DEBT CONCILIATION ORDINANCE

Arrangement of Sections

1. Short title.

THE BOARD

2. Establishment and constitution of the Board.

3. Conduct of business.

4. Appointment of Secretary and other officers and servants.

5. Repealed.

6. Remuneration of members of the Board.

BRANCH BOARDS

7. Establishment of Branch Boards.

8. Constitution of Branch Boards.

9. Conduct of business by Branch Boards.

10. Remuneration of members of Branch Boards.

11. Delegation of powers by the Board to a Branch Board.

SPECIAL PROVISIONS RELATING TO MEMBERS OF THE BOARD AND OF BRANCH BOARDS

12. Penalty on member for hearing, considering application in which he has an interest.

13. Members to be public officers.

APPLICATION TO THE BOARD BY A DEBTOR OR CREDITOR

14. Application by debtor or creditor.

15. Mode of application.

16. Affidavits.

17. Particulars to be set out in debtor's application.

18. Particulars to be set out in creditor's application.

POWERS AND DUTIES OF THE BOARD AND PROCEDURE
TO BE FOLLOWED ON RECEIPT OF APPLICATION

19. Applications involving matters already the subject of pending actions.

19A. Applications in respect of debts purporting to be secured by conditional transfers of immovable property.

19B. Prohibition of the sale, alienation of any immovable property to which an application entertained by the Board in respect of a debt referred to in section 19A relates.

20. Effect of insolvency proceedings on applications to the Board.

21. Matters to be taken into consideration by the Board.

21A. Matters to be considered in deciding whether or not a conditional transfer of immovable property is in reality a mortgage.

22. Return of application for amendment.

23. Fixing of date for preliminary hearing of application.

24. Preliminary hearing of application.

25. Action where Board decides to attempt to effect a settlement with secured creditor or creditors.

26. Action where Board decides to attempt to effect a settlement with all creditors secured and unsecured.

27. Action when Board decides not to attempt to effect a settlement.

28. Hearing of application.

29. Order for issue of certificate, failure of creditor to submit a statement of debts or to appear at hearing of application.

30. Amicable settlement.

31. Settlement with secured and unsecured creditors.

32. Dismissal of application and grant of certificate where creditor refuses to agree to reasonable settlement.

33. Provisions relating to settlements.

34. Appointment of manager or trustee to give effect to settlement.

35. Registration of notice of proceedings under the Ordinance.

36. Rights of secured creditor who is not a party to a settlement unaffected such settlement.

37. Power of Board to decide dispute.

38. Signature of agent to bind debtor or creditor as the case may be.

39. Effect of certificate.

40. Effect of settlement.

PROCEDURE SUBSEQUENT TO SETTLEMENT

41. Registration of settlement.

42. Certified copy of settlement to court for such bank or other institution as the Minister may specify.

43. Application to court for a decree in terms of settlement and entry of decree nisi.

44. Decree absolute.

REFERENCE BY COURT

45. Reference by court.

46. Procedure on reference by a court.

47. Hearing before Board on reference.

48. Decree to be entered by court in terms of the order, decision or settlement under section 47.

SPECIAL PROVISIONS RELATING TO PROCEEDINGS BEFORE THE BOARD

49. Procedure before the Board.

50. Application of certain provisions of the Civil Procedure Code to proceedings under this Ordinance.

51. Appearance of parties.

52. Exemption of certain documents from stamp duty.

CASES STATED FOR OPINION OF COURT OF APPEAL

53. Power of Board to state case on question of law for opinion of Court of Appeal.

REVIEW OF DECISIONS OF THE BOARD

54. Power of Board to review its order.

MISCELLANEOUS

55. Bar against execution of decree.

56. Bar of civil actions.

57. Compliance with provisions of Ordinance not to be an act of insolvency or a fraudulent preference within the meaning of the Insolvency Ordinance.

58. Computation of period of prescription for suits and proceedings.

59. Certified copies of settlements.

60. Evidence of acts of the Board.

61. Ordinance not to apply to debts due to the State and prescribed persons or bodies.

62. Regulations.

63. Date of operation of regulations.

64. Interpretation.

39 of 1941,

40 of 1941,

9 of 1943,

41 of 1973,

43 of 1952,

5 of 1959,

24 of 1964,

19 of 1978,

20 of 1983,

29 of 1999.

AN ORDINANCE to provide for the establishment of a Debt Conciliation Board in Sri Lanka and for other matters connected with or incidental to such establishment.

[Date of Commencement: 15th November, 1941]

1. Short title.

This Ordinance may be cited as the Debt Conciliation Ordinance.

The Board

2. Establishment and constitution of the Board.

(1) For the purposes of this Ordinance there shall be established a Board to be called the Debt Conciliation Board of Sri Lanka which shall consist of five members appointed by the Minister, one of whom shall be nominated by the Minister to be Chairman of the Board.

(2) The Chairman of the Board shall be—

(a) a person who holds or has held a substantive appointment as a Judge of the Court of Appeal or as a District Judge; or

(b) a person who is or has been a member of Class I of the Sri Lanka Administrative Service and who holds or has held office as a District Judge; or

(c) an attorney-at-law of not less than fifteen years' standing.

(3) Of the four other members of the Board—

(a) at least one shall be an attorney-at-law of not less than fifteen years' standing; and

(b) at least one shall be a person engaged in trade or commerce in Sri Lanka and recommended by the Minister for appointment as a member of the Board.

(4) The Chairman and every other member of the Board shall hold office for a period of three years from the date of his appointment:

Provided that notwithstanding the term of any such appointment, the Chairman or any other member of the Board may at any time—

(a) resign from his office; or

(b) be removed from office by the Minister;

Provided, further, that any person who is appointed to the Board to fill any vacancy caused by the resignation or removal from office of any member of the Board shall hold office during a period equal to the unexpired portion of the term of office of the member in whose place he is appointed and no longer.

(5) Any member of the Board who is absent without reasonable cause from three consecutive meetings of the Board may, by resolution of the Board passed at a meeting of which due notice has been given in the prescribed manner, be held to have vacated his office; and upon the passing of any such resolution, the member affected by that resolution shall cease to be a member of the Board.

(6) Any person ceasing to be a member of the Board shall be eligible for re-appointment thereto.

3. Conduct of business.

(1) The Chairman shall preside at all meetings of the Board at which he is present. In the absence of the Chairman from any meeting, the members present at the meeting may elect one of their own numbers to be Chairman at that meeting:

Provided, however, that if at any time it appears to the Chairman that he will be unable to discharge his duties for a period exceeding one week by reason of ill health or other sufficient cause, the Chairman shall nominate a member of the Board temporarily to exercise and perform all the powers and duties of the Chairman until the resumption of duties by him.

(2) Three members shall constitute a quorum of the Board.

(3) If at any meeting the Board is divided in opinion as to the decision to be given on any point or matter, such point or matter shall be decided according to the opinion of the majority of the members present; but if the members are equally divided, then the opinion of the Chairman shall prevail.

(4) The Board may regulate its own procedure in any matter not provided for in this Ordinance or by regulation.

4. Appointment of Secretary and other officers and servants.

For the purpose of carrying out the provisions of this Ordinance, the Public Service Commission may appoint—

(a) a person by name or by office, to be or to act as Secretary of the Board; and

(b) such other officers and servants as may be necessary for that purpose.

[S 4 subs by s 2 of Act 24 of 1964.]

5. .

[Rep by s 3 of Act 24 of 1964.]

6. Remuneration of members of the Board.

Regulations may be made providing for—

(a) the payment of fees to any or all of the members of the Board for attendance at meetings of the Board and the rates at which such fees shall be computed;

(b) the payment of an allowance in respect of travelling done by any or all of the members of the Board outside the Municipal limits of the town of Colombo in the discharge of their duties as members of the Board, and the rates at which such allowance shall be computed;

(c) the payment of subsistence and an allowance in respect of travelling done by any or all of the members of the Board resident outside the Municipal limits of Colombo for attendance at meetings of the Board and the rates at which such allowances shall be computed.

[S 6(c) ins by s 2 of Act 19 of 1978.]

Branch Boards

7. Establishment of Branch Boards.

The Board may from time to time establish such number of branch debt conciliation Boards as may be necessary—

(a) to advise and assist the Board in any matter on which the advice and assistance of the Branch Board is sought by the Board;

(b) to deal, as hereinafter provided, with any one or more applications referred to the Branch Board by the Board.

8. Constitution of Branch Boards.

(1) Every Branch Board shall consist of a Chairman and such number of other members appointed by the Board, not exceeding four and not being less than two, as the Board may determine.

(2) The Chairman of each Branch Board shall be a member of the Board and shall be—

(a) a person who holds or has held a substantive appointment as a Judge of the Court of Appeal or as a District Judge; or

(b) a person who is or has been a member of Class I of the Sri Lanka Administrative Service and who holds or has held office as a District Judge; or

(c) an attorney-at-law of not less than fifteen years' standing.

(3) Of the other members of each Branch Board—

(a) at least one shall be an attorney-at-law of not less than fifteen years' standing; and

(b) at least one shall be a person engaged in trade or commerce in Sri Lanka and approved by the Minister for appointment as a member of a Branch Board.

(4) Any member of a Branch Board may at any time—

(a) resign from his office on the Branch Board;

(b) be removed from office by the Board.

(5) Any person ceasing to be a member of a Branch Board shall be eligible for re-appointment thereto.

9. Conduct of business by Branch Boards.

(1) The Chairman of a Branch Board shall preside at all meetings of the Branch Board.

(2) A Branch Board shall have such quorum as may be prescribed.

(3) The procedure to be followed at the meetings of the Branch Board shall be prescribed.

10. Remuneration of members of Branch Boards.

Regulations may be made providing for—

(a) the payment of fee to any or all of the members of a Branch Board for attendance at meetings of the Branch Board and for any work done and the rates at which such fees shall be computed;

(b) the payment of an allowance in respect of travelling done by any or all of the members of a Branch Board in the discharge of their duties as members of a Branch Board, and the rates at which such allowance shall be computed; and

(c) the payment of subsistence and an allowance in respect of travelling done by any or all of the members of a Branch Board resident outside the area where the Branch Board has been constituted, for attendance at meetings of the Branch Board, and the rates at which such allowances shall be computed.

[S 10 subs by s 3 of Act 19 of 1978.]

11. Delegation of powers by the Board to a Branch Board.

(1) The Board may at any time, in respect of any one or more applications received by it, delegate to any Branch Board powers by the Board to a branch all or any of its powers under this Ordinance.

(2) Every delegation under this section shall be made by order in writing under the hand of the Chairman of the Board and shall specify the powers so delegated and the particular application or applications in respect of which such delegation is made; and, upon such delegation, it shall be lawful for the Branch Board to exercise in respect of such application or applications the powers so delegated in all respects as if it were the Board.

Special Provisions Relating to Members of the Board and of Branch Boards

12. Penalty on member for hearing, considering application in which he has an interest.

Any member of the Board or of a Branch Board who participates in any discussion on, or in the consideration, hearing, or determination of, any application or other matter before the Board or the Branch Board, as the case may be—

(a) where the applicant or any other party is a debtor or creditor of his or is in partnership with him or in his employ; or

(b) where he has a pecuniary interest in the property or assets of the debtor or of a creditor,

shall be guilty of an offence and shall be liable on conviction before a Magistrate to a fine not exceeding one thousand rupees or, in default of payment, to imprisonment of either description for a period not exceeding three months.

13. Members to be public officers.

Every member of the Board and of a Branch Board shall be deemed to be a public officer within the meaning of the Penal Code.

Application to the Board by a Debtor or Creditor

14. Application by debtor or creditor.

(1) A debtor may make an application to the Board to effect a settlement of the debts owed by him to all his secured creditors or any one or more of them.

(2) Any secured creditor of any debtor may make an application to the Board to effect a settlement of the debts owed to him by that debtor.

(3) Where an application has been made to the Board under subsection (1) or subsection (2) in respect of any debt owed by any person, and another application under either of those subsections is made to the Board in respect of any other debt owed by that person, the Board may order that the applications be consolidated.

15. Mode of application.

Every application under the preceding section shall be in writing, signed by the applicant, and shall be forwarded to the Board in the prescribed manner, together with such affidavits as may be requisite to furnish prima facie proof of the material facts set out or alleged in the application.

16. Affidavits.

Every affidavit submitted under section 15 shall contain a statement of only those facts to which the declarant is able of his own knowledge and observation to testify:

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