INSOLVENCY ORDINANCE

Arrangement of Sections

1. Short title.

2. Cession bonorum abolished.

3. Judges may make rules.

4. District Courts to be auxiliary to each other for proof of debts and taking examinations.

5. Appeals to Court of Appeal.

6. Omitted.

ACTS OF INSOLVENCY IN GENERAL

7. Acts of insolvency.

8. Conveyance by a person of all his property to trustees not an Act of insolvency, unless petition for sequestration is filed within three months.

9. Lying in prison for twenty-one days, and escaping out of prison, Acts of insolvency.

10. Filing declaration of insolvency an Act of insolvency.

11. Compounding with petitioning creditor an Act of insolvency.

12. Defendant not paying, securing, or compounding for a judgment debt within thirty days after notice an Act of insolvency.

13. Person disobeying order of court for payment of money after service of peremptory order an Act of insolvency.

14. Notice of acts of insolvency to agents of corporate bodies.

15. No person liable upon an Act of insolvency committed more than twelve months before petition.

PROCEEDINGS BEFORE THE ESTATE OF ANY PERSON IS ADJUDGED INSOLVENT

16. Proceedings to originate by petition.

17. Court of Appeal may direct petition to be prosecuted in any District Court.

18. Petitioning creditor's debt though payable at a future time and security given.

19. Petition by public officer of certain co-partnership.

20. Person may petition against himself.

21. If adjudication be not obtained within three days after petition, any other creditor may proceed on it.

22. Petitions may be presented against one or more partners in a firm; and petitions against two or more may be dismissed as to one without affecting the others.

23. If one member of a firm be insolvent, a petition against the others shall be filed in the same court.

24. After petition filed, if the insolvent be about to quit Sri Lanka or to remove or conceal his goods, he may be arrested and his goods seized.

25. Court, before adjudication, may summon witnesses to prove act of insolvency.

ADJUDICATION OF THE ESTATE OF ANY PERSON AS INSOLVENT, AND THE PROCEEDINGS FOR SECURING THE PROPERTY AND SURRENDER OF THE INSOLVENT

26. Adjudication, and upon what proof.

27. Attachment upon the estate and how to be made.

28. Attachment of personal property how to be made and as to penalty for defeating the same.

29. If petitioning creditor's debt insufficient court may proceed upon the application of any other creditor.

30. Insolvent to have notice of adjudication and to be allowed a certain time to show cause against it before advertisement. Adjudication may, with insolvent's consent, be advertised before the time for showing cause.

31. Insolvent to deliver up his books of account to the court upon oath; to attend assignees; to be at liberty to inspect books, after allowance of certificate to attend assignees in settling accounts allowance for attendance.

32. Search warrants in what cases.

33. No action against persons for acting under warrant of the court without demand of copy of warrant.

34. Proof in such actions that defendant is petitioning creditor sufficient to render him liable.

35. Fiscal may break open the insolvents doors, and seize upon his body or property.

36. Insolvent not in custody to be free from arrest in coming to surrender; If in custody; he may be brought up to be examined or to surrender, and if for debt, the court may, except in certain cases, order his release.

37. If arrested, to be discharged on producing protection.

38. Petitioning creditor to proceed at his own cost until choice of assignees.

39. No objection to petition for sequestration, that the Act of insolvency was concerted.

40. Court may proceed notwithstanding death of insolvent.

41. Court may summon and examine insolvent.

42. Court may summon and examine the insolvent's wife.

43. If insolvent keep out of the way, or be about to quit Sri Lanka, warrant.

44. Court may summon person suspected of having insolvent's property, and if they fail to attend, warrant.

45. Service of summons where person keeps out of the way.

46. Power to examine persons summoned or present at any sitting.

47. Court may order payment of debts admitted to be due to the estate, such order to have effect of judgment

48. Court may order letters addressed to insolvent to be redirected or delivered to assignees.

POWER OF THE DISTRICT COURT OVER CERTAIN DESCRIPTIONS OF PROPERTY

49. Goods in the possession, order, or disposition of the insolvent to be deemed his property.

50. Consigned goods, to be given up to the owner.

51. Conveyances, by insolvent without valuable consideration, void.

52. Seizure of goods for rent not to be available for more than one year's rent due; the landlord to prove for the residue.

53. Where insolvent is a trustee, the court may order conveyance or assignment to another trustee.

54. Title to property sold not to be impeached unless insolvency disputed within a certain time.

55. The court, after adjudication, may order any agent of the insolvent to deliver over all moneys.

TRANSACTIONS WITH THE INSOLVENT AND EXECUTIONS AGAINST HIS PROPERTY UP TO THE TIME OF THE FILING OF THE PETITION FOR SEQUESTRATION OF HIS ESTATE AS INSOLVENT, OR WITHIN A LIMITED TIME PREVIOUSLY THERETO

56. Payment by insolvent, conveyances by him; contracts and dealings with him, and executions in what cases valid, if no notice of act of insolvency; but not to extend to Fraudulent preferences.

57. Bonafide purchases not to be impeached by notice of Act of insolvency, unless petition be filed within twelve months after the act of insolvency.

58. Fraudulent preferences according to the law of England to be deemed such in like cases within Sri Lanka.

59. Certain powers of attorney to confess judgment and consents to judgments, given within two months of filing petition to be null and void.

STAMPS

60. Deeds and other instruments relating to insolvency not liable to stamp duty.

61. Provisions of Stamp Ordinance to extend to stamps under this Ordinance.

APPOINTMENT BY THE COURT OF PROVISIONAL ASSIGNEES

62. As to appointment by court of provisional assignee.

63. Removal of provisional assignee.

64. Provisional assignee not to sell property without authority of court.

65. Effect of appointment of provisional assignee.

CHOICE OF ASSIGNEES, AND THEIR RIGHTS AND DUTIES

66. Assignees when and how chosen.

67. Joint creditor entitled to prove under separate estate for the purpose choice of assignees.

68. Who incompetent to be appointed assignee.

69. Acts of assignee entitling the court to set election aside and declare offender disqualified.

70. Movable property to vest in assignees.

71. Immovable property to vest in assignees.

72. Insolvent not liable to rents or covenants in conveyances, leases, if assignees accept the same. How if assignees decline. How assignees compelled to elect.

73. Assignees how compelled to elect whether they will abide by or decline agreement for the purchase of land.

74. Assignees may execute power vested in the insolvent.

75. Court may order insolvent to join in conveyances.

76. Property mortgaged or pledged may be redeemed by the assignees.

77. Assignees may appoint the insolvent to manage the estate.

78. Assignees to subject to orders of the court.

79. Where one of firm is insolvent, the court may authorise action in name of the assignee; and of the other partner.

80. As to sale of estates by assignees, conditions of sale.

81. As to wearing apparel, tools, of insolvent.

82. Assignees, with leave of the court, may bring or defend actions; may compound debts; and refer disputes to arbitrators.

83. Reference to arbitration may be made a rule of court.

84. If petition or adjudication be annulled, persons from whom the assignees have recovered, or who have bonafide paid the assignees, discharged from claims by the insolvent.

85. Assignee indebted to the estate becoming insolvent, his future property liable.

86. Suits not to abate by death or removal of assignees.

87. Inaction against a debtor to the estate, in what case he may pay money into court.

88. Limitation of actions.

LAST EXAMINATION

89. The insolvent to prepare balance sheet and accounts.

90. Insolvents apprehended by warrant.

91. Court may adjourn last examination sine die.

92. If insolvent in custody, court may appoint a person to attend him with books, papers, to enable him to prepare a balance sheet.

PROOF OF DEBTS AND PAYMENTS IN FULL

93. When and how debts may be proved.

94. Bonafide creditors for debts contracted after an act of insolvency may prove.

95. Amount of taxes.

96. If insolvent an officer of friendly society, court to order payment of debt to them before any other debts.

97. Three months' wages or salary to clerks or servants.

98. Apprentices discharged from their indentures. Sum to be paid in respect of apprentice fees.

99. Mutual debts and credits may be set off.

100. Debts not payable at the time of the insolvency may be proved.

101. Proof by sureties.

102. Claim and proof on bottomry or respondentia bonds, and policy of insurance.

103. Proof by annuity creditor.

104. Proof by sureties for payment of annuities.

105. Proof for contingent debt.

106. Claim and proof for contingent liability.

107. Proof for interest.

108. Plaintiff or defendant obtaining judgment, entitled to prove for costs.

109. Proving debt to be an election not to proceed against the insolvent by action.

110. Complaint of debts being proved which are not due investigation at whose instance and how.

111. Creditor having security not to receive more than other creditors.

112. Accounts of assignees.

AUDIT AND MONEY BELONGING TO THE INSOLVENT ESTATE

113. Audit.

114. Remuneration to assignees.

115. Creditors to choose a bank with which assignees shall open an account and lodge the money of the estate.

116. Penalty upon assignee retaining or employing money belonging to the estate.

117. Method of making dividends. No dividend without previous audit

118. Final dividend within eighteen months, except where suit depending or estate standing out, Outstanding debts, may be sold, and the purchaser may sue for them.

119. Remedy for dividend.

UNCLAIMED DIVIDENDS

120. Unclaimed dividends, to be paid into the Treasury.

121. How unclaimed dividends, in the hands of assignees to be disposed of.

ALLOWANCES TO THE INSOLVENT

122. Allowance to insolvent for maintenance.

123. If estate pay ten rupees for every ten rupees and interest, surplus to be paid to insolvent.

CERTIFICATE OF CONFORMITY

124. Mode of obtaining certificate.

125. Form of certificate.

126. Effect of certificate.

127. Certificate not granted or void if insolvent has concealed or falsified books, or concealed any property, or permitted any fictitious debts to be proved.

128. Contract or security to induce creditor to forbear opposition void.

129. Certificate may be recalled.

130. Insolvent not liable upon any promise to pay debt discharged by certificate.

131. Insolvent, having obtained his certificate, free from arrest; may plead his certificate; evidence under it.

Insolvent, if in execution, discharged.

132. Appeal against allowance or refusal of certificate.

133. Allowance, refusal, or suspension of certificate (except in case of appeal) to be final in what cases.

ARRANGEMENTS BY DEED

134. Deeds of arrangement entered into between any debtor and certain of his creditors, in what cases binding on all.

135. When deed not to be effectual against creditor who has not signed.

136. Trustee or inspector, to certify as to the deed being signed.

137. Account of debt, to be annexed to such certificate.

138. Rights of creditors.

139. Court may interfere in case of improper administration of the estate.

COMPOSITION AFTER ADJUDICATION OF INSOLVENCY

140. If after adjudication certain of the creditors accept composition, it shall bind the rest.

141. Mode of voting in deciding upon such composition.

EVIDENCE

142. Officer of court to produce proceeding and give copies thereof.

143. If insolvent does not dispute the insolvency, Gazette to be evidence of the adjudication and petition, as against insolvent, and in suits or debts, by assignees.

144. In other cases no proof of petitioning creditor's debt or act of insolvency, unless notice to dispute them.

145. Court may award costs, and how recovered.

146. Witnesses and persons known or suspected to have insolvent's property, when entitled to costs.

OFFENCES AGAINST THE LAW RELATING TO INSOLVENCY AND OTHER MATTERS IN THIS ORDINANCE

147. Insolvent not surrendering not discovering his property, not delivering his books, removing, concealing, or embezzling property, books.

148. Insolvent destroying or falsifying books,

149. Insolvent obtaining goods on credit under false pretences, or removing or concealing goods so obtained

150. False evidence.

151. If at last examination it appears that insolvent has been guilty of any of the following offences, further protection refused; certificate refused or suspended.

152. On refusal of certificate or protection, the court may grant assignees or creditor a certificate on which they may sue out execution against the insolvent.

153. Assignees for the time being may issue execution on such certificate.

154. Insolvent taken, not discharged for one year.

155. List of uncertificated insolvents to be published in the Gazette every six months.

156. Any person refusing to be sworn, or refusing to answer, or not answering fully, or refusing to sign examination, or to produce books, maybe committed.

157. Questions to be Specified In warrant.

158. Persons disobeying any order of court to be committed.

159. If petitioning creditor's debt be not due, or if Act of insolvency be not proved, and petition be filed fraudulently or maliciously, court may order satisfaction.

160. Petitioning creditor compounding with person after insolvency to forfeit his debt and pay the money.

161. Concealing insolvent's effects. Penalty. Allowance to persons making discovery.

162. Obtaining money, to forbear opposition to or to consent to allowance of certificate. Penalty.

163. Inserting advertisements without authority.

164. Sections 36 and 37 to apply to State debtors.

165. Interpretation.

SCHEDULES

7 of 1853,

24 of 1884.

AN ORDINANCE to provide for the due Collection, Administration, and Distribution of Insolvent Estates.

[Date of Commencement: 2nd July, 1854]

1. Short title.

This Ordinance may be cited as the Insolvency Ordinance.

2. Cession bonorum abolished.

It shall not be lawful for any person to obtain from any court within Sri Lanka, or for any such court to grant to any person, the benefit or relief of cession of goods and property commonly called the cession bonorum, as heretofore known to and allowed by the Roman-Dutch law in force within Sri Lanka:

Provided that nothing herein contained shall be deemed or taken to affect in any way the estate or condition of any person to whom before the commencement of this Ordinance the said benefit or relief shall have been duly granted, which estate shall be administered, and which condition shall be judged of, as if this Ordinance had not been enacted.

3. Judges may make rules.

The Judges of the Supreme Court may from time to time make such rules and orders as they may think fit for the better carrying of this Ordinance into effect, and generally for regulating the practice of the District Court and the forms of proceedings under this Ordinance in all insolvency matters not provided for in this Ordinance:

Provided that such rules and orders shall not be inconsistent with or repugnant to the provisions of this Ordinance, and that no such rules or orders shall be of any force or effect until they shall have been laid before Parliament and notified in the Gazette in manner provided in Article 136 of the Constitution.

4. District Courts to be auxiliary to each other for proof of debts and taking examinations.

The several District Courts throughout Sri Lanka shall be courts for the administration of insolvent estates under this Ordinance, and shall be auxiliary to each other for proof of debts and for the examination of persons or witnesses in all matters under this Ordinance, or for any or either of such purposes:

Provided that all such examinations shall be taken down in writing, and shall be transmitted to the court in which the petition for sequestration is being prosecuted, and shall be annexed to and form part of the proceedings in the matter to which the same shall relate, and that no such examination shall be taken without the request in writing of the Judge of the District Court before whom the matter is being prosecuted.

5. Appeals to Court of Appeal.

All decisions and orders of the District Courts made under the authority of this Ordinance shall be subject to an appeal to the Court of Appeal.

6. Omitted.

[* Section 6 is omitted from this Edition, as the procedure relating to appeals is now regulated by the Civil Procedure Code.]

Acts of Insolvency in General

7. Acts of insolvency.

If any person residing in Sri Lanka or having any property, real or personal, therein, shall depart therefrom, or being out of Sri Lanka shall remain abroad, or shall depart from his dwelling house, or otherwise absent himself, or begin to keep his house, or suffer himself to be arrested or taken in execution for any debt not due, or yield himself to prison, or procure himself to be arrested or taken in execution, or his goods, money, lands, or other property to be attached, sequestered, or taken in execution, or make or cause to be made, either in Sri Lanka or elsewhere, any fraudulent grant, conveyance, or mortgage of any of his lands or goods, or make or cause to be made any fraudulent gift, delivery, or transfer of any of his goods or other property, every such person doing, suffering, procuring, executing, permitting, making, or causing to be made any of the acts, deeds, or matters aforesaid, with intent to defeat or delay his creditors, shall be deemed to have thereby committed an Act of insolvency.

8. Conveyance by a person of all his property to trustees not an Act of insolvency, unless petition for sequestration is files within three months.

If any person shall execute any conveyance or assignment by deed of all his property to a trustee or trustees for the benefit of all the creditors of such person, the execution of such deed shall not be deemed an act of insolvency, unless a petition for sequestration of the estate of such person be filed within three months from the execution thereof:

Provided such deed shall be executed by every such trustee within fifteen days after the execution thereof by such first-mentioned person, and notice thereof be given within one month after the execution thereof by such first-mentioned person in the Gazette and in some newspaper published in Colombo; and such notice shall contain the date and execution of such deed and the name and place of abode of every such trustee.

9. Lying in prison for twenty-one days, and escaping out of prison, Acts of insolvency.

If any person having been arrested or committed to prison for debt or on any attachment for non-payment of money shall, upon such or any other arrest or commitment for debt or non-payment of money, or upon any detention for debt, lie in prison for twenty-one days, or having been arrested or committed to prison for any other cause shall lie in prison for twenty-one days after any writ of execution issued against him and not discharged, every such person shall thereby be deemed to have committed an Act of insolvency; or if any such person having been arrested, committed, or detained for debt shall escape out of prison or custody, every such person shall be deemed to have thereby committed an act of insolvency from the time of such arrest, commitment, or detention.

10. Filing declaration of insolvency an Act of insolvency.

If any person residing in Sri Lanka shall file in the District Court of the district in which he shall have resided or carried on business for six months next immediately preceding a declaration in writing in the form A in the Schedule signed by such person and attested by an Attorney-at-Law,
or some other witness, that he is unable to meet his engagements, every such person shall be deemed thereby to have committed an Act of insolvency at the time of filing such declaration, provided a petition for sequestration of his estate shall be filed by or against such person within two months from the filing of such declaration.

11. Compounding with, petitioning creditor an Act of insolvency.

If any person, after the filing of any petition for sequestration of his estate, shall pay money to the petitioning creditor, or give or deliver to such petitioning creditor any satisfaction or security for his debt or any part thereof, whereby such petitioning creditor may receive more for every ten rupees in respect of his debt than the other creditors, such payment, gift, delivery, satisfaction or security shall be an Act of insolvency; and if adjudication that such estate be sequestered shall have been made upon such petition, the court may either declare such adjudication to be valid, and direct the same to be proceeded in, or may order it to be annulled, and a petition or new petition for sequestration may be filed, and such petition or new petition may be supported either by proof of such last-mentioned or any other Act of insolvency.

12. Defendant not paying, securing, or compounding for a judgment debt within thirty days after notice an Act of insolvency.

If any plaintiff shall recover judgment in any action for the recovery of any debt or money demand in any court in Lanka against any person residing within the same, and shall be in a situation to sue out execution upon such judgment, and there be nothing due from such plaintiff by way of set-off against such judgment, and the defendant shall not within thirty days after notice in writing personally served upon such defendant requiring immediate payment of such judgment-debt, pay, secure, or compound for the same to the satisfaction of such plaintiff, every such defendant shall be deemed to have committed an act of insolvency on the thirty-first day after service of such notice:

Provided that if such execution shall in the meantime be suspended or restrained by any rule, order, or proceeding of any court having jurisdiction in that behalf, no further proceeding shall be had on such notice, but shall be lawful nevertheless for such plaintiff, when he shall again be in a situation to sue out execution on such judgment, to proceed again by notice in manner aforesaid:

Provided also that if the defendant appeals against such judgment no such notice shall be given, or if given no further proceeding shall be had thereon pending such appeal.

13. Person disobeying orders of court for payment of money after service of peremptory order an Act of insolvency.

If any decree or order shall be pronounced in any cause depending in any court or any order shall be made in any matter of insolvency against any person residing in Sri Lanka, ordering such person to pay any sum of money, and such person shall disobey such decree or order, the same having been personally served upon him, and no appeal against the same shall be pending, the person entitled to receive such sum under such decree or order, or interested in enforcing the payment thereof pursuant thereto, may make an ex parte application to the court by which the same shall have been pronounced to fix a peremptory day for the payment of such money, which shall accordingly be fixed by an order for that purpose; and if such debtor, being personally served with such last-mentioned order thirty days before the day therein appointed for payment of such money, shall neglect to pay the same, every such debtor shall be deemed to have committed an act of insolvency on the thirty-first day after the service of such order.

14. Notice of acts of insolvency to agents of corporate bodies.

If any accredited agent of anybody corporate or public company shall have had notice of any Act of insolvency, such body corporate or company shall be deemed to have had such notice.

15. No person liable upon an Act of insolvency committed more than twelve months before petition.

No person shall be liable to be adjudged insolvent by reason of any Act of insolvency committed more than twelve months prior to the filing of any petition for sequestration of his estate; and no adjudication of insolvency shall be deemed invalid by reason of any act of insolvency prior to the debt of the petitioning creditor, provided there be a sufficient act of insolvency subsequent to such debt.

Proceedings before the Estate of any Person is Adjudged Insolvent

16. Proceedings to originate by petition.

Proceedings to obtain the sequestration of the estate of any person as insolvent shall be by petition to the District Court of the district in which the debtor shall have resided or carried on business for six months next immediately preceding the time of filing such petition, except where otherwise in this Ordinance specially provided (such petition, if presented by a creditor, being in the form B in the Schedule, and the truth thereof verified by the affidavit of the petitioner in the form C in the Schedule; and if presented by a person against himself under section 20, being in the form D in the Schedule, and the truth thereof and of the matters required to be stated in the list annexed to such petition verified by the affidavit of such person in the form C in the Schedule); and every such petition shall be filed of record and prosecuted as directed by this Ordinance; and from and after the filing of such petition the said court shall have full power and authority to take such order and direction with the body of the insolvent as mentioned in this Ordinance, as also with all his property, real and personal, which he shall have in his own right before he became insolvent, as also with all such interest in any such property as such insolvent may lawfully part with, and with all his money, fees, annuities, goods, wares, merchandise, and debts, where so ever they may be found or known, and to make or order sale thereof in manner herein mentioned, or otherwise order the same for satisfaction and payment of the creditors of such insolvent.

17. Court of Appeal may direct petition to be prosecuted in any District Court.

Provided that the Court of Appeal shall have power, whenever such court may deem it expedient, to order any petition against or by any person for the sequestration of his estate, to be prosecuted in any District Court with or without reference to the district in which such person resided or carried on business, and whether or not such person has resided or carried on his business for six months preceding the filing of such petition, and whether or not such person has carried on his business for that time in any particular district; or to consolidate the proceedings or any part thereof under two or more petitions for the sequestration of such estate, or to transfer any petition for such sequestration and the proceedings thereunder, and the prosecution or the further prosecution thereof, from any one District Court to any other District Court, and the court to which any such transfer shall be made shall have and exercise full jurisdiction therein; and any such order by the Court of Appeal may be in such of the forms E, F, or G in the Schedule as may be adapted to the case, or to the like effect.

18. Petitioning creditor's debt though payable at a future time and security given.

The amount of the debt of any creditor petitioning for sequestration of the estate of any person as insolvent shall be as follows: that is to say, the single debt of such creditor, or of two or more persons being partners, so petitioning shall amount to five hundred rupees or upwards; and the debt of two creditors so petitioning shall amount to seven hundred rupees or upwards; and the debt of three or more creditors so petitioning shall amount to one thousand rupees or upwards; and every person who has given credit to any person upon valuable consideration for any sum payable at a certain time, which time shall not have arrived when such person committed an Act of insolvency, may so petition or join in petitioning, whether he shall have had any security in writing for such sum or not.

19. Petition by public officer of certain co-partnership.

A petition for sequestration as insolvent of the estate of any person indebted in the amount aforesaid to any co-partnership, duly authorised to sue and be sued in the name of a public officer of such co-partnership, may be filed by such public officer as the nominal petitioner for and on behalf of such co-partnership.

20. Person may petition against himself.

Any person may petition for the sequestration as insolvent of his own estate; and there shall be annexed to such petition a list containing a full and true account of the petitioner's debts, and the claims against him, with the names of his creditors and claimants and the dates of contracting the debts and claims severally, as near as such dates can be stated, the nature of the debts and claims and securities (if any) given for the same, and whether the same are disputed; and also a true account of the nature and amount of the petitioner's property, and an inventory of the same, and of the debts owing to him, with their dates, as nearly as such dates can be stated, and the names of his debtors, and the nature of the securities (if any) which he has for such debts:

So also may insolvent prisoner.

Provided that unless such person shall forthwith after the filing of his petition, and before adjudication of insolvency thereunder, make it appear to the satisfaction of the court that his available estate is sufficient to pay his creditors at least two rupees and fifty cents for every ten rupees, clear of all charges (to be estimated by the court) of prosecuting the petition, such petition shall be dismissed, and no further petition shall be filed by such person in the same district without the leave of the court first obtained for that purpose; and the adjudication on any further petition shall be subject to the like condition as aforesaid as to the available estate of the petitioner;

Provided, however, that it shall be lawful for any person, whatever the amount of his available estate, who shall be in actual custody within the walls of any prison in Sri Lanka, upon any writ of execution against his person, or other like process, for or by reason of any debt, damages, or costs, at any time after twenty-one days from the commencement of the actual custody of such prisoner, to file a declaration of insolvency, and to petition for the sequestration as an insolvent of his own estate.

21. If adjudication be not obtained within three days after petition, any other creditor may proceed on it.

If the petitioning creditor in any petition for sequestration of his debtor's estate as insolvent shall not proceed and obtain adjudication within three days after his petition shall have been filed, or within such extended time as shall be allowed by the court, the court may at any time within fourteen days then next following, upon the application of any other creditor to the amount required to constitute a petitioning creditor, proceed to adjudicate on such petition, upon the proof of the debt of such second-mentioned creditor and of the other requisites to support such petition (except the debt of the petitioning creditor); but if neither the petitioner nor any other creditor shall, within such fourteen days or within such extended time as may be granted by the court for that purpose, apply to the court to adjudicate upon such petition, no further proceeding shall be taken thereon.

22. Petitions may be presented against one or more partners in a firm; and petitions against two or more may be dismissed as to one without affecting the others.

Any creditor whose debt is sufficient to entitle him to petition for the sequestration as insolvent of the estate of all the partners of any firm may petition for such sequestration against one or more partners of such firm, and every such petition shall be valid, although it does not include all the partners of the firm; and in every petition for sequestration against two or more persons the court may dismiss the same as to one or more of such persons, and the validity of such petition shall not be thereby affected as to any person as to whom such petition is not ordered to be dismissed, nor shall any such person's certificate be thereby affected.

23. If one member of a firm be insolvent, a petition against the others shall be filed in the same court.

After a petition for sequestration filed against or by one or more member or members of a firm, any petition for sequestration against or by any other member of such firm shall be filed and prosecuted in the court in which the first petition was prosecuted; and immediately after the adjudication under such other petition all the estate, real and personal, of any such insolvent shall vest in the assignee, if any, under the first petition; and thereafter all separate proceedings under such other petition shall be stayed and such petition shall without affecting the validity of the first petition, be annexed to and form part of the same:

Provided that the Court of Appeal may direct that such other petition shall be filed and prosecuted in any other District Court, or be proceeded in, either separately or in conjunction with the first petition.

24. After petition filed, if the insolvent be about to quit Sri Lanka or to remove or conceal his goods, he may be arrested and his goods seized.

Whenever any petition for sequestration as insolvent of the estate of any person shall have been filed against any person, and it shall be proved to the satisfaction of the court in which such petition has been filed that there is probable cause for believing that such person is about to quit Sri Lanka, or to remove or conceal any of his goods with intent to defraud his creditors, unless he be forthwith apprehended, it shall be lawful for the court to issue a warrant, directed to the Fiscal, or to such person as the court shall think fit, whereby such Fiscal or other person shall have authority to arrest the person against whom such petition shall have been filed, and also to seize his books, papers, moneys, securities for moneys, goods, and effects, wheresoever he or they may be found, and him and them safely keep until the expiration of the time allowed for adjudication on such petition, or until such person shall be adjudged insolvent under such petition, and be thereon dealt with according to this Ordinance:

Person so arrested may apply to the court for his discharge.

Provided that any person arrested upon any such warrant or any person whose books, papers, moneys, securities for moneys, goods, or effects have been seized under any such warrant, may apply at any time after such arrest or seizure to the court for an order or rule on the petitioning creditor to show cause why the person arrested should not be discharged out of custody, or why his books, papers, moneys, securities for moneys, goods, and effects should not be delivered up to him; and it shall be lawful for such court to make absolute or discharge such order or rule.

25. Court, before adjudication, may summon witnesses to prove Act of Insolvency.

The court, before adjudication, may summon before it any person whom such court shall believe capable of giving any information concerning any act of insolvency committed by the person against whom any petition for the sequestration of his estate as insolvent has been filed, and may require any person so summoned to produce any books, papers, deeds, writings, and other documents in his custody, possession, or power which may appear to the court to be necessary to establish such act of insolvency; and it shall be lawful for the court to examine any such person upon oath by word of mouth, or interrogatories in writing, concerning such Act of insolvency; and such court, before or at the time of adjudication, may examine the person by or against whom any such petition has been presented, or any other person, as to the probable value of the property of such first-mentioned person available for the payment of his debts.

Adjudication of the Estate of any Person as Insolvent, and the Proceedings for Securing the Property and Surrender of the Insolvent

26. Adjudication, and upon what proof.

The District Court, under a petition filed by a creditor shall, upon proof of the petitioning creditor's debt and of the act of insolvency of the person against whom such petition is filed, adjudge such person insolvent; or if in case of the failure of the petitioning creditor to proceed and obtain adjudication within three days after his petition shall have been filed, or within such extended time as may be allowed by the court, another creditor shall apply for adjudication upon such petition, then upon such application, and proof of such creditor's debt, and of the act of insolvency of the person against whom such petition is filed, the court shall adjudge such person insolvent; and under a petition filed by any person against himself the court, upon the application of such person, and upon proof of the filing a declaration of insolvency, and of the sufficiency of his available estate to the extent required by this Ordinance, or upon proof of the filing of such declaration of insolvency, and that such person has been in actual custody within the walls of a prison for debt for more than twenty-one days, shall adjudge such person insolvent.

27. Attachment upon the estate and how to be made.

Forthwith, after any person shall be adjudged insolvent, the District Court shall issue to the Fiscal an order (in the form H in the Schedule) placing the estate of the insolvent under sequestration in his hands, and such Fiscal shall enter and lay an attachment on the estate, under inventory thereof; and when the same shall be sequestered upon the petition of any creditor the said Fiscal shall be accompanied by the petitioning creditor, or someone authorised by him, on behalf of himself and the other creditors of the said estate; and when the said estate shall be sequestered upon the petition of any insolvent against himself, it shall be lawful for any of the creditors, or for the agent of any of the creditors, of the insolvent to accompany the Fiscal and to be present with him while making out the inventory aforesaid.

28. Attachment of personal property how to be made and as to penalty for defeating the same.

When any personal property belonging to any insolvent is attached as aforesaid in virtue of any order for the sequestration thereof, the Fiscal making such attachment shall leave with the person in whose possession any such property is attached a copy of the said inventory, having subjoined thereto a notice in the Sinhala language, and also, if he does not understand Sinhala, in the language spoken by such person, that the property therein specified has been attached by the said Fiscal, by virtue of an order of the court for the sequestration thereof; and any person who knowing the same to have been so attached, shall dispose of, remove, conceal, or receive the same, or any part thereof, with intent to defeat the said attachment, shall be liable on conviction of such offence to be transported for any period not exceeding seven years, or to be imprisoned, with or without hard labour, for any period not exceeding five years:

Provided that it shall be lawful for such Fiscal to secure on the premises, by sealing up in any room or repository, any articles which in the discharge of his duty it shall seem to him expedient so to secure, causing no unnecessary hindrance or inconvenience to any party by so doing, or to leave some person on the premises in charge thereof; and the said Fiscal shall forthwith report his execution of the said attachment to the said court, and the court may give such directions for the safe custody of the said property as shall seem fit.

29. If petitioning creditor's debt insufficient court may proceed upon the application of any other creditor.

If, after adjudication of insolvency, the debt of the petitioning creditor be found by the court to be insufficient to support such adjudication, it shall be lawful for the court, upon the application of any other creditor having proved any debt sufficient to support an adjudication, to order the petition for sequestration to be proceeded in, and it shall by such order be deemed valid, which order may be in the form I in the Schedule, or to the like effect.

30. Insolvent to have notice of adjudication and to be allowed a certain time to show cause against it before advertisement.

Before notice of any adjudication of insolvency shall be given in the Gazette, and at or before the time of putting in execution any order of sequestration which shall have been granted upon such adjudication, a duplicate of such adjudication shall be, served on the person adjudged insolvent, personally or by leaving the same at the usual or last known place of abode or place of business of such person; and such person shall be allowed seven days, or such extended time not exceeding fourteen days in the whole as the court shall think fit, from the service of such duplicate, to show cause to the court against the validity of such adjudication; and if such person shall within such time show to the satisfaction of the court that the petitioning creditor's debt, and the act of insolvency upon which such adjudication has been grounded, or either of such matters, are insufficient to support such adjudication, and upon such showing no other creditor's debt and act of insolvency sufficient to support such adjudication or such of the said last-mentioned matters as shall be requisite to support such adjudication in lieu of the petitioning creditor's debt and act of insolvency, or either of such matters which shall be deemed insufficient in that behalf, as the case may be, shall be proved to the satisfaction of the court, the court shall thereupon order (in the form K in the Schedule or to the like effect) such adjudication to be annulled, and the same shall by such order be annulled accordingly; but if at the expiration of the said time no cause shall have been shown to the satisfaction of the court for the annulling of such adjudication, the court shall forthwith, after the expiration of such time, cause notice of such adjudication to be given in the said Gazette, and shall there by appoint two public sittings of the court for the insolvent to surrender and conform, the last of which sittings shall be on a day not less than thirty days and not exceeding sixty days from such advertisement in the Gazette, and shall be the day limited for such surrender; and copies and translations of such advertisement shall also be affixed on the wall of the District Court and of the nearest kachcheri:

Provided that the court shall have power from time to time to enlarge the time for the insolvent surrendering himself for such time as the court shall think fit, so as every such order be made six days at least before the day on which such insolvent was to surrender himself: and also from time to time to adjourn either of the said sittings if the court shall deem it necessary to do so;

Provided also that if any person so adjudged insolvent shall, before the expiration of the time allowed for showing cause, surrender himself and give his consent, testified in writing under his hand, to such adjudication being advertised, the court after such consent so given shall forthwith cause the notice of adjudication to be advertised, and appoint the sittings for the insolvent to surrender and conform.

31. Insolvent to deliver up his books of account to the court upon oath; to attend assignees; to be at liberty to inspect books, after allowance of certificate to attend assignees in setting accounts, allowance for attendance.

Forthwith after the insertion of the notice of adjudication in the Gazette, or, if the insolvent before the expiration of the time allowed for showing cause against the adjudication surrender himself and give consent to such insertion, forthwith after such surrender, the insolvent shall (if thereto required by the court) deliver up to the court upon oath all books of account, papers, and writings relating to his estate in his custody or power, and discover such as are in the custody or power of any other person; and every insolvent not in prison or custody shall at all times after such surrender attend the assignees, upon every reasonable notice in writing for that purpose given by them to him or left at his usual or last known place of abode, and shall assist such assignees in making out the accounts of his estate; and such insolvent after he shall have surrendered may, at all seasonable times before the expiration of such time as shall be allowed to him to finish his examination, inspect his books, papers, and writings in the presence of his assignees, or any person appointed by them, and bring with him each time any two persons to assist him; and every such insolvent after he shall have obtained his certificate shall, upon demand in writing given to him or left at his usual or last known place of abode, attend the assignees to settle any accounts between his estate and any debtor to or creditor thereof, or attend any court to give evidence touching the same, or do any act necessary for getting in or protecting the said estate, for which attendance he shall be paid by the assignees out of his estate such sum not exceeding five rupees per day, as they shall deem reasonable.

32. Search warrants in what cases.

In all cases where it shall be made to appear to the satisfaction of the District Court that there is reason to suspect and believe that any property of any insolvent is concealed in any house or other place not belonging to such insolvent, the court may grant a search warrant to the Fiscal or other person appointed by the court, and it shall be lawful for such Fiscal or other person to execute such warrant according to the tenor thereof; and such Fiscal or other person shall be entitled to the same protection as is allowed by law in execution of a search warrant for property reputed to be stolen, and every such search warrant shall be in the form L in the Schedule, or to the like effect.

33. No action against persons for acting under warrant of the court without demand of copy of warrant.

No action shall be brought against any Fiscal or other person appointed by the court for anything done in obedience to any warrant of the court, unless demand of the perusal and copy of such warrant has been made or left at the usual place of abode of such Fiscal or other person by the party intending to bring such action, or by his registered attorney or agent, in writing, signed by the party demanding the same, and unless the same hath been refused or neglected for six days after such demand; and if after such demand, and compliance therewith, any action be brought against such Fiscal or person so appointed, without making the petitioning creditor defendant, if living, the court at the trial of such action, on the production and proof of such warrant, shall give judgment for the defendant, notwithstanding any defect of jurisdiction in the court by which such warrant shall have been granted; and if such action be brought against the petitioning creditor and the Fiscal or person so appointed, the court shall, on proof of such warrant, give judgment for such Fiscal or person so appointed, notwithstanding any such defect of jurisdiction; and if the judgment shall be given against the petitioning creditor, the plaintiff shall recover his costs against him, to be taxed so as to include such costs as the plaintiff is liable to pay to the Fiscal or person so appointed as aforesaid.

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