[1][THE
KERALA INSOLVENCY RULES, 1959 By virtue of the provisions of
section 83 of the Insolvency Act, 1955 (Act II of 1956) and of all other powers
thereunto enabling the High Court with the previous sanction of the Government
an supersession of all rules previously issued on the subject, hereby makes the
following rules for carrying into effect the provisions of the said Act,
namely:- (a)
These Rules may be called 'The Kerala Insolvency Rules,
1959". (b)
They shall apply to all proceedings under the Insolvency Act, 1955
in any court subordinate to the High Court of Kerala. (c)
They shall come into force on the date of publication in the
Gazette and shall apply to all proceedings thereafter instituted and, as far as
may be, to all proceedings then pending. The forms mentioned in these
rules are the forms in the Appendix hereto and shall be used with such
variation as circumstances may require. (1)
In these Rules unless the context otherwise; requires:- (a)
'the Act' means the Insolvency Act, 1955 (Act II of 1956); (b)
'the Court' includes a Receiver when exercising the powers of the
Court in accordance with Section 84 of the Act; (c)
'Receiver' means a Receiver appointed by the Court under Section
58 of the Act; (d)
'Interim Receiver' means a Receiver appointed by the Court under
Section 20 of the Act; (e)
'Proved debt' means the claim of a creditor so far as it has been
admitted by the Court. (2)
Save as otherwise provided all words and expressions used in these
rules shall have the same meaning as those assigned to them in the Act. (1)
Every petition, application, affidavit or order in any proceeding
under the Act or under these Rules shall be headed by a Cause -Title as in Form
No. 1. (2)
Except in cases which are to be administered summarily the
petitioner shall at the time of making the petition deposit a sum of Rs. 25 to
meet the expenses incidental to the adjudication. [2][(3) x x
x] (4) A debtor's petition shall be in Form No. 2 and
a creditor's petition shall be in Form No. 3. (1)
When an insolvency petition presented by a creditor is admitted,
the creditor shall within seven days thereafter furnish copies of the petition
for service on the debtors and on such other person to whom the court may order
notice. The Chief Ministerial Officer of the Court shall sign the copy or
copies, if on examination he finds them to be correct. (2)
The copy shall be served together with the notice of the order
fixing the date for hearing the petition on the debtor and on such other person
to whom the Court orders notice, Within a week after the date on
which the debtor is adjudged an insolvent on the application of a creditor, or
within ten days of the admission of a petition by a debtor, or within such
further time as the Court may order in either case, the debtor shall file an
affidavit in Form No. 4 giving full correct and true particulars of all his
assets with a specification of the value of all property not consisting of
money. In the case of immovable property he will give the survey or re-survey
numbers of properties, the boundaries thereof, the names of the persons in
possession of the properties, the terms of the lease if the properties have
been leased out, and the rent due and the encumbrances, if any, with detailed
description of the date and amount of each encumbrance. If the property is only
a portion of the survey field, its boundaries, shall be described. With regard
to book-debts particulars as to the amounts due, the rate, of interest and the
time at which the debt is likely to get time-barred shall be given. As regards
outstandings due to the debtor, the document by which the outstanding is
evidenced, the date and amount of the debt, the address of the debtor, the rate
of interest payable thereon, as also the date of a my payments made for
interest or principal which will save limitation, as well as the date on which
the claim or the debt is likely to become barred by limitation, shall be given.
The debtor shall also state the solvency or otherwise of his debtors. Along with the affidavit, the
debtor shall produce all the title deeds of his properties, account books and
documents evidencing his outstandings. If he is not in possession of the title
deeds he shall give detailed information s regards the dated of the documents,
the nature of the title deeds, the executants of the documents-whether
registered or not-and the names of the persons in whose custody they are. If a debtor against whom an
insolvency petition has been admitted dies before the hearing of
the petition, the Court may order that notice of the order fixing the date
for hearing the petition shall be served on his legal representative or on such
other person as the Court may think fit in the manner provided for the service
of summons. (1)
Unless otherwise ordered all claims shall be provided by affidavit
in Form No. 5 in the manner provided in Section 50 of the Act; provided that
before admitting any claim the court may call for further evidence. (2)
The affidavit may be made by the creditor or by some one
authorised by him; provided that if the deponent is not the creditor, the
affidavit shall state the deponent's authority and means of knowledge. (3)
If in any case there are numerous claims for wages for workmen and
others employed by the debtor it shall be sufficient if one proof of all such
claims is made either by the debtor or by some other person on behalf of all
such creditors. Such proof shall be in Form No. 6. (4)
As soon as may be after proof of any debt is tendered, the Court
shall, by order in writing, admit the creditor's claim in whole or in part, or
reject it; provided that where a claim is rejected in whole or in part the
order shall state briefly the reasons for the rejection,. (5)
A copy of every order rejecting a claim or admitting it in part
only, shall be sent by the Court by registered post, to the person making the
claim within seven days from the date of the order. (1)
As soon as the schedule of creditors has been frameda copy thereof
shall, if a Receiver or Interim Receiver has been appointed, be supplied to him
and all subsequent entries and alterations made, therein shall be communicated
to the Receiver or Interim Receiver. (2)
A copy of the schedule so prepared shall be posted in the
Court-house. (3)
Public examination of debtor. At the time of passing the order of
adjudication, the Court shall fix date directing the debtor to appear before
the Official Receiver. On such date and adjourned date the Official Receiver
shall hold a public examination of the debtor as to his conduct, dealings and
property after notice to all creditors who have tendered proof of their debts.
Notice to creditors shall be sent by post registered for acknowledgment or
shall be served personally or in such manner as the Official Receiver may think
fit. The debtor shall be examined on oath and it shall be his duty to answer
all questions which the Official Receiver or the creditors or their pleaders
may put to him. The notes of the examination shall be taken down in writing by
the Official Receiver in English and shall be read over or explained to the
debtor and his signature obtained. Such notes may be used thereafter in
evidence against him and shall be open to inspection by any creditor who has
tendered proof of his debts at all reasonable times. If the debtor fails to appear on
such date or on adjourned dates, the Official Receiver shall be at liberty to
apply to Court for necessary directions. (1)
If a debtor submits a proposal under Section 36 (1) of the Act the
Court shall fix a date for consideration of the proposal, and notice thereof in
Form No. 7 together with a copy of the terms of the proposal, shall be sent to
every creditor who has proved. (2)
At the meeting for the consideration of the proposal, the debtor
shall be entitles to address the Court in person or by pleader in support of
the proposal and every creditor who has proved; shall be entitled in person or
by pleader to question the debtor and to address the Court. (1)
Every appointment of a Receiver or Interim Receiver shall be by
order in writing in Form No. 8 and shall be signed by the Court. A copy of this
order sealed with the seal of the Court shall be forwarded to the person
appointed. (2)
Every Receiver or Interim Receiver other than the Official
Receiver shall be required to give such security as the Court thinks fit. (3)
An Official Receiver who has furnished security: in accordance
with the terms of his appointment shall not be required to furnish any other
security. (4)
Any party to the proceedings may apply to the Court upon notice to
the Official Receiver and the insolvent that the appointment of the Official
Receiver may be aside or that a Special Receiver may be appointed in his place. (1)
The Court may remove or discharge any Receiver or Interim Receiver
other than an Official Receiver and any Receiver or Interim Receiver so removed
or discharged shall, unless the Court otherwise orders, deliver up and assets
of the debtor in his hands and any books; accounts on other documents relating
to the debtor's property which are in his possession or under his control to
such person as the Court may direct, (2)
If an order of adjudication is annulled the Receiver (if any)
shall, unless the court otherwise orders, deliver, up any assets of the debtor
in his hands and any books, accounts or other documents relating to the
debtor's property which are in his possession or under his control to the
debtor or to such other person as the Court may direct. Every Receiver or Interim
Receiver shall be deemed for the purpose of the Act and of these rules to be an
Officer of the Court. (1)
Every application to the Court made by a Receiver or Interim
Receiver shall be in writing. (2)
The Court may order that notice of any application by the Receiver
or Interim Receiver and of the date fixed for the hearing of the application
shall be sent by Registered Post to all creditors who have proved. (1)
The remuneration of Receivers or Interim Receivers other than
Official Receivers shall be in such proportion to the amount of the dividends
distributed, as the Court may direct; provided that it does not exceed five per
centum of the amount of the dividends. (2)
If a Receiver has been appointed in an insolvency proceeding in
which the Court makes an order approving a proposal under Section 40 of the
Act, the remuneration to be paid to the Receiver shall be fixed by the Court
and the order approving the proposal shall make provision for the payment of
the remuneration and shall be subject to the payment thereof. (3)
The apportionment of remuneration as between more than one
Receiver shall be decided by the Court according to the quantity of work done
by each. (1)
Unless the Court other wise directs the Receiver or Interim
Receiver shall as soon as may be after his appointment, and in any case before
the hearing of the debtor's application for discharge, draw up a report upon
the cause of the debtor's insolvency, the conduct of the debtor so far as it
may have contributed to his insolvency, and also his conduct during the
insolvency proceedings in all matters connected with such proceedings, and in
particular such report shall state (a)
whether the value of the debtor's assets if less than half his
unsecured liabilities and if so, whether that fact is due to circumstances for
which the debtor cannot justly be held responsible, (b)
whether the debtor has omitted to keep such books of accounts as
are usual and proper in the business carried on by him and as are sufficient to
disclose his business transactions and financial position within three years
immediately preceeding his insolvency, (c)
whether the debtor has continued to trade after knowing himself to
be insolvent, (d)
whether the debtor has contracted any debt provable under the Act
without having at the time of contracting it any reasonable or probable ground
of expectation that he would be able to pay it, (e)
whether the debtor has failed to account satisfactorily for
any loss of assets, to for any deficiency of assets to meet his liabilities, (f)
whether the debtor has brought on, or contributed to his
insolvency by rash and hazardous speculations or by unjustifiable extravagence
in living or by gambling or by culpable neglect of his business affairs, (g)
whether the debtor has within three months preceding the date of
the presentation of the petition, when unable to pay his debts as they became
due, given an undue preference to any of his creditors, (h)
whether the debtor has on any previous occasion been adjudged an
insolvent or made a composition or arrangement with his creditors and (i)
whether the debtor has concealed or removed his property or any
part of it, or has been guilty of any other fraud or fraudulent breach of
trust. (2)
If the debtor submits a proposal under section 39 (1) of the Act
the Receiver shall state in his report whether in his opinion the proposal is
reasonable and is likely to benefit the general body of the creditors, and
shall state the reasons for his opinion. Unless the Court otherwise
directs the debtor shall furnish the Receiver or Interim Receiver or, if a
Receiver or Interim Receiver has not been appointed, the Court, with a trading
account, and an account showing all moneys and securities paid, disposed of or
encumbered or recovered by or from the debtor or on his account, and his income
and the source hereof for such period as the Receiver or Interim Receiver, or,
if a Receiver or Interim Receiver has not been appointed, the Court may direct;
provided that the Receiver or Interim Receiver shall not without the previous
sanction of the Court, direct the debtor to furnish accounts for more than two
years before the day of the presentation of the insolvency petition. (1)
The Receiver or Interim Receiver shall keep a cash book and such
books and other papers as are necessary to give a correct view of his
administration of the estate, and shall submit his accounts in such times in
and in such forms as the Court may direct, Such accounts shall be audited by
such person or persons as the Court may direct. The costs of the audit shall be
fixed by the Court and shall be paid out of the estate. (2)
The accounts of Official Receivers shall be audited annually by
the Examiner of Local Fund Accounts. The costs of such audit calculated at the
rate of 75 naye Paise for one hundred rupees on the amount realised since the
last audit of the estate concerned, shall be paid by the Official Receiver from
such amount and, in case a distribution thereof to creditors is ordered in any
year before the audit has taken place shall be reserved for such payment from
the amount otherwise available for distribution. (1)
No dividend shall be distributed by a Receiver without the
previous sanction of the Court. (2)
Notice in Form No. 9 or Form No. 10 as may be appropriate, that a
distribution of a dividend has been sanctioned shall be sent by the Receiver
or, if there is no receiver, by the Court, to every creditor who has proved a
debt, by registered post within one month from the date of the order
sanctioning the distribution. (3)
The amount of any dividend due to a creditor may at his request
be transmitted to him by postal money order at his risk and expense and,
if the amount does not exceed Rs. 25, shall be so transmitted, unless he
appears to claim it in person or by duly authorised agent before the Receiver
or, if there is no Receiver, before the Court within three months from the date
of the order sanctioning the distribution of the dividend. (4)
An order shall not be made under section 68 of the Act without
giving the Receiver an opportunity to show cause why the order should
not be made. (1)
An application for discharge shall not be heard until after the
schedule of creditors has been framed. (2)
Every creditor who has proved shall be entitled in person or by
pleader to appear at the hearing and oppose the discharge; provided that he has
served upon the insolvent and upon the Receiver (if any) not less than seven
days before the date fixed for the hearing, a notice stating the grounds of his
oppositions to the discharge. (3)
A creditor who has not served the prescribed notices shall not
unless the court otherwise directs, be permitted to oppose the discharge of the
debtor; and a creditor who has served the prescribed notices shall not be
permitted, unless the court otherwise directs, to oppose the discharge on any
ground not specified in the notice. (4)
The hearing of the application the Court may her any evidence
which may be tendered by a creditor or by the Receiver and also any evidence
which may be tendered on behalf of the debtor and shall examine the debtor, if
necessary, for the purpose of explaining any evidence tendered and may hear the
Receiver, the debtor in person or by pleader, and any creditor, in person or by
pleader. (1)
The notices to be given under Sections 19 (2), 31, 38 (2), 39 (1)
and 42 (1) of the Act shall be published in the Gazette in English and in the
language of the Court and in such other manner, if any, as the court may
direct, and the copies of the notices in English and in the language of the
Court shall be affixed to the notice board of the Court. Such notices shall be
in Form Nos. 11, 12, 13, 7 and 14 respectively. (2)
The notices to be given under Sections 19 (2), 39 (1) and 42 (1)
of the Act shall be published and affixed in the manner provided in sub-rule
(1) not less than fourteen days before the date fixed for the hearing of the
application, the consideration of the proposal, or the hearing of the
application for discharge as the case may be. (3)
Notice of the fixed for the hearing of an insolvency petition
under section 19(1) of the Act shall be sent by the Court by registered post,
if the petition is by the debtor to all creditors mentioned in the petition and
if the petition is by a creditor, to the debtor less than fourteen days before
the said date. (4)
The notice to be given under Section 34 (3) of the Act shall be
served only on the debtor and on the creditors who have proved their debts and
may, if the Court so directs, be served on any or all such creditors by
registered post. (5)
Notice of the date fixed for the consideration of a proposal under
section 39 (1) of the Act shall be sent by registered post to all creditors who
have rendered proof of their debts not less than fourteen days before the said
date. (6)
Notice of the date fixed for the hearing of an application for
discharge under Section 42 (1) of the Act shall be dispatched by the Court by
registered post to all persons whose names have been entered in the schedule of
creditors not less than fourteen days before the said date. (7)
The notice to be given under Section 67 of the Act shall be sent
by the Receiver by Registered post to all persons whose claims to be creditors
have been notified but not proved not less than one calendar month before the
limit of time fixed for proving claims. Such notice shall be in Form No. 15. (8)
It shall not be necessary to give notice of the date to which the
hearing of a petition or of an application for discharge or the consideration
of proposal is adjourned. (9)
The notice of an order of adjudication to be published
under-Section 31 of the Act shall contain a statement that creditors should
prove their claims as soon as possible and that claim may be-proved by
delivering or sending by registered post to the Court Official Receiver, as the
case may be, and affidavit in Form No. 5. (1)
All proceedings under this Act down to and including the making or
an order of adjudication shall be at the cost of the party prosecuting them;
but when an order of adjudication has been made the costs of the petitioning
creditor including the costs of the publication of all gazette notices required
by the Act or Rules, which by the Act or Rules, the petitioning creditor is
required to pay, shall be taxed and be payable out of the estate. (2)
Before making an order in an insolvency petition presented by a
debtor, the Court may, require the debtor to deposit in Court a sum sufficient
to cover the costs of the sending the prescribed notices of the hearing of
petition and the costs of the publication of all gazette notices required by
the Act or Rules which, by the Act or Rules, the debtor is required to pay. (3)
The cost of the publication in the gazette of:- (a)
an order fixing the date for the hearing of an insolvency petition
under section 19 (2) of the Act shall, when the petition, is by the creditor,
be paid by the creditor, and when the petition is by the debtor, be paid out of
the sum deposited in court by the debtor under the foregoing sub-rule. (b)
notice of proposal for a composition under section 39 (1) of the
Act and notice of an application for discharge under section 42 (1) of the Act
shall be paid by the debtor. (4)
(i) The actual cost of publishing in the Gazette of:- (a)
notice of adjudication under section 31 of the Act; and (b)
notice of an order annulling an adjudication under section 38 (2)
of the Act shall be collected from the person who petitions in insolvency. (ii) The postal charges plus 25
per cent shall be collected from the insolvent's estate in respect of notices
under section 67 of the Act to creditors whose claims have been notified but
not proved. (5)
No costs incurred by a debtor in respect of an application to
approve a composition or scheme shall be allowed out of the estate if the Court
refuses to approve the composition or scheme. (6)
If the assets available are not sufficient in any case for taking
proceedings necessary for the administration of the estate, the Receiver or
Interim Receiver or Official Receiver, as the case may be, may call upon the
creditors or any of them to advance the necessary funds, or to indemnify him
against the costs of such proceedings. Any assets realised by such proceedings
shall be applied in the first place, towards the repayment of such advances,
with interest thereon at 6 per cent per annum. If the Court makes an order under
section 78 of the Act that the debtor's estate be administered in a summary
manner:- (a)
the petition and all subsequent proceedings shall be
endorsed "Summary Case". (b)
the Receiver or Interim Receiver shall not carry on the business
of the debtor under clause (c) of section 61 of the Act, nor institute any suit
under clause (d) of the said section, nor accept as the consideration for the
sale of any property of the debtor a sum of money payable at a future time
under clause (f), nor mortgage nor pledge any part of the property of the
debtor under clause (g). All insolvency proceedings may be
inspected at such times and subject to such restrictions as the Court may prescribe,
by the Receiver or Interim Receiver, any debtor, any creditor who has proved,
or any legal representative on their behalf. [x x x x][3] All Official receivers shall
maintain registers of (1) insolvency petitions received, (2) a dividend
register, (3) a register of assets, (4) a document register (inventory) (5) a
diary, (6) a hearing book. (7) a register of leases, (8) a register of initial
charges met from contingencies (9) a register of instruments impounded, (10) a
ledger, (11) a register of sale deeds and (12) a register of advances made to
pleaders in Forms Nos. 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, and 30
respectively appended to these rules, [4][xxx] Expenditure incurred by an
Official Receiver and his staff on journeys undertaken for the purpose
administration will be recoverable by the Official Receiver from the assets of
the estate or estates concerned in accordance with the rules made by the High
Court from time to time in that behalf. (1)
When any petition, notice or other document is signed by a firm of
creditors or debtors in the firm's name, the partner signing for the firm shall
add also his own signature in the manner, "B and Co. , By A. B, a partner
in the said firm. " (2)
Any petition or notice of which personal service is necessary
shall be deemed to be duly served on all members of the firm if it is served at
the place of business of the firm in India upon any one of the partners of upon
any person having at the time of service the control or management of the
partnership business there. (3)
When a firm of debtors files an insolvency petition, the same
shall contain the names in full of the individual partners, and, unless it is
signed be all of them, it shall be accompanied by the affidavit of the partner
signing it all the partners concur in the filing of the same. (4)
When a creditor files an insolvency petition against a firm, the
same shall state the names of the individual partners so far as the same are
known to the petitioner, and the debtors shall together with their schedule of
affairs file an affidavit setting out the names in full of the individual
partners. "XXV. Maintenance of Registers by Courts. All Courts shall maintain
registers of (1) insolvency petitions received and (2) insolvency petitions
disposed of in form Nos. 16 and 17. They shall also submit to the High
Court on the 15th day after close of each quarter a return of all proceedings
in insolvency in form No. 18. Special particulars should be given therein of
the arrears of petitions filed under sections 4, 54 and 55 of the Act". "They shall also submit to
the High Court on the 15th day after the close of each quarter a return of all
proceedings in insolvency in Form No. 18" (5)
An order of adjudication shall be made against the partners
individually. (6)
The debtors shall submit a schedule of the partnership affairs and
each debtor shall submit a schedule of his separate affairs. (1)
In any case in which the Court authorised the creditors to appoint
a Committee of inspection pursuant to section 71 of the Act, the creditors (who
have proved their debts) may at meeting duly convened for the purpose by
resolution, appoint from among the creditors, or the holders of general proxies
or general powers of attorney from such creditors, a committee of inspection
for the purposes of superintending the administration of the Insolvent's
properties by the Official Receiver. The Committee of Inspection shall consist
of not more than five, nor less than three persons. (2)
Meetings of the Committee of Inspection shall be held monthly at
such time and place as they shall appoint and shall ordinarily be held in the
chambers of the Official Receiver. The Official Receiver or any members of the
Committee may also call a meeting of the Committee as and when he thinks
necessary. The Official Receiver shall be present at all such meetings. (3)
The Committee of Inspection may act as majority of their members
present at a meeting but shall not act unless a majority of the Committee is
present at the meeting. (4)
Any member of the Committee may resign his office by notice in
writing signed by him and delivered to the Official Receiver. (5)
If a member of the Committee becomes insolvent or compounds or
arrange with his creditors or is absent for frive consecutive meetings of the
Committee, his office shall there upon become vacant. (6)
Any member of the Committee may be removed by an ordinary
resolution at any meeting of the creditors of which seven day's notice has been
given stating the object of the meeting. (7)
On a vacancy occurring in the office of a member of the Committee,
the Official Receiver shall forthwith summon a meeting of creditors for the
purpose of filling the vacancy and the meeting may by resolution appoint
another creditor or other person eligible as above to fill the vacancy. (8)
The continuing members of the Committee, provided there be not
less than two such continuing members, may act notwithstanding a vacancy in
this body, and where the number of members of the Committee is for the time
being less than five, the creditors may increase that number so that it does
not exceed five. (9)
When a committee has been appointed under section 71 of the Act,
the Official Receiver shall, in the administration of the property of the
insolvent, and in the distribution thereof amongst his creditors, have regard
to any directions that may be given by resolution of the creditors at any
general meeting, or by the Committee of Inspection, and any direction so given
by the creditors at any general meeting, shall, in case of conflict be deemed
to override any directions given by the Committee of Inspection. (10)
When a Committee has been appointed under section 71 of the Act,
the Official Receiver shall consult the Committee before applying to the Court
for leave to do any of the things for which such leave is required by section
61 of the Act. (11)
In all cases in which a Committee has been appointed, leases and
sales of property by the Official Receiver shall, unless the Court otherwise
directs, be submitted for the approval of the Committee before confirmation.
Should the Committee decline to approve the proposal of the Official Receiver
the matter shall be submitted to the Court which shall finally decide it. (12)
No defect or irregularity in the appointment of a member of a
Committee of Inspection shall vitiate any Act done by him in good faith. (13)
The Official Receiver shall submit the record book and cash book
together with any other requisite books and vouchers, to the Committee of
Inspection (if any) when required, and not less than once every three months. (14)
The Committee shall suggest to the Official Receiver means for realising
the assets. If any suggestion so made are found unworkable, it shall be open to
the Official Receiver to refer them to the Court and the order of the Court
shall be final. (15)
The Committee shall, not less than once in every three months
audit the accounts and certify therein under their hands the day on which the
said accounts were audited. The certificate shall be in Form No. 32 with such
variations as circumstances may require. (16)
No member of the Committee of Inspection of an estate, while so
acting shall except by leave of the Court, either directly, or indirectly by
himself or any partner, clerk, agent or servant, become purchaser of any part
of the estate. Any such purchase made contrary to the provisions of this rule,
may be set aside by the Court either on its own motion or on the
application of any person interested. (17)
No member of a Committee of Inspection of an estate shall, except
with the sanction of the Court, directly or indirectly, by himself, or any
employer, partner, clerk, agent, or servant, be entitled to derive any profit
from any transaction arising out of the insolvency or to receive out of the
estate any payment for services rendered by him inconnection with the
administration of the estate, or for any goods supplied by him to the Official
Receiver for or no account of the Estate. If it appears to the Court that any
profit or payment has been made contrary to the provisions of this rule, the
Court may direct or order the recovery of the same. (18)
When the sanction of the Court under the preceding sub-rule to a
payment to a member of the Committee of Inspection for services rendered by him
in connection with the administration of the estate is obtained, the order of
the Court shall specify the nature of the services, and sanction shall only be given
when the service performed is of a special nature. No payment shall under any
circumstances be allowed to a member of a committee for services rendered by
him in the discharge of the duties attaching to his office as a member of such
committee. (19)
When the Official Receiver carries on the business of the debtor
he shall keep) a distinct account of the trading and shall incorporate in the
cash book in Form No. 31 the total weekly amount of the receipts and payments
on such trading account. (20)
The trading account shall from time to time and not less than once
in every month, be verified by affidavit, and the Official Receiver shall
thereupon submit such amount to the Committee of Inspection (if any) or such
member thereof as may be appointed by the Committee for that purpose, who shall
examine and certify the same. (21)
The Official Receiver shall be present on all meetings and shall
keep a record of the proceedings. Unless otherwise directed or
resolved by the committee of Inspection (if any) or ordered by the Court, the
Official Receiver shall not engage an auctioneer to sell the insolvent's
property. In all suits of proceedings by or
against the Official Receiver there shall be inserted in the plaint or petition
after his official title the description "as receiver of the property of
an insolvent" naming the particular insolvent. (1)
All amounts remaining unclaimed by creditors after the expiry of
the periods mentioned below, from the date of receipt by them of the notice of
declaration of dividend or of each dividend if there be more than one will
lapse to the Government. (a)
when the amount does not exceed Rs. five-One year. (b)
in all other cases-Three years. (2)
All amounts remaining to the credit of estate of insolvents in the
deposits of the Official Receivers, in Government Treasuries, which do not
command any assets to admit the payment of a dividend for a period of three
years from the date of adjudication will lapse to the Government. (3)
(i) All balances remaining to the credit of estates of insolvents
in the deposits of the Official Receivers in Government Treasuries which
have not been increased or diminished by any transaction for 3 complete account
years will lapse to the Government. (ii) Disbursements cannot be
recognised as transactions under clause (i) unless they are made in the
bonafide administration of the estate. One of the tests of their being so will
be the regularity and promptitude with which the administration of the estate
in question is being carried on. (4)
At the close of each financial year, every Official Receiver shall
send to the court concerned a statement in duplicate of all amounts mentioned
in sub-rules (1) to (3) which will lapse to the Government. (5)
The Court may for sufficient reasons to be recorded in writing
sanction the retention in deposit of any item included in such list for any
additional period and after excluding such items, forward on or before the 15th
of April each year, one copy of the statement to the Comptroller and the other
copy to the Treasury Officer concerned. Due intimation should be given to the
Official Receiver by the Court concerned of all those items which have been
sanctioned to be retained in the deposit and the period therefor. Such sanction
does not perclude the lapsing of such after the expiry of such period in the
absence of further orders retention before or after the expiry of the period
already sanctioned. (6)
All sums mentioned in the list forwarded by the Court under the
sub-rule (5) will be credited to the Government and can be repaid to the
parties entitled thereto or otherwise made available for payment only in
accordance with the provisions contained in Arts, 679, 680 and 698 of the
Travancore Financial and Account Code.THE
KERALA INSOLVENCY RULES, 1959
PREAMBLE