo him personally or sent to him al his address by post at least Ihree days before lhe
date fixed for the meeting.
5. The proceedings held and resolutions passed at any meeting shall, unless lhe Court
otherwise orders, be valid notwithstanding that any creditor has not received the notice sent lo
him.
6. A certificate of the official assignee that lhe notice of any meeting has been duly
given shall be sufficient evidence of such notice having been duly sent to the person to whom
the same was addressed.
7. Where on the request of creditors lhe official assignee summons a meeting, there
shall he deposited with the written request the sum of five rupees for every twenty creditors for
lhe costs of summoning the meeting, including all disbursements : Provided that the official
assignee may require such further sum to be deposited as in his opinion shall be sufficient to
cover lhe costs and expenses of the meeting.
8. The official assignee shall be the chairman of any meeting.
10
Subsitutcd for Lhe words "local Official Gazelle" by para. 4 (/) of llic Adaptation of Laws Order, 1950, ■
of 1909.]
The Presidency-towns Insolvency Act, J 909. 633
(The First Schedule.—Meetings of Creditors.—rules 9-17.)
9. A creditor shall nol be entitled to voLe al a meeting unless he has duly proved a
Right to vote.
debt provable in insolvency lo be due to him from lhe insolvent, and lhe proof has been
duly lodged one clear day' before the time appointed for the meeting.
10. A creditor shall not vole at any such meeting in rcspect of any unliquidated or
contingent debt, or any deb I the value of which is noi ascertained. No vole in
res peel of certain
11. For lhe purpose of voting, a secured creditor shall, unless he surrenders his debts.
security, slate in his proof lhe particulars of his security, the date when it was given, and
the value at which he assesses it, and shall be entitled to vote only in respcct of (he Secured creditor.
balance, if any, due to him after deducting the value of his security. If he votes in respect of
his whole debt, he shall be deemed to have surrendered his security, unless the Coun on
application is satisfied thai the omission to value the security has arisen from inadvertence.
12. Where a creditor seeks lo prove in respect of a bill of exchange, promissory note,
or other negotiable instrument or security on which the insolvent is liable, such bill of exchange,
note, instrument or security must, subject to any special order of the Court made lo the contrary,
be produced to the official assignee before the proof can be admitted for voting. ■
13. Il shall be competent to the official assignee, within twenly- eight days after a
Proof in
proof estimating the value of a security has been made use of in voting at any meeting, to
respcct of
require the creditor to give up the security for the benefit of the creditors generally, on negotiable
payment of the value so estimated. instrument
s.
14. If one partner in a firm is adjudged insolvent, any creditor to whom Lhat
partner is indebted jointly wilh the other partners in the firm, or any of them, may prove
his debt for the purpose of voting at any meeting of creditors and shall be entitled lo vote
thereat.
Power to require
15. The official assignee shall have power to admit or reject a proof for the creditor to give up
purpose of voting, but his decision shall be subject lo appeal to lhe Court. If he is in doubt security.
whether the proof of a creditor should be admitted or rejected, he shall mark the proof as
objected to, and shall allow lhe creditor to vote, subject to the vote being declared invalid
Proof by
in the event of the objection being sustained.
partner.
16. A creditor may vote cither in person or by proxy.
17. Every instrument of proxy shall be in the prescribed form and shall be issued
by lhe official assignee. Power of official
assignee lo admit
or reject proof.
Codc-44,
ProJty.
Instrument
of proxy.
634 The Presidency-towns insolvency Act, 1909.
[Act HI
(The First Schedule.—Meetings of Creditors.—rules 18-22.— The Second Schedule,—Proof of
Debts.—rules i-6.)
18. A creditor may give a general proxy lo his attorney or to his manager or clerk, or
any other person in his regular employment. In such case lhe instrument of proxy shall slate
General the relation in which Lhe person to act thereunder slands to the creditor.
proxy.
19. A proxy shall not be used unless il is deposited with the official assignee one
clcar day before the tim& appointed for the meeting at which it is to be used.
20. A creditor may appoint the official assignee lo acl as proxy.

Proxy lo be
deposited one 21. The official assignee may adjourn the meeting from lime to time and from
day before due
placc to place, and no notice of the adjournment shall be neccssary.
or marling.
Official assignee as 22. The official assignee shall draw up a minute of the proceedings al the meeting
proiy. Adjournment
and shall sign the same.
of meeting.
THE SECOND SCHEDULE
Minute of (iSee section 48)

proceedings.
PROOK OF DEBTS Proofs in ordinary cases
1. Every creditor shall lodge the proof of his debt as soon as may be afier the making of
an order of adjudication.
2. A proof may be lodged by delivering or sending by posl in a registered letter to lhe

official assignee an affidavit verifying the debt.
3. The affidavit may be made by the creditor himself or by some person authorized by
or on behalf of the creditor. If made by a person so authorized, it shall state his authority and
means of knowledge.
Time for
lodging proof. 4. The affidavit shall contain or refer to a statement of account showing the
particulars of the debt, and shall specify (he vouchers, if any, by which the same can be
Mode of
lodging proof.
substantiated. The official assignee may at any time call for the production of the vouchers.
5. The affidavit shall slate whether the creditor is or is not a secured creditor.
Auihorily in 6. A creditor shall bear the cost of proving his debt unless the Court otherwise
make affidavit.
specially orders.
Comenb of affi
davil.
Affidavit io
siaic ir creditor
holds security.
Cost of proving
debts.
of 1909.]
(The Second Schedule.—Proof of Debts.—rules 7—} 3.)

7. Every crcdilor who has lodged a proof shall be entitled to see and examine lhe
proofs of other creditors al all reasonable times. Right to see
8. A creditor in lodging his proofs shall deduct from his debt all trade discounts, and Maminc
proof.
but he shall not be compelled to deducL any discount, not exceeding Five per centum on
Deduction <o
the net amount of his claim, which he may have agreed to allow for payment in cash.
be made from
Proof by secured creditors pioqf.
9. If a secured creditor realizes his security, he may prove for the balance due to
him, after deducting the net amount realized.
10. If a secured creditor surrenders his security to lhe official assignee for the Proof where se-
curity realized.
general benefit of the creditors, he may prove Tor his whole debt.
11. If a secured creditor does noi either realize or surrender his security, he shall, Proor where
before ranking for dividend, slate in his proof the particulars of his security, the date when security is
surrendered.
it was given and the value at which he assesses il, and shall be entitled lo receive a dividend
only in respect of the balance due to him after deducting the value so assessed. Proof in other
eases.
12. (/) Where a security is so valued the official assignee may at any lime redeem
it on payment to lhe creditor of assessed value.
(2) If the official assignee is dissatisfied wilh ihe value at which a security is
assessed, he may rquire that ihe property comprised in any security so valued be offered for
sale ai such times and on such terms and conditions as may be agreed on between the
creditor and the official assignee, or as, in default of agreement, the Court may direct. If the Valuation of
sale is by public auction, the crcdilor, or the official assignee on behalf of the estate, may sceuriiy.
bid or purchase:
Provided that the creditor may at any lime, by notice in writing, require the official
assignee to eleel whether he will or will nol exorcise his power of redeeming lhe security or
requiring il to be realized, and if the official assignee does nol, within six months after receiving
the notice, signify in writing to lhe creditor his election lo exercise the power, he shall not be
entitled to exercise il; and lhe equily of redemptions or any oiher interest in lhe properly
comprised in the security which is vested in the official assignee, shall vest in ihe creditor, and
the amount of his debt shall be reduced by the amount at which the security has been
valued. . Amendment of
valuation.
13. Where a creditor has so valued his security, he may al any lime amend ihe
valuation and proof on showing to the satisfaction of the official assignee, or the Courl, that lhe
valuation and proof were made bona fide on a mistaken estimate, or that lhe security has
636 The Presidency-towns insolvency Act; 7909.
[Act
m
(The Second Schedule.—Proof of Debts.—rules 14-18.)
diminished or increased in value since its previous valuation; but every such amendment shall
be made al the cost of the creditor, and upon such terms as the Court shall order, unless lhe
official assignee shall allow lhe amendment without application to the Court.
14. Where a valuation has been amended in accordance with lhe foregoing rule, the
creditor shall forthwith repay any surplus dividend which he has received in excess of thai to
Refund of excess which he would have been entitled on the amended valuation, or, as the case may be, shall be
received.
entitled to be paid out of any money for the time being available for dividend, any dividend or
share of dividend which he has failed to receive by reason of the inaccuracy of the original
valuation, before that money is made applicable to the payment of any future dividend, but he
shall not be entitled to disturb lhe distribution of any dividend declared before lhe date of lhe
amendment-
15. If a creditor after having valued his security subsequently realizes it, or if il is
realized under the provisions of rule 12, lhe net amount realised shall be substituted for lhe
amount of any valuation previously made by the creditor and shall be treated in all respects as an
amended valuation made by the creditor.
Amendment
where security
16. If a secured creditor does not comply with lhe foregoing rules, he shall be excluded
subsequently from all shares in any dividend.
realized.
17. Subject to the provisions of rule 12, a creditor shall in no case receive more than
sixteen annas in lhe rupee and interest as provided by Ihis Act.
Exclusion from Taking accounts of properly mortgaged, and of the sale thereof
sharing in
dividend. 18. Upon application by any person claiming to be a mortgagee of any part of lhe
Limit of insolvent's real or leasehold estate and whether such mortgage is by deed or otherwise, and
receipt.
whether the same is of a legal or equitable nature., or upon application by lhe official assignee
wilh the consent of such person claiming to be a mortgagee as aforesaid, the Court shall proceed
to inquire whether such person is such mortgagee, and for what consideration and under what
circumstances; and if it is found that such person is such mortgagee, and if no sufficient
Inquiry into
objection appears to the title of such person to the sum claimed by him under such mortgage, the
mortgage, etc. Court shall direct such accounts and inquiries lo be taken as may be necessary for ascertaining
the principal, interest and costs due upon such mortgage, and of lhe rents and profits, or
dividends, interest or other proceeds received by such person, or by any other person by his
order or for his use in case he has been in possession of the property over which the mortgage
extends, or any part thereof, and the Court, if satisfied that
of 1909.]
(The Second Schedule.—Proof of Debts.—rules 19-23.)
there ought lo be a sale, shall (Erect noticc lo be given in such newspapers as the
Court thinks fit, when and where, and by whom and in what way, lhe said
premises or properly, or lhe interest therein so mongaged. are to be sold, and lhal
such sale be made accordingly, and .
lhal lhe official assignee 11 [{unless it is otherwise ordered for reasons to be
recorded in writing)) shall have the conduct of such sale; but it shall not be
imperative on any such mortgagee to make such application, At any such sale
the mortgagee may bid and purchase.
19. All proper parties shall join in lhe conveyance to lhe pur- Conveyance, chaser, as the
Court directs.
20. "Die monies to arise from such sale shall be applied, in the Proceeds of sale, first place, in
payment of lhe costs, charges and expenses of and
occasioned by the application lo the Court, and of such sale and the commission
(if any) of lhe official assignee, and in the next place in payment and
satisfaction, so far as the same extend, of what shall be found due lo such
mortgagee, for principal, interest and costs, and lhe surplus of the sale monies (if
any) shall then be paid to the official assignee. But if the monies to arise from
such sale are insufficient to pay and satisfy what is so found due to such
mortgagee, then he shall be entitled to prove as a creditor for such deficiency,
and receive dividends ihereon rateably with lhe other creditors, but so as not lo
dislurb any dividend then already declared.
-
21. For the belter taking of such inquiries and accounts and Proceedings on making a title to
[he purchaser, all parties may be examined by the inquiry.
Court upon interrogatories or otherwise as the Court thinks fit, and
shall produce before ihe Court upon oath all deeds, papers, books and writings in
their respective custody or power relating to the estate or effects oF the insolvent
as the Court directs.
Periodical Payments .
22. When any rent or other paymenl falls due at stated periods, Periodical payments
and the order of adjudication is made at any time other than one of those periods,
lhe person entitled lo the renl or payment may prove for a proportionate part
thereof up to the dale of (he order as if the rent or paymenl due grew from day to
day.
Interest
23. V ) On any debt or sum certain whereon interest is not interest, reserved or agreed for,
and which is overdue when the debtor is adjudged an insolvent, and which is provable under this Act,
the creditor may prove for interest at a rate not exceeding six per centum per annum— .
(c) if the debt or sum is payable by virtue of a written instalment at a certain time, from lhe -time
when such debt
11
Substituted for the words and brackets "(unless ii is olfienvise ordered)' by s, 12 of Lhe
Presidency-towns Insolvency (Bengal Amendment) Act. 1936 (Ben. Act XVJIT of 1936),
[Act in
(The Second Schedule.—Proof of Debts.—rules 24-27.— The Third Schedule.)
or sum was payable to the dale of such adjudication; or

(b) if the debt or sum is payable otherwise, from lhe time when a demand in writing has been
made giving the debtor notice thai interest will be claimed from lhe date of the demand
until lhe time of payment to the date of such adjudication.
(2) Where a debt which has been proved in insolvency includes interest or any pecuniary
consideration in lieu of interest, lhe interest or consideration shall, for the purposes of dividend, be
calculated at a rale not exceeding six per centum per annum, wilhouL prejudice to the right of a creditor
to rcceive out of the debtor's csiale any higher rate of interest to which he may be entitled after all [he
debts proved have been paid in full.
Debt payable at a future time
24. A creditor may prove for a debt and payable when the debtor is adjudged an insolvent as if
it were payable presently, and may receive dividends equally with the other creditors, deducting (here-
from only a rebate of imerest at the rale of six per centum per annum. computed from the declaration of
a dividend to the time when the debt would have become payable, according (o lhe lerms on which il
was contracted.
Admission or rejection of proofs
25. The official assignee shall examine every proof and lhe grounds of the debt, and
Debt payable in in writing admit or reject it in whole or in part, or require further evidence in support of it. If he
future. rejects a proof, he shall state in writing lo the creditor the grounds of the rejection.
26. If the official assignee thinks that a proof" has been improperly admitted the Court may, on
lhe application of the official assignee, after notice io the creditor who made the proof, expunge ihe
proor or reducc its amount.
27. The Court may also expunge or reduce a proof upon Ihe application of a creditor if the
official assignee declines to interfere in lhe malter, or in the case of a composition or scheme upon the
application of the insolvent.
Admission or THE THIRD SCHEDULE.—[Enactments repealed,]—Rep. by s.J and Sch. H of the
rejection of
Repealing and Amending Act, 1914 (X of 1914.)
proof.
'The words "lhe Royal Indian Navy" were first substituted for the words "His Majesty's Royal Indian
Marine Scrvicc" by para, 3 and lhe First Schcdulu of lhe Government of India (Adaptation of Indian Laws) Order.
1937. Thereafter lhe words "the Indian Army or Navy" were substituted Tor lhe words "ihc Army or Navy or of ihe
Coun may Royal Indian Navy" by para. 3 and ihc First Schedule of (he Adaptation of Laws Order, 1950,
expunge proof 'These sections were substituted for original s. 81 by s, 4 of the Presidency- towns Insolvency (Bsngal Amend men
improperly I) Acl, 1936 (Ben. Act XVIll of 1936).
received. . The seciion which was substiiuied is is fallows, namely:—
"81, (/) Such remuneration shall be paid to the official assignee as may be prescribed.
Power Tor Coun

to expunge or
reduce proof.
of 1909.]
1
Inserted by s ? of lhe Presidency-town Insolvency (Amendment) Acl, (920 (XI of
1920).
-Subsliiutcd by s. 9 of the Insolvency (Amendment) Acl, 1926 (IX of 1926).
3
Clauses (ii), (<fl, M, if). 0?). (A). (0 an J Or) were omitted by s. 8 (b)(ii),ibid. The clauses which were a mined arc
is follows, namely :—
"(ii) the investment, whclher separately or collectively. of unclaimed dividends, b at ances and other sums appertaining to
(hecslalos of insolvenl debtors, whether adjudicated insolvent under this or any former cnaccment; and ihe application of ihe proceeds
of such investment
M) the remuneration of the official assignee;
(?) the ruecipts, payments and at counts of die official assignee;
(/) the audit of the accounts of the official assignee;
(p) the payment o f I he re mu n cratio n of the o fflcial ossi gnee, of the c os I s. ch arges and expenses of his establishment,
and of the costs of (he audit of his accounts out of lhe proceeds or ilie investments in his hands;
[h) the payment of the coils incurred in the prasccution of fraudulent debtors and in legal proceedings taken by the official
assignee under lhe direction or the Court out of the proceeds aforesaid:
(/') lhe payment of any civil liability incurred by an official assignee acting under the order or direction of the Court;
(i) Ihcdistribulionorv/ork be; ween the official assignee and his deputy or deputies;",
[Act in
' See fooi-noic 3 on page 626 , nine.

1
Inserted by s. 5 or lhe Presidency-1 owns Insolvency (Amendment) Acl. 1927 (XtX of 1927).
'Clause (mm) was inscriuJ by s. 2(b) of ihe Insolvency Laws (Amendment Am.
1978 (Acl 28 of 1978).
Mnscrccd by para. 2 and (he Sell, of ihc Govemmcnl or India (Adapt a I ton of Indian laws) Suppllcmcniary Order. 1937.
'Scction II2A was inserted by s, 9 of lhe Prcsidency-iowns tnsolvcncy (Bengal Amendmcni) Act. 1936 (Ben. Acl. XVIlt of
1936).
6
See fool-note 2 on page 613, ante.
1
See loot-note 2 On page 613, tunc.
Substituted for the words "local official Gazette" by para4(/)ofthc Govern men i of India (Adapaiaiion or Indian Laws)
Order, 1937.
of 1909.]
1
Substituted for the word "Crown" by para. 4 ( ! ) of ihc Adaptation of Laws Orrici,
1950.
'The Words "the Provincial Government" were first substituted far Lhe words "the Govemmcnl of India" by para. 3 and the
First Schedule of the Government of India (Adaptation oflndian Laws) Order, 1937. Thereafter, the word ."Slate" was substituted for
the word "Provincial" by para. 4 (/) of (he Adaptation of Laws Order, 1950.
'The words "the Provincial Govcrnmeni" were substituted for (he words "lhe Governor-General of
India" by para, 3 .Tnd the Firs* Schedule or the Coi crnnteni of India (Adaptation of Indian Laws) Order, 1937.
Thereafter, the word "Sine" was subsliluled for the word "Provincial" by parL 4 (/) of ilie Adapiaiion of Laws
Order. 1950
'Seclion 125 v.1 as rc-numbcrud as sub-section (J) of lhal section and after that scction. as so re-
numbered, sub-section (2) and (3) were added by s, 11 or ihe Presidency- towns Insolvency (Bengal Amendment)
Acl. 1936 (Ben, Acl XVItl of 1934). >Sre fool-nolc 2 on page 613, ante.
'See now the Provincial Insolvency Act, 1920 <V of 1920).
1
Sub-sect ion (/) and ihe words "Noiwilhs landing the repeal effected by litis Acl." in sub-sec lion (2) W
LIU icpcalcd by s. 3 and Sch. II of ihe Repealing nnH Amending Act. 1914 (X of 1914).
[Act in

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ACT M OF 1909

(THE PRESIDENCY-TOWNS INSOLVENCY ACT, 1909.)

CONSTITUTION AND POWERS OF COURT.

3. Courts having jurisdiction in insolvency.

PROCEEDINGS FROM ACT OF INSOLVENCY TO DISCHARGE.

4. All matters in rcspcct of which jurisdiction is given by this Act shall

(Par! I!.—Proceedings from acl of Insolvency 10 Discharge,—

(Part 11— Proceedings from act of Insolvency to Discharge-

(Pari I!.—Proceedings from act of Insolvency so Discharge- Section 10.)

Explanation.-Tbe presentation of a petition by the debtor shall be

'See foot-note 1 on page 585. ante.

'Aildtsd by s. 2 of the Insolvency Law (Amendment) Acl, 1950 (III of 1950).

(Pan II.-Proceedings from act of Insolvency to Discharge.- Section 14.)

(Part li—Proceedings from act of Insolvency to Discharge- Sections 15-17.)

(Part II.—Proceedings from acl of Insolvency to Discharge.- Sections 18-19.)

(Part II.-Proceedings from act of Insolvency to Discharge. - Sections 20-23.)

f Part II.—Proceedings from act of Insolvency to Discharge.—

(Pari II—Proceedings from act of Insolvency to Discharge.— Sections 28, 29.)

(Part II.—Proceedings from act of Insolvency to Discharge- Sections 30, 31.)

(Part 11.—Proceedings from act of Insolvency to Discharge,—

'See Tool-noie 2 oil page 584, ante.

(Part 11.—Proceedings from act of Insolvency to Discharge.— Sections 37, 38.)

'Substituted by s. 4 of ihe Presidency-lowis Insolvency (Amendment) Acl. 1927 (XIX of

(Pari fl—Proceedings from act of Insolvency to Discharge.—

CPart II.—Proceedings from act of Insolvency to Discharge — Sections 40—

(Part II.—Proceedings from act of Insolvency to Discharge.— Sections 43—45.)

(Pari III.—Administration of Property.—Section 46.)

'See now Ih'- Code of Criminal Procedure, 1973 {2 of 1974).

(Part III.—Administration of Property.—Sections 47—49.)

or money's worth, whether the payment is, as rcspecls amount, fixed or

(Pari III.—Administration of Properly.—Sections 50—52.)

{ 4 ) In lhe case of partners, the partnership property shall be applicable

(Part III.—Administration of Property.—Sections 53. 54.)

(Pari III.—Administration of Property.—Sections 55—58,)

56. (1) Every transfer of property, every

(а) any payment by Lhe insolvent to any of his creditors;

(б) any payment or delivery lo the insolvent;

(<r) any transfer by the insolvenl for valuable consideration; or

(Pari III.—Administration of Property.—Sections 59, 60.)

(Part 111.—Administration of Property.—Sections 61-64.)

(Pari III.—Administration of Property.—Sections 65, 66.)

as may be allowed by the Court, declined or neglected to give noticc that he

(Part 111—Administration of Properry.-Sections 67-69.)

(Pari ///, —Administralion of Property.—Sections 70 —72.)

(c) disputed proofs or claims; and

(Part HI.—Administration of Property.—Sections 73—76.)

(Part IV.—Official Assignees—Section 77.)

'Substituted Tor the original sub-section by s 5 ( a l of the Presidency-towns Insolvency

(Part IV.—Official Assignees.—Sections 78—80.)

(Part IV.—Official Assignees.Sections 81—82.)

from recovering any sum paid by lhe 3 [State Government]

Act, 1936 (Ben. Act XVltl of 1936),

(Part IV.—Official Assignees ____ Section SS.)

Provided lhal a creditor, who is appointed a member of a commillee of

{Part VI.—Procedare.—Sections 90, 91.)

91. Where two or more insolvency petitions are presented coiwolitta-

(Pari VI,—Procedure.—Sections 92—98.)

(Part VI.—Procedure.—Sections 99, J00.—Part VII.—Limitation.— Sections 10!, I0IA.)

'Inserted hy a, 5 of the Insolvency Law (Amendment) Acl, 1950 (111 of 1950),

(Part VIII.—Penalties.—Sections 102, J03.)