CHAPTER 103

INSOLVENTS

Ordinances AN ORDINANCE TO PROVIDE FOR THE DUE COLLECTION, ADMINISTRATION, ANDNos 7 of 1853, DISTRIBUTION OF INSOLVENT ESTATES.

24 of 1884.

Short title.

Cessiobonorumabolished.

Judges maymake rules.

1. This Ordinance may be cited as theInsolvency Ordinance. '

2. It shall not be lawful for any personto obtain from any court within Sri Lanka,or for any such court to grant to anyperson, the benefit or relief of cession ofgoods and property commonly called thecessio bonorum, as heretofore known to andallowed by the Roman-Dutch law in forcewithin Sri Lanka:

Provided that nothing herein containedshall be deemed or taken to affect in anyway the estate or condition of any person towhom before the commencement of thisOrdinance the said benefit or relief shallhave been duly granted, which estate shallbe administered, and which condition shallbe judged of, as if this Ordinance had notbeen enacted.

3. The Judges of the Supreme Courtmay from time to time make such rules andorders as they may think fit for the bettercarrying of this Ordinance into effect, andgenerally for regulating the practice of theDistrict Court and the forms of proceedingsunder this Ordinance in all insolvencymatters not provided for in this Ordinance.:

Provided that such rules and orders shallnot be inconsistent with or repugnant to theprovisions of this Ordinance, and that nosuch rules or orders shall be of any force oreffect until they shall have been laid beforeParliament and notified in the Gazette inmanner provided in Article 136 of theConstitution.

[2nd July. 1854.]

4. The several District Courtsthroughout Sri Lanka shall be courts for theadministration of insolvent estates underthis Ordinance, and shall be auxiliary toeach other for proof of debts and for theexamination of persons or witnesses in allmatters under this Ordinance, or for any oreither of such purposes :

Provided that all such examinations shallbe taken down in writing, and shall betransmitted to the court in which thepe t i t ion for seques t ra t ion is be ingprosecuted, and shall be annexed to andform part of the proceedings in the matterto which the same shall relate, and that nosuch examination shall be taken without therequest in writing of the Judge of theDistrict Court before whom the matter isbeing prosecuted.

5. All decisions and orders of theDistrict Courts made under the authority ofthis Ordinance shall be subject to an appealto the Court of Appeal.

ACTS OF INSOLVENCY IN GENERAL

7.* If any person residing in Sri Lankaor having any property, real or personal,therein, shall depart therefrom, or being outof Sri Lanka shall remain abroad, or shalldepart from his dwelling house, or otherwiseabsent himself, or begin to keep his house,or suffer himself to be arrested or taken inexecution for any debt not due, or yieldhimself to prison, or procure himself to bearrested or taken in execution, or his goods,money, lands, or other property to beattached, sequestered, or taken in execution,or make or cause to be made, either in Sri Lanka

District Courtsto be auxiliaryto each otherfor proof ofdebts andtakingexaminations.

Appeals toCourt ofAppeal.

Acts ofinsolvency.

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

V/27

SLIIT SLIIT INSOLVENTS

SLIIT SLIIT

SLIIT SLIIT[Cap.103

Cap.103] INSOLVENTS

Conveyance bya person of allhis property totrustees not anact ofinsolvency,unless petitionforsequestration isfiled withinthree months.

Lying in prisonfor twenty-onedays, andescaping out ofprison, acts ofinsolvency.

Filingdeclaration ofinsolvency anact ofinsolvency.

or elsewhere, any fraudulent grant,conveyance, or mortgage of any of his landsor goods, or make or cause to be made anyfraudulent gift, delivery, or transfer of anyof his goods or other property, every suchperson doing, suffering, procuring,executing, permitting, making, or causing tobe made any of the acts, deeds, or mattersaforesaid, with intent to defeat or delay hiscreditors, shall be deemed to have therebycommitted an act of insolvency.

8. If any person shall execute anyconveyance or assignment by deed of all hisproperty to a trustee or trustees for thebenefit of all the creditors of such person,the execution of such deed shall not bedeemed an act of insolvency, unless apetition for sequestration of the estate ofsuch person be filed within three monthsfrom the execution thereof:

Provided such deed shall be executed byevery such trustee within fifteen days afterthe execution thereof by such first-mentioned person, and notice thereof begiven within one month after the executionthereof by such first-mentioned person inthe Gazette and in some newspaperpublished in Colombo; and such noticeshall contain the date and execution of suchdeed and the name and place of abode ofevery such trustee.

9. If any person having been arrested orcommitted to prison for debt or on anyattachment for non-payment of moneyshall, upon such or any other arrest orcommitment for debt or non-payment ofmoney, or upon any detention for debt, liein prison for twenty-one days, or havingbeen arrested or committed to prison forany other cause shall lie in prison fortwenty-one days after any writ of executionissued against him and not discharged, everysuch person shall thereby be deemed to havecommitted an act of insolvency; or if anysuch person having been arrested,committed, or detained for debt shall escapeout of prison or custody, every such personshall be deemed to have thereby committedan act of insolvency from the time of sucharrest, commitment, or detention.

10. If any person residing in Sri Lankashall file in the District Court of the districtin which he shall have resided or carried onbusiness for six months next immediatelypreceding a declaration in writing in the

form A in the Schedule signed by suchperson and attested by an attorney-at-law,or some other witness, that he is unable tomeet his engagements, every such personshall be deemed thereby to have committedan act of insolvency at the time of filingsuch declaration, provided a petition forsequestration of his estate shall be filed byor against such person within two monthsfrom the filing of such declaration.

11. If any person, after the filing of any Compoundingpetition for sequestration of his estate, shall with, ,

, . . . ,. petitioningpay money to the petitioning creditor, or creditor an actgive or deliver to such petitioning creditor of insolvencyany satisfaction or security for his debt orany part thereof, whereby such petitioningcreditor may receive more for every tenrupees in respect of his debt than the othercreditors, such payment, gift, delivery,satisfaction or security shall be an act ofinsolvency; and if adjudication that suchestate be sequestered shall have been madeupon such petition, the court may eitherdeclare such adjudication to be valid, anddirect the same to be proceeded in, or mayorder it to be annulled, and a petition ornew petition for sequestration may be filed,and such petition or new petition may besupported either by proof of such last-mentioned or any other act of insolvency.

12. If any plaintiff shall recoverjudgment in any action for the recovery ofany debt or money demand in any court in

Sri Lanka against any person residingwithin the same, and shall be in a situationto sue out execution upon such judgment,and there be nothing due from such plaintiffby way of set-off against such judgment,and the defendant shall not within thirtydays after notice in writing personallyserved upon such defendant requiringimmediate payment of such judgment-debt,pay, secure, or compound for the same tothe satisfaction of such plaintiff, every suchdefendant shall be deemed to. havecommitted an act of insolvency on thethirty-first day after service of such notice:

Provided that if such execution shall inthe meantime be suspended or restrained byany rule, order, or proceeding of any courthaving jurisdiction in that behalf, no furtherproceeding shall be had on such notice, butit shall be lawful nevertheless for such

Defendant notpaying,securing, orcompoundingfor a judgmentdebt withinthirty days after notice anact ofinsolvency.

V/28

INSOLVENTS [Cap.103

Persondisobeyingorder of courtfor payment ofmoney afterservice ofperemptoryorder an act ofinsolvency.

Notice of actsof insolvencyto agents ofcorporatebodies, &c.

No personliable upon anact ofinsolvencycommittedmore thantwelve monthsbefore petition.

plaintiff, when he shall again be in asituation to sue out execution on suchjudgment, to proceed again by notice inmanner aforesaid;

Provided also that if the defendantappeals against such judgment no suchnotice shall be given, or if given no furtherproceeding shall be had thereon pendingsuch appeal.

13. If any decree or order shall bepronounced in any cause depending in anycourt or any order shall be made in anymatter of insolvency against any personresiding in Sri Lanka, ordering such personto pay any sum of money, and such personshall disobey such decree or order, the samehaving been personally served upon him,and no appeal against the same shall bepending, the person entitled to receive suchsum under such decree or order, orinterested in enforcing the payment thereofpursuant thereto, may make an ex parteapplication to the court by which the sameshall have been pronounced to fix aperemptory day for the payment of suchmoney, which shall accordingly be fixed byan order for that purpose; and if suchdebtor, being personally served with suchlast-mentioned order thirty days before theday therein appointed for payment of suchmoney, shall neglect to pay the same, everysuch debtor shall be deemed to havecommitted an act of insolvency on thethirty-first day after the service of suchorder.

14. If any accredited agent of any bodycorporate or public company shall have hadnotice of any act of insolvency, such bodycorporate or company shall be deemed tohave had such notice.

15. No person shall be liable to beadjudged insolvent by reason of any act ofinsolvency committed more than twelvemonths prior to the filing of any petition forsequestration of his estate; and noadjudication of insolvency shall be deemedinvalid by reason of any act of insolvencyprior to the debt of the petitioning creditor,provided there be a sufficient act ofinsolvency subsequent to such debt.

16. Proceedings to obtain the Proceedings tosequestration of the estate of any person as orginate byinsolvent shall be by petition to the District petitionCourt of the district in which the debtorshall have resided or carried on business forsix months next immediately preceding thetime of filing such petition, except whereotherwise in this Ordinance speciallyprovided (such petition, if presented by acreditor, being in the form B in theSchedule, and the truth thereof verified bythe affidavit of the petitioner in the form Cin the Schedule; and if presented by aperson against himself under section 20,being in the form D in the Schedule, and thetruth thereof and of the matters required tobe stated in the list annexed to such petitionverified by the affidavit of such person inthe form C in the Schedule); and every suchpetition shall be filed of record andprosecuted as directed by this Ordinance;and from and after the filing of suchpetition the said court shall have full powerand authority to take such order anddirection with the body of the insolvent asmentioned in this Ordinance, as also with allhis property, real and personal, which heshall have in his own right before he becameinsolvent, as also with all such interest inany such property as such insolvent maylawfully part with, and with all his money,fees, annuities, goods, wares, merchandise,and debts, wheresoever they may be foundor known, and to make or order sale thereofin manner herein mentioned, or otherwiseorder the same for satisfaction and paymentof the creditors of such insolvent.

PROCEEDINGS BEFORE THE ESTATE OF ANYPERSON IS ADJUDGED INSOLVENT

17. Provided that the Court of Appealshall have power, whenever such court maydeem it expedient, to order any petitionagainst or by any person for thesequestration of his estate, to be prosecutedin any District Court with or withoutreference to the district in which such

• person resided or carried on business, andwhether or not such person has resided orcarried on his buisness for six monthspreceding the filing of such petition, andwhether or not such person has carried onhis business for that time in any particulardistrict; or to consolidate the proceedingsor any part thereof under two or more

Court ofAppeal maydirect petitionto beprosecuted inany DistrictCourt., &c.

V/29

Cap.103] INSOLVENTS

Petitioningcreditor's debt:

though payableat a futuretime, andsecurity given.

Petition bypublic officerof certainco-partnership.

Person maypetition againsthimself.

petitions for the sequestration of suchestate, or to transfer any petition for suchsequestration and the proceedingsthereunder, and the prosecution or thefurther prosecution thereof, from any oneDistrict Court to any other District Court,and the court to which any such transfershall be made shall have and exercise fulljurisdiction therein; and any such order bythe Court of Appeal may be in such of theforms E, F, or G in the .Schedule as may beadapted to the case, or to the like effect.

18. The amount of the debt of anycreditor petitioning for sequestration of theestate of any person as insolvent shall be asfollows: that is to say, the single debt ofsuch creditor, or of two or more personsbeing partners, so petitioning shall amountto five hundred rupees or upwards; and thedebt of two creditors so petitioning shallamount to seven hundred rupees orupwards; and the debt of three or morecreditors so petitioning shall amount to onethousand rupees or upwards; and everyperson who has given credit to any personupon valuable consideration for any sumpayable at a certain time, which time shallnot have arrived when such personcommitted an act of insolvency, may sopetition or join in petitioning, whether heshall have had any security in writing forsuch sum or not.

19. A petition for sequestration asinsolvent of the estate of any personindebted in the amount aforesaid to any co-partnership, duly authorized to sue and besued in the name of a public officer of suchco-partnership, may be filed by such publicofficer as the nominal petitioner for and onbehalf of such co-partnership.

20. Any person may petition for thesequestration as insolvent of his own estate ;and there shall be annexed to such petitiona list containing a full and true account ofthe petitioner's debts, and the claims againsthim, with the names of his creditors «ndclaimants and the dates of contracting thedebts and claims severally, as near as suchdates can be stated, the nature of the debtsand claims and securities (if any) given forthe same, and whether the same aredisputed; and also a true account of thenature and amount of the petitioner's

property, and an inventory of the same, andof the debts owing to him, with their dates,as nearly as such dates can be stated, andthe names of his debtors, and the nature ofthe securities (if any) which he has for suchdebts:

Provided that unless such person shallforthwith after the filing of his petition, andbefore adjudication of insolvencythereunder, make it appear to thesatisfaction of the court that his availableestate is sufficient to pay his creditors atleast two rupees and fifty cents for every tenrupees, clear of all charges (to be estimatedby the court) of prosecuting the petition,such petition shall be dismissed, and nofurther petition shall be filed by such personin the same district without the leave of thecourt first obtained for that purpose; andthe adjudication on any further petitionshall be subject to the like condition asaforesaid as to the available estate of thepetitioner;

Provided, however, that it shall be lawful So also may anfor any person, whatever the amount of his insolventavailable estate, who shall be in actual prisoner.custody within the walls of any prison in SriLanka, upon any writ of execution againsthis person, or other like process, for or byreason of any debt, damages, or costs, atany time after twenty-one days from thecommencement of the actual custody ofsuch prisoner, to file a declaration ofinsolvency, and to petition for thesequestration as an insolvent of his ownestate.

21. If the petitioning creditor in any If adjudicationpetition for sequestration of his debtor's be notestate as insolvent shall not proceed and obtainedobtain adjudication within three days after within threehis petition shall have been filed, or within days aftersuch extended time as shall be allowed by petition,anythe court, the court may at any time within other creditorfourteen days then next following, upon the may proceedapplication of any other creditor to the on it.amount required to constitute a petitioningcreditor, proceed to adjudicate on suchpetition, upon the proof of the debt of suchsecond-mentioned creditor and of the otherrequisites to support such petition (exceptthe debt of the petitioning creditor); but ifneither the petitioner nor any other creditorshall, within such fourteen days or withinsuch extended time as may be granted by

V/30

INSOLVENTS [Cap.103

Petitions maybe presentedagainst one ormore partnersin a firm ; andpetitionsagainst two ormore may bedismissed as toone withoutaffecting theothers.

If one memberof a firm beinsolvent, apetition againstthe others shallbe filed in thesame court.

After petitionfiled, if theinsolvent beabout to quitSri Lanka or toremove orconceal hisgoods, he maybe arrested andhis goodsseized.

the court for that purpose, apply to thecourt to adjudicate upon such petition, nofurther proceeding shall be taken thereon.

22. Any creditor whose debt is sufficientto entitle him to petition for thesequestration as insolvent of the estate of allthe partners of any firm may petition forsuch sequestration against one or morepartners of such firm, and every suchpetition shall be valid, although it does notinclude all the partners of the firm; and inevery petition for sequestration against twoor more persons the court may dismiss thesame as to one or more of such persons, andthe validity of such petition shall not bethereby affected as to any person as towhom such petition is not ordered to bedismissed, nor shall any such person'scertificate be thereby affected.

23. After a petition for sequestrationfiled against or by one or more member ormembers of a firm, any petition forsequestration against or by any othermember of such firm shall be filed andprosecuted in the court in which the firstpetition was prosecuted; and immediatelyafter the adjudication under such otherpetition all the estate, real and personal, ofany such insolvent shall vest in the assignee,if any, under the first petition; andthereafter all separate proceedings undersuch other petition shall be stayed and suchpetition shall without affecting the validityof the first petition, be annexed to and formpart of the same :

Provided that the Court of Appeal maydirect that such other petition shall be filedand prosecuted in any other District Court,or be proceeded in, either separately or inconjunction with the first petition.

24. Whenever -any petition forsequestration as insolvent of the estate ofany person shall have been filed against anyperson, and it shall be proved to thesatisfaction of the court in which suchpetition has been filed that there is probablecause for believing that such person is aboutto quit Sri Lanka, or to remove or concealany of his goods with intent to defraud hiscreditors, unless he be forthwithapprehended, it shall be lawful for the courtto issue a warrant, directed to the Fiscal, or

to such person as the court shall think fit,whereby such Fiscal or other person shallhave authority to arrest the person againstwhom 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, andhim and them safely keep until theexpiration of the time allowed foradjudication on such petition, or until suchperson shall be adjudged insolvent undersuch petition, and be thereon dealt withaccording to this Ordinance:

Provided that any person arrested uponany such warrant or any person whosebooks, papers, moneys, securities formoneys, goods, or effects have been seizedunder any such warrant, may apply at anytime after such arrest or seizure to the courtfor an order or rule on the petitioningcreditor to show cause why the personarrested should not be discharged out ofcustody, or why his books, papers, moneys,securities for moneys, goods, and effectsshould not be delivered up to him; and itshall be lawful for such court to makeabsolute or discharge such order or rule.

Person soarrested mayapply to thecourt for hisdischarge.

25. The court, before adjudication, may Court, beforesummon before it any person whom such adjudication,

may summoncourt shall believe capable of giving any information . concerning any act of witnesses toinsolvency committed by the person against prove act ofwhom any petition for the sequestration of insolvencyhis estate as insolvent has been filed, andmay require any person so summoned toproduce any books, papers, deeds, writings,and other documents in his custody,possession, or power which may appear tothe court to be necessary to establish suchact of insolvency ; and it shall be lawful forthe court to examine any such person uponoath by word of mouth, or interrogatories

•in writing, concerning such act ofinsolvency ; and such court, before or at thetime of adjudication, may examine theperson by or against whom any suchpetition has been presented, or any otherperson, as to the probable value of theproperty of such first-mentioned personavailable for the payment of his debts.

V/31

Cap.103] INSOLVENTS

Adjudication,and upon whatproof.

Attachmentupon the estateand how to bemade.

ADJUDICATION OF THE ESTATE OF ANYPERSON AS INSOLVENT, AND THEPROCEEDINGS FOR SECURING THE

PROPERTY AND SURRENDER OF THEINSOLVENT

26. The District Court, under a petitionfiled by a creditor shall, upon proof of thepetitioning creditor's debt and of the act ofinsolvency of the person against whom suchpetition is filed, adjudge such personinsolvent; or if in case of the failure of thepetitioning creditor to proceed and obtainadjudication within three days after hispetition shall have been filed, or within suchextended time as may be allowed by thecourt, another creditor shall apply foradjudication upon such petition, then uponsuch application, and proof of suchcreditor's debt, and of the act of insolvencyof the person against whom such petition isfiled, the court shall adjudge such personinsolvent; and under a petition filed by anyperson against himself the court, upon theapplication of such person, and upon proofof the filing a declaration of insolvency, andof the sufficiency of his available estate tothe extent required by this Ordinance, orupon proof of the filing of such declarationof insolvency, and that such person has beenin actual custody within the walls of aprison for debt for more than twenty-onedays, shall adjudge such person insolvent.

27. Forthwith, after any person shall beadjudged insolvent, the District Court shallissue to the Fiscal an order (in the form Hin the Schedule) placing the estate of theinsolvent under sequestration in his hands,and such Fiscal shall enter and lay anattachment on the estate, under inventorythereof; and when the same shall besequestered upon the petition of anycreditor the said Fiscal shall beaccompanied by the petitioning creditor, orsomeone authorized by him, on behalf ofhimself and the other creditors of the saidestate; and when the said estate shall besequestered upon the petition of anyinsolvent against himself, it shall be lawfulfor any of the creditors, or for the agent ofany of the creditors, of the insolvent toaccompany the Fiscal and to be present withhim while making out the inventory aforesaid.

28. When any personal property Attachment ofbelonging to any insolvent is attached as personalaforesaid in virtue of any order for the property howsequestration thereof, the Fiscal making to be madesuch attachment shall leave with the person and as toin whose possession any such property is penalty forattached a copy of the said inventory, defating thehaving subjoined thereto a notice in the same.Sinhala language, and also, if he does notunderstand Sinhala, in the language spokenby such person, that the property thereinspecified has been attached by the saidFiscal, by virtue of an order of the court forthe sequestration thereof; and any personwho knowing the same to have been soattached, 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 offenceto be transported for any period notexceeding seven years, or to be imprisoned,with or without hard labour, for any periodnot exceeding five years ;

Provided that it shall be lawful for suchFiscal to secure on the premises, by sealingup in any room or repository, any articleswhich in the discharge of his duty it shallseem to him expedient so to secure, causingno unnecessary hindrance or inconvenienceto any party by so doing, or to leave someperson on the premises in charge thereof;and the said Fiscal shall forthwith report hisexecution of the said attachment to the saidcourt, and the court may give suchdirections for the safe custody of the saidproperty as shall seem fit.

29. If, after adjudication of insolvency, if petitioningthe debt of the petitioning creditor be found creditor's debtby the court to be insufficient to support insufficientsuch adjudication, it shall be lawful for the court maycourt, upon the application of any other proceed uponcreditor having proved any debt sufficient to the application, . , . , . , . ,, support an adjudication, to order the of any other petition for sequestration to be proceeded creditor.in, and it shall by such order be deemedvalid, which order may be in the form I inthe Schedule, or to the like effect.

30. Before notice of any adjudication of Insolvent toinsolvency shall be given in the Gazette, and have notice ofat or before the time of putting in execution adjudicationany order of sequestration which shall have and to bebeen granted upon such adjudication, a allowed a duplicate of such adjudication shall be certain time to

, show causeserved on the person adjudged insolvent, against itpersonally or by leaving the same at the beforeusual or last known place of abode or place advertisement

V/32

INSOLVENTS [Cap. 103

of business of such person; and such personshall be allowed seven days, or suchextended time not exceeding fourteen daysin the whole as the court shall think fit,from the service of such duplicate, to showcause to the court against the validity ofsuch adjudication; and if such person shallwithin such time show to the satisfaction ofthe court that the petitioning creditor's debt,and the act of insolvency upon which suchadjudication has been grounded, or either ofsuch matters, are insufficient to supportsuch adjudication, and upon such showingno other creditor's debt and act ofinsolvency sufficient to support suchadjudication or such of the said last-mentioned matters as shall be requisite tosupport such adjudication in lieu of thepetitioning creditor's debt and act ofinsolvency, or either of such matters whichshall be deemed insufficient in that behalf,as the case may be, shall be proved to thesatisfaction of the court, the court shallthereupon order (in the form K in theSchedule or to the like effect) suchadjudication to be annulled, and the sameshall by such order be annulled accordingly ;but if at the expiration of the said time nocause shall have been shown to thesatisfaction of the court for the annulling ofsuch adjudication, the court shall forthwith,after the expiration of such time, causenotice of such adjudication to be given inthe said Gazette, and shall thereby appointtwo public sittings of the court for theinsolvent to surrender and conform, the lastof which sittings shall be on a day not lessthan thirty days and not exceeding sixtydays from such advertisement in theGazette, and shall be the day limited forsuch surrender; and copies and translationsof such advertisement shall also be affixedon the wall of the District Court and of thenearest kachcheri:

Provided that the court shall have powerfrom time to time to enlarge the time for theinsolvent surrendering himself for such timeas the court shall think fit, so as every suchorder be made six days at least before theday on which such insolvent was tosurrender himself: and also from time totime to adjourn either of the said sittings ifthe court shall deem it necessary to do so;

Adjudicationmay, withinsolvent'sconsent, beadvertisedbefore the timefor showingcause.

Insolvent todeliver up hisbooks ofaccount to thecourt uponoath;

to attendassignees;

Provided also that if any person soadjudged insolvent shall, before theexpiration of the time allowed for showingcause, surrender himself and give hisconsent, testified in writing under his hand,to such adjudication being advertised, thecourt after such consent so given shallforthwith cause the notice of adjudication tobe advertised, and appoint the sittings forthe insolvent to surrender and conform.

31. Forthwith after the insertion of thenotice of adjudication in the Gazette, or, ifthe insolvent before the expiration of thetime allowed for showing cause against theadjudication surrender himself and giveconsent to such insertion, forthwith aftersuch surrender, the insolvent shall (if theretorequired by the court) deliver up to thecourt upon oath all books of account,papers, and writings relating to his estate inhis custody or power, and discover such asare in the custody or power of any otherperson ; and every insolvent not in prison orcustody shall at all times after suchsurrender attend the assignees, upon everyreasonable notice in writing for that purposegiven by them to him or left at his usual orlast known place of abode, and shall assistsuch assignees in making out the accountsof his estate; and such insolvent after heshall have surrendered may, at allseasonable times before the expiration ofsuch time as shall be allowed to him tofinish his examination, inspect his books,papers, and writings in the presence of hisassignees, or any person appointed by them,and bring with him each time any twopersons to assist him ; and every suchinsolvent after he shall have obtained hiscertificate shall, upon demand in writinggiven to him or left at his usual or lastknown place of abode, attend the assigneesto settle any accounts between his estate andany debtor to or creditor thereof, or attendany court to give evidence touching thesame, or do any act necessary for getting inor protecting the said estate, for which

* attendance he shall be paid by the assigneesout of his estate such sum not exceeding fiverupees per day, as they shall deemreasonable.

32. In all cases where it shall be made to Searchappear to the satisfaction of the District warrants inCourt that there is reason to suspect and what cases

to be at libertyto inspectbooks, &c.:

after allowanceof certificate toattendassignees insettlingaccounts.

Allowance forattendance.

V/33

Cap.103] INSOLVENTS

No actionagainst personsfor actingunder warrantof the courtwithoutdemand ofcopy ofwarrant.

Proof in suchactions thatdefendant ispetitioningcreditorsufficient torender himliable.

believe that any property of any insolvent isconcealed in any house or other place notbelonging to such insolvent, the court maygrant a search warrant to the Fiscal or otherperson appointed by the court, and it shallbe lawful for such Fiscal or other person toexecute such warrant according to the tenorthereof; and such Fiscal or other personshall be entitled to the same protection as isallowed by law in execution of a searchwarrant for property reputed to be stolen,and every such search warrant shall be inthe form L in the Schedule, or to the likeeffect.

33. No action shall be brought againstany Fiscal or other person appointed by thecourt for anything done in obedience to anywarrant of the court, unless demand of theperusal and copy of such warrant hath beenmade or left at the usual place of abode ofsuch Fiscal or other person by the partyintending to bring such action, or by hisregistered attorney or agent, in writing,signed by the party demanding the same,and unless the same hath been refused orneglected for six days after such demand;and if after such demand, and compliancetherewith, any action be brought againstsuch Fiscal or person so appointed, withoutmaking the petitioning creditor defendant, ifliving, the court at the trial of such action,on the production and proof of suchwarrant, shall give judgment for thedefendant, notwithstanding any defect ofjurisdiction in the court by which suchwarrant shall have been granted ; and ifsuch action be brought against thepetitioning creditor and the Fiscal or personso appointed, the court shall, on proof ofsuch warrant, give judgment for such Fiscalor person so appointed, notwithstandingany such defect of jurisdiction; and if thejudgment shall be given against thepetitioning creditor, the plaintiff shallrecover his costs against him, to be taxed soas to include such costs as the plaintiff isliable to pay to the Fiscal or person soappointed as aforesaid.

34. In any such action brought againstthe petitioning creditor, either alone orjointly with any Fiscal or other person soappointed by the court, for anything done inobedience to the warrant of the court, proofby the plaintiff in such action that thedefendant or defendants or any of them is

or are petitioning creditor or creditors shallbe sufficient for the purpose of making suchdefendant or defendants liable in the samemanner and to the same extent as if the actcomplained of in such action had been doneor committed by such defendant ordefendants.

35. It shall be lawful for any Fiscal, Fiscal mayacting under warrant of the court, to break break open the

, 1 , 1 i insolventsopen any house, chamber, shop, warehouse, doors,&c,anddoor, trunk, or chest of any insolvent where seize upon hissuch insolvent or any of his property shall body orbe reputed to be, and seize upon the body or propertyproperty of such insolvent; and if theinsolvent be in prison or in custody, it shallbe lawful for the Fiscal to seize any propertyof the insolvent (his necessary wearingapparel only excepted) in the custody orpossession of such insolvent, or of any otherperson, in any prison or place where suchinsolvent is in custody.

36. If the insolvent be not in prison or Insolvent notcustody at the date of the adjudication, he in custody to be free from shall be free from arrest or imprisonment by arrest in

any creditor in coming to surrender, and coming toafter such surrender during the time by this surrender, &c.Ordinance limited for such surrender, andfor such further time as shall be allowed himfor finishing his examination, and for suchtime after finishing his examination until hiscertificate be allowed, as the court shallfrom time to time by endorsement upon thesummons of such insolvent, or by writingunder the hand of the Judge of such court,think fit to appoint; and whenever any If in custody,insolvent is in prison or in custody under he may bc

brought up toany process, attachment, execution, be examinedcommitment, or sentence, the court may by or towarrant directed to the person in whose surrender, &c.;

and if for debt,custody he is confined cause him to be the court may,brought before it at any sitting, either public except inor private, and if he be desirous to certain cases,surrender, he shall be so brought up and the order hisexpense thereof shall be paid out of his releaseestate, and such person shall be indemnifiedby the warrant of the court for bringing upsuch insolvent; and where any person whohas been adjudged insolvent, and hassurrendered and obtained his protectionfrom arrest, is in prison or in custody fordebt at the time of his obtaining suchprotection, the court may, except in thecases next hereinafter mentioned, order hisimmediate release, either absolutely or uponsuch conditions as it shall think fit:

V/34

INSOLVENTS [Cap.103

Court mayorder release ofinsolvent if incustody fordebt contractedby fraud, &c.,when detainedfor more thanone year.

If arrested, tobe dischargedon producingprotection.

Provided that the court shall not ordersuch release where it shall appear by anyjudgment, order, commitment, or sentenceunder which the insolvent is in prison or incustody, or by the record or entry of anysuch judgment, order, commitment, orsentence, and the pleadings or proceedingspreviously thereto, that he is in prison or incustody for any debt contracted by fraud orbreach of trust, or by reason of anyprosecution against him whereby he hadbeen convicted of any offence, or for anydebt contracted by reason of any judgmentin any proceeding for breach of the revenuelaws, or in any action for breach of promiseof marriage, seduction, criminalconversation, libel, slander, assault, battery,malicious arrest, malicious trespass, ormaliciously filing or prosecuting a petitionfor sequestration of the estate of any personas insolvent, unless it shall appear to thesatisfaction of the court that the insolventshall at the time of this Ordinance cominginto operation, or at any time thereafter,have been in prison or custody under or byreason of any such judgment, order,commitment, or sentence as aforesaid for aperiod of or exceeding one year;

Provided also that such release shall in nowise affect any rights of the creditor atwhose suit the insolvent may be in prison orin custody against the insolvent, except theright of detaining him in prison or incustody whilst protected from imprisonmentby order of the court.

37. If any insolvent shall be arrested fordebt in coming to surrender, or shall afterhis surrender and while protected by orderof the court be so arrested, he shall, onproducing such protection to the officerwho shall arrest him, and giving such officera copy thereof, be immediately discharged;and if any officer shall detain any suchinsolvent after he shall have shown suchprotection to him, except for so long asshall be necessary for obtaining a copy ofthe same, such officer shall forfeit to suchinsolvent, for his own use, the sum of fiftyrupees for every day he shall detain suchinsolvent, to be recovered by action in anycompetent court in the name of suchinsolvent, with costs of suit.

Petitioningcreditor toproceed at hisown cost untilchoice ofassignees.

No objectionto petition forsequestration,that the act ofinsolvency wasconcerted.

Court mayproceednotwith-standing deathof insolvent.

Court maysummon andexamineinsolvent.

38. The petitioning creditor shall, at hisown cost, file and prosecute his petitionuntil the choice of assignees by thecreditors; and the court shall at or after thesitting for such choice make order for thepayment thereof out of the estate of theinsolvent.

39. No petition for sequestration of theestate of any person as insolvent shall bedismissed, nor any adjudication thereonreversed, by reason only that the petition, oradjudication, or act of insolvency has beenconcerted or agreed upon between theinsolvent, his registered attorney or agent,or any of them, and any creditor or otherperson.

40. If any person shall die after he hasbeen adjudged insolvent, the court mayproceed in the matter of such insolvency asif such insolvent were living.

41. The court may summon anyinsolvent before it, whether such insolventshall have obtained his certificate or not;and in case he shall not come at the timeappointed by the court (having no lawfulimpediment made known to and allowed bythe court at such time), it shall be lawful forthe court, by warrant, to authorize anddirect the Fiscal, or any person the courtshall think fit, to apprehend and arrest suchinsolvent and bring him before the court;and upon the appearance of such insolvent,or if such insolvent be present at any sittingof the court, it shall be lawful for the courtto examine or to permit the examination bythe creditors of such insolvent after he shallhave made and signed a declaration in theform M in the Schedule, either by word ofmouth or on interrogatories in writing,touching all matters relating to his trade,dealings, or estate, or which may tend todisclose any secret grant, conveyance, orconcealment of his lands, goods, money, ordebts, and to reduce his answers intowriting, which examination, so reduced intowriting, the said insolvent shall sign.

42. It shall be lawful for the court to Court maysummon before it the wife of any insolvent,and to examine her, or to permit herexamination by the creditors of suchinsolvent, after she shall have made andsigned a declaration in the form M in the

summon andexamine theinsolvent'swife.

V/35

Cap.103] INSOLVENTS

If insolventkeep out of theway, or beabout to quitSri Lanka, &c.,warrant.

Court maysummonpersonsuspected ofhavinginsolvent'sproperty, &c.

and if they failto attend,warrant.

Schedule, either by word of mouth orinterrogatories in writing, for the findingout and discovery of the property of suchinsolvent concealed, kept, or disposed of bysuch wife in her own person or by her ownact, or by any other person, and she shallincur such danger or penalty for not comingbefore the court, or for refusing to makeand sign such declaration and to beexamined, or to sign her examination, or fornot fully answering to the satisfaction of thecourt, as is hereinafter provided.

43. If in any case it shall be proved tothe satisfaction of the court that anyinsolvent is keeping out of the way andcannot be personally served with asummons, and that due pains have beentaken to effect such personal service, or thatthere is probable cause for believing that heis about to quit Sri Lanka, or to remove orconceal any of his goods or effects, unless hebe forthwith apprehended, it shall be lawfulfor such court, by warrant, to authorize anddirect the Fiscal, or any person it shall thinkfit, to apprehend and arrest such insolvent,and bring him before the court to beexamined in like manner as if he appearedupon a summons.

44. After any person has been adjudgedinsolvent it shall be lawful for the DistrictCourt to summon before it any personknown or suspected to have any of theestate of the insolvent in his possession, orwho is supposed to be indebted to theinsolvent, or any person the court maybelieve capable of giving informationconcerning the person, trade, dealings, orestate of the insolvent, or concerning anyact of insolvency committed by him, or anyinformation material to the full disclosure ofhis dealings ; and the court may require suchperson to produce any books, papers, deeds,writings, or other documents in his custodyor power which may appear to the courtnecessary to the verification of thedeposition of such person, or to the fulldisclosure of any of the matters which thecourt is authorized to inquire into; and ifsuch person so summoned as aforesaid shallnot come before the court at the timeappointed, having no lawful impediment(made known to the court at the time of itssitting, and allowed by it), it shall be lawfulfor the court by warrant to authorize and

direct the Fiscal, or other person thereinnamed for that purpose, to apprehend andarrest such person and bring him before thecourt for examination.

45. Where it shall be shown by affidavitto the satisfaction of the court that anyperson to whom any such summons isdirected as aforesaid is keeping out of theway and cannot be personally servedtherewith, and that due pains have beentaken to effect such personal service, it shallbe lawful for the court to order byendorsement upon the summons that thedelivery of a copy of such summons to thewife or servant, or some adult inmate of thehouse or family of the person at his usual orlast known place of abode or business, andexplaining the purport thereof to such wife,servant, or inmate, shall be equivalent topersonal service; and in every such case theservice of such summons in pursuance ofsuch order shall be and be deemed andtaken to be of the same force and effect toall intents and purposes as if the party towhom such summons was directed had beenpersonally served therewith.

46. Upon the appearance of any personsummoned or brought before the courtupon any warrant as aforesaid, or if anyperson be present at any sitting of the court,it shall be lawful for the court to examine orto permit the examination by the creditorsof every such person upon oath, either byword of mouth or by interrogatories inwriting, concerning the person, trade,dealings, or estate of any insolvent, orconcerning any act of insolvency by anyinsolvent committed, and to reduce intowriting the answers of every such person;and such answers so reduced into writingsuch person examined is hereby required tosign.

47. If any such person examined as lastaforesaid shall, in and by his examinationsigned as aforesaid, and also in and by aseparate writing in the form N in the

• Schedule, admit that he is indebted to theinsolvent in any sum of money upon thebalance of accounts, it shall be lawful forthe court, if it think fit, to order (in the form0 in the Schedule, or to the like effect) thatsuch person shall forthwith, or at such timeand in such manner as to the court mayseem expedient, pay the amount so

Service ofsummonswhere personkeeps out ofthe way.

Power toexaminepersonssummoned orpresent at anysitting.

Court mayorder paymentof debtsadmitted to bedue to theestate:

V/36

INSOLVENTS [Cap.103

admitted, in full discharge thereof, to theassignees, together with the costs of andincident to the summons of such person, ifthe court think fit to award costs, or thecourt may, if it think fit, in the said form 0,order the assignees to pay the costs of theperson summoned out of the estate of the

such order to insolvent; and every such order shall havehave effect of the effect of a judgment in the said court,judgment and may be enforced accordingly:

Provided always that no such order shallbe made unless such party has beeninformed by the Judge of the effect of suchadmission before the same is signed asaforesaid;

Provided also, that if part only of the sumactually due be so admitted, or if the courtmake an order for part only of the sumadmitted, the residue may be recoverable inthe same manner in all respects as if no suchadmission or order had been made.

Court may 48. The District Court may order thatorder letters for 3 period of three months from the dateaddressed toinsolvent to be 0f any such Order all Post letters directed orredirected or addressed to any insolvent at the place ofdelivered to which he shall be described in the petitionassignees, &c. „ . . . „ , . . . . ,for sequestration of his estate as insolvent,

shall be redirected, readdressed, sent, ordelivered by the Postmaster-General, or theofficers acting under him, to the assigneesnamed in such order; and upon notice bytransmission of a duplicate of any suchorder to the Postmaster-General, or theofficers acting under him, by the assigneesor other person named in such order, of themaking of such order, it shall be lawful forthe Postmaster-General, or such officers asaforesaid, to readdress, redirect, send, ordeliver all such post letters to the assigneesnamed in such order accordingly; and thecourt may, upon any application to be madefor that purpose, renew any such order for alike or for any other less period as often asmay be necessary.

POWER OF THE DISTRICT COURT OVERCERTAIN DESCRIPTIONS OF PROPERTY

Goods in the 49. If any insolvent, at the time hepossession, commits the act of insolvency, shall, by theorder, or .disposition of consent and permission of the true ownerthe insolvent to thereof, have in his possession, order, orbe deemed his disposition any goods or effects whereof hepropety was reputed owner, or whereof he had taken

upon him the sale or disposition as owner,the court shall have power to order the sameto be sold or disposed of for the benefit ofthe creditors of the insolvent:

Provided that nothing herein containedshall invalidate or affect any transfer orassignment of any ship or vessel, or anyshare thereof, made as a security for anydebt, either by way of mortgage orassignment, duly registered according to theprovisions of the Merchant Shipping Act.

50. But if there shall be found amongthe insolvent's property at the time of itsseizure any wares, goods, or merchandiseconsigned to him for the special purpose ofbeing sold by him on commission, orintrusted in his hands for any specificpurpose, and which evidently are theproperty of the consignor or person sointrusting, notice thereof shall betransmitted to the owners as soon aspossible, in order that they may take thenecessary measures to secure their property,and the same shall be carefully preserved,and shall be delivered over to the lawfulowners.

51. If any person adjudged insolventunder this Ordinance shall (except upon themarriage of any of his children, or for somevaluable consideration) have conveyed,assigned, or transferred to any of hischildren, or to any other person, any real orpersonal property whatsoever, or havedelivered or made over to any such personany bills, bonds, notes, or other securities,or have transferred his debts to any otherperson or into any other person's name,such first-mentioned person being at thetime of making any such conveyance,assignment, transfer, or delivery insolvent,the court shall have power to order any suchproperty to be sold and disposed of for thebenefit of the creditors under theinsolvency; and every such sale shall bevalid against the insolvent and such childrenand persons, and against all personsclaiming under him.

• 52. No seizure or detention of the goodsof any insolvent for rent made after an actof insolvency, and whether before or afterthe filing of the petition for sequestration ofhis estate, shall be available for more thanone year's rent accrued prior to the day ofthe filing of such petition, but the landlordor person to whom the rent shall be due

Assignments ofvessels underthe MerchantShipping Act.

Consignedgoods, &c., tobe given up tothe owner.

Conveyances,&c., byinsolventwithoutvaluableconsideration,void.

Seizure ofgoods for rentnot to beavailable formore than oneyear's rentdue; thelandlord toprove for theresidue.

V/37

Cap.103] INSOLVENTS

Whereinsolvent is atrustee, thecourt mayorderconveyance orassignment toanothertrustee.

Title toproperty soldnot to beimpeachedunlessinsolvencydisputed withina certain time.

The court,afteradjudication,may order anyagent of theinsolvent todeliver over allmoneys, &c.

shall be allowed to come in as creditor forthe overplus of the rent due, and for whichthe goods seized shall not be available.

53. If any insolvent shall as trustee beseized, possessed of, or entitled to, eitheralone or jointly, any real or personal estate,or any interest secured upon or arising outof the same, or shall have standing in hisname as trustee, either alone or jointly, anyfunds or annuities, or any of the stock ofany public company in Sri Lanka, it shall belawful for the court, on the petition of theperson entitled in possession to the receiptof the rents, issues, and profits, dividends,interest, or produce thereof, on due noticegiven to all other persons (if any) interestedtherein, to order the assignees, and allpersons whose act or consent thereto isnecessary, to convey, assign, or transfer thesaid estate, interest, funds, or annuities tosuch person as the said court shall think fit,upon the same trusts as the said estate,interest, funds, or annuities were subject tobefore the insolvency, or such of them asshall be then subsisting and capable oftaking effect, and also to receive and payover the rents, issues, and profits, dividends,interest, or produce thereof as the said courtshall direct.

54. No title to any real or personalestate sold under any insolvency shall beimpeached by the insolvent, or any personclaiming under him, in respect of any defectin the petition for sequestration or in any ofthe proceedings under the same, unless theinsolvent shall, within the time allowedby this Ordinance, have commencedproceedings to dispute, dismiss, or annul thepetition or adjudication thereunder, andduly prosecuted the same.

55. After the adjudication of insolvencyin any case shall have been advertised in theGazette, it shall be lawful for the court toorder any treasurer or other officer, or anybanker, attorney, registered attorney orother agent of the insolvent, to pay anddeliver over to the assignees, to the credit ofthe estate of such insolvent, all moneys orsecurities for moneys in his custody,possession, or power as such officer oragent, and which he is not by law entitled toretain against the insolvent or his assignees,

TRANSACTIONS WITH THE INSOLVENT, ANDEXECUTIONS AGAINST HIS PROPERTY UP TOTHE TIME OF THE FILING OF THE PETITION

FOR SEQUESTRATION OF HIS ESTATE ASINSOLVENT, OR WITHIN A LIMITED TIME

PREVIOUSLY THERETO

56. All payments really and bona fidemade by any insolvent, or by any person onhis behalf, before the filing of a petition forsequestration of his estate as insolvent toany creditor of such insolvent, and allpayments really and bona fide made to anyinsolvent before the filing of such petition,and all conveyances by any insolvent bonafide made and executed before the filing ofsuch petition, and all contracts, dealings,and transactions by and with any insolventreally and bona fide made and entered intobefore the filing of such petition, and allexecutions and attachments against thelands of any insolvent bona fide executed byseizure, and all executions and attachmentsagainst the goods and effects of anyinsolvent bona fide executed and levied byseizure and sale before the date of the filingof such petition, shall be deemed to be validnotwithstanding any prior act of insolvencyby such insolvent committed, provided theperson so dealing with or paying to or beingpaid by such insolvent, or at whose suit oron whose account such execution orattachment shall have issued, had not at thetime of such payment, conveyance, contract,dealing, or transaction, or at the time ofsuch executing or levying such execution orattachment, or at the time of making anysale thereunder, notice of any prior act ofinsolvency by him committed:

Provided always that nothing hereincontained shall be deemed or taken to givevalidity to any payment, or to any deliveryor transfer of any goods or effects made byany insolvent being a fraudulent preferenceof any creditor of such insolvent, or to anyconveyance or mortgage made or givenby any insolvent by way of fraudulentpreference of any creditor of such insolvent,or to any execution founded on a judgmenton a power of attorney to confess judgment,or consent to a judgment given by anyinsolvent by way of fraudulent preference.

Payment byinsolvent,

conveyances byhim;

contracts anddealings withhim,

andexecutions •

in what casesvalid, if nonotice of act ofinsolvency;

but not toextend toFraudulentpreferences,&c.

V/38

INSOLVENTS [Cap.103

57. No purchase from any insolventbona fide and for valuable considerationwhere the purchaser had notice at the timeof such purchase of an act of insolvency bysuch insolvent committed, shall beimpeached by reason thereof, unless apetition for sequestration of the estate ofsuch insolvent shall have been filed withintwelve months after such act of insolvency.

58. Every transaction, dealing, transfer,delivery, alienation, mortgage, pledge, orpayment by any insolvent to or with anycreditor of such insolvent, or to or with anyother person, which by the law of Englandat the corresponding period would be andbe deemed to be a fraudulent preference ofone creditor before other creditors in anyproceeding in bankruptcy, or in any suit oraction, shall, in the like case arising withinSri Lanka be and be deemed to be afraudulent preference according to the trueintent and meaning of this Ordinance.

59. Every power of attorney to confessjudgment* in any personal action given byany insolvent after the commencement ofthis Ordinance, and within two months ofthe filing of a petition for sequestration ofhis estate by or against such insolvent, andbeing for or in respect of (wholly or in part)an antecedent debt or money demand, andevery consent to a judgment given byany insolvent at any time after thecommencement of this Ordinance, andwithin two months of the filing of any suchpetition, in any action commenced bycollusion with the insolvent, and notadversely or purporting to have been givenin an action, but having been in fact givenbefore the commencement of any actionagainst the insolvent, such insolvent beingunable to meet his engagements at the timeof giving such power of attorney* orconsent (as the case may be), shall bedeemed and taken to be null and void,whether the same shall have been given bysuch insolvent in contemplation of thesequestration of his estate as insolvent ornot.

STAMPS60. No deed, conveyance, assignment,

admission, or other assurance of or to orrelating solely to any lands, or to anymortgage, charge, or other incumbranceupon, or any estate, right, or interest of andin any lands, or personal estate, being theestate of or belonging to any insolvent, orpart or parcel thereof, and which after theexecution of such deed, conveyance,assignment, or assurance respectively shalleither be or remain the estate and propertyof such insolvent or of the assigneesappointed or chosen under any insolvency,and no power of attorney, order, certificateof conformity, affidavit, or other instrumentor writing whatsoever relating solely to theestate or effects of any insolvent, or to anypart thereof, or to any proceedings underany insolvency, and no affidavit, bond, orother proceeding under this Ordinancerelating solely to insolvency matters, shallbe liable to any stamp duty, save and exceptsuch stamp duty as is provided in Part V ofSchedule A of the Stamp Ordinance.

61. The provisions contained in theOrdinance for the time being in forcerelating to stamps shall (so far as the sameare applicable and consistent with theprovisions of this Ordinance), in all casesnot hereby expressly provided for, be of fullforce and effect with respect to the stampsto be provided under and by virtue of thisOrdinance, and shall be applied and put inexecution for collecting and securing thesums of money denoted thereby, and forpreventing, detecting, and punishing allfrauds, forgeries, and other offences relatingthereto, as fully and effectually to all intentsand purposes as if such provisions had beenherein repeated and specially enacted withreference to the said last-mentioned stampsand sums of money respectively.

APPOINTMENT BY THE COURT OFPROVISIONAL ASSIGNEES

• 62. It shall be lawful for the DistrictCourt, on cause shown by any personinterested in the due administration of theinsolvent estate at any time after theadjudication of insolvency, by order of

Deeds andotherinstrumentsrelating toinsolvency notliable to stampduty.

Provisions ofStampOrdinance toextend tostamps underthis Ordinance.

As toappointmentby court ofprovisionalassignee.

Bona fidepurchases notto beimpeached bynotice of act ofinsolvency,unless petitionbe filed withintwelve monthsafter the act ofinsolvency.

Fraudulentpreferencesaccording tothe law ofEngland to bedeemed such inlike caseswithin SriLanka.

Certain powersof attorney toconfessjudgment andconsents tojudgments,given withintwo months offiling petitionto be null andvoid.

•Sections 31 and 32 of the Civil Procedure Code relating to warrants and powers of attorney to confessjudgment are repealed by Law No. 20 of 1977.

V/39

Cap.103] INSOLVENTS

Removal ofprovisionalassignee.

Provisionalassignee not tosell propertywithoutauthority ofcourt.

Effect ofappointment ofprovisionalassignee.

Assignees whenand howchosen.

Court mayreject orremove anyperson chosenas unfit

court to appoint one or more fit person orpersons to be assignee or assignees of anyinsolvent estate provisionally arid until thecreditors of the said estate shall have madechoice of assignees.

63. Provisional assignees may beremoved at the meeting of creditors for thechoice of assignees if the said creditors shallthink fit, or may then be chosen asassignees, but shall and may, until soremoved, act in the collection,administration, and distribution of the saidestate in all respects the same as assigneeselected by the creditors are by thisOrdinance authorized or required to do.

64. No such provisional assignees shallproceed to make sale of any part of the saidestate without the authority for that purposeof the said court first had and obtained.

65. Every order of court appointingprovisional assignees shall, so soon as made,have the effect in law to vest in suchprovisional assignees for the uses andpurposes of the sequestration, and untiltheir removal, all the present and futureestate of the insolvent, real and personal, asfully and completely to all intents andpurposes as the said estate is by virtue ofsections 70 and 71 of this Ordinance vestedin the assignees chosen by the creditors.

CHOICE OF ASSIGNEES, AND THEIR RIGHTSAND DUTIES

66. At the first public sitting appointedby the court under any insolvency, or at anyadjournment thereof, assignees of theinsolvent's estate and effects shall and maybe chosen and appointed; and all creditorswho have proved debts to the amount ofone hundred rupees and upwards shall beentitled to vote in such choice ; and also anyperson authorized by letter of attorney fromany such creditor, upon proof of theexecution thereof, either by affidavit or byoath before the court viva voce; and thechoice and appointment shall be made bythe major part in value of the creditor| soentitled to vote:

Provided that the court shall have powerto reject any person so chosen who shallappear to such court unfit to be an assignee,or to remove any assignee; and upon such

rejection or removal a new choice andappointment of another assignee shall bemade in like manner.

67. If one or more of the partners of afirm be adjudged insolvent, any creditor towhom the insolvent is indebted jointly withthe other partners of the firm, or any ofthem , shall be entitled to prove his debt for of of voting in thethe purpose only of voting in the choice ofassignees and of being heard against theallowance of the insolvent's certificate, or ofeither of such purposes; but such creditorsshall not receive any dividend out of theseparate estate of the insolvent until all theseparate creditors shall have received thefull amount of their respective debts.

68. In no case shall it be competent forthe creditors to elect as assignee theinsolvent himself, nor any person related tothe insolvent by consanguinity or affinitywithin the fourth degree, nor any minor, norany attorney-at-law, nor any person notresident within Sri Lanka, nor any personhaving an interest opposed to the generalinterest of the creditors in the insolventestate, nor any person declared to beincapable of being elected by virtue of theprovisions in the next succeeding sectioncontained.

69. If any person elected as assigneeshall be proved to the satisfaction of theDistrict Court to have, either directly orindirectly, given or promised to give to anycreditor of the insolvent any species ofvaluable consideration whatsoever, in orderto obtain the vote of such creditor at thechoice of assignees, or to have agreed tosecure and make good to any creditor somecertain sum or dividend in discharge ordiminution of his debt, upon condition or inorder that such creditor should give his voteto such assignee, or to have offered oragreed, in case any creditor of the insolventshould consent to vote for such assignee, toabstain from opening up or investigatingsome previous transactions between suchcreditor and the insolvent which were, orwere supposed to be, of questionablevalidity, or to have contrived or been privyto any plan or arrangement by which debtsor securities really belonging to some one ormore persons have been divided amongst agreater number of persons for the purpose

i Joint creditor entitled to

prove under' separate estate for the purpose

. choice ofassignees.

Whoincompetent tobe appointedassignee.

Acts ofassigneeentitling thecourt to setelection asidand declareoffenderdisqualified.

V/40

INSOLVENTS [Cap.103

Movableproperty tovest inassignees.

Immovableproperty tovest inassignees.

merely of increasing the number of votes atthe election for assignees and therebyinfluencing the same, or to have undertakento share with any creditor of the insolvent,in return for his vote, the commission orremuneration to be awarded to him as suchassignee, the court shall declare suchassignee to have forfeited the office of suchassignee in regard to the insolvent estate forwhich he shall have been elected, and to beincapable of being again elected thereto;and it shall be lawful for such court, if it•should so think fit, to further declare thatthe person so offending shall be incapable ofbeing elected an assignee under theprovisions of this Ordinance for and duringhis natural life, or for such period as suchcourt shall determine and adjudge ; and anyperson interested in the due administrationof the insolvent estate may apply by motionto such court to declare any such assignee tohave forfeited his office by reason of anysuch misconduct as aforesaid ; and as oftenas a vacancy in the office of assignee shallbe created by any such forfeiture, the courtdeclaring the same shall order a newassignee to be chosen by the creditors, andthe same proceedings shall be had thereonas on the original election of assignees.

70. When any person shall have beenadjudged an insolvent, all his personal estateand effects, present and future, wheresoeverthe same may be found or known, and allproperty which he may purchase, or whichmay revert, descend, be devised orbequeathed, or come to him before he shallhave obtained his certificate, and all debtsdue or to be due to him, wheresoever thesame may be found or known, and theproperty, right, and interest in such debts,shall become absolutely vested in theassignees for the time being, for the benefitof the creditors of the insolvent, by virtue oftheir appointment; and after suchappointment neither the insolvent nor anyperson claiming through or under him shallhave power to recover the same, nor tomake any release or discharge thereof; butsuch assignees shall have like remedy torecover the same in their own names as theinsolvent himself might have had if he hadnot been adjudged insolvent.

71. When any person shall have beenadjudged an insolvent, all lands in SriLanka to which any insolvent is entitled,and all interest to which such insolvent isentitled in any such lands, and of which he

might according to the laws of Sri Lankahave disposed, and all such lands in SriLanka as he shall purchase, or as shalldescend, be devised, revert to, or come tosuch insolvent before he shall have obtainedhis certificate, and all deeds, papers, andwritings respecting the same, shall becomeabsolutely vested in the assignees for thetime being, for the benefit of thecreditors'of the insolvent, by virtue of theirappointment, without any deed ofconveyance for that purpose, and as often asany such assignee shall die or be lawfullyremoved or displaced, and a new assigneeshall be duly appointed, such of theaforesaid real estate as shall remain unsoldor unconveyed, shall, by virtue of suchappointment, vest in the new assignee, eitheralone or jointly with the existing assignees,as the case may require, without anyconveyance for that purpose.

72. If the assignees of the estate andeffects of any insolvent having or beingentitled to any land under a conveyance tohim, or under an agreement for any suchconveyance, subject to any perpetual yearlyrent reserved by such conveyance oragreement, or having or. being entitled toany lease or agreement for a lease, shallelect to take such land, or the benefit ofsuch conveyance or agreement, or such leaseor agreement for a lease, as the case may be,the insolvent shall not be liable to pay anyrent accruing after the filing of the petitionfor sequestration of his estate against him,or to be sued in respect of any subsequentnon-observance or non-performance of theconditions, covenants, or agreements in anysuch conveyance or agreement, or lease oragreement for a lease; and if the assigneesshall decline to take such land, or thebenefit of such conveyance or agreement orlease or agreement for lease, the insolventshall not be liable if, within fourteen daysafter he shall have had notice that theassignees have declined, he shall deliver upsuch conveyance or agreement or lease oragreement for lease to the person thenentitled to the rent, or having so agreed to

•lease, as the case may be; and if theassignees shall not (upon being theretorequired) elect whether they will accept ordecline such land or conveyance oragreement for conveyance, or such leaseor agreement for a lease, any person entitledto such rent, or having so conveyed oragreed to convey, or leased or agreed to

Insolvent notliable to rentsor covenants inconveyances,leases, &c., ifassigneesaccept thesame.

How ifassigneesdecline.

How assigneescompelled toelect.

V/41

Cap. 103] INSOLVENTS

Assignees howcompelled toelect whetherthey will abideby or declineagreement forthe purchase ofland.

Assignees mayexecute powervested in theinsolvent.

Court mayorder insolventto join inconveyances.

Propertymortgaged orpledged may beredeemed bythe assignees.

lease, or any person claiming under him,shall be entitled to apply to the DistrictCourt, and the District Court may orderthem to elect and deliver up suchconveyance or agreement for conveyance orlease, or agreement for lease, in case theyshall decline the same, and the possession ofthe premises, or may make such other ordertherein as it shall think fit.

73. If any insolvent shall have enteredinto any agreement for the purchase of anyestate or interest in land, the vendor thereof,or any person claiming under him, if theassignees shall not (upon being theretorequired) elect whether they will abide byand execute such agreement or abandon thesame, may apply to the District Court, andthe court may thereupon order them todeliver up the agreement and the possessionof the premises to the vendor or personclaiming under him, or may make suchother order therein as such court shall thinkfit.

74. All powers vested in any insolventwhich he might legally execute for his ownbenefit may be executed by the assignees forthe benefit of the creditors in such manneras the insolvent might have executed thesame.

75. It shall be lawful for the DistrictCourt, upon the application of the assigneesor of any purchaser from them of any partof the insolvent's estate, if such insolventshall not try the validity of the adjudication,or if there shall have been a judgmentestablishing its validity, to order theinsolvent to join in any conveyance of suchestate or any part thereof; and if he shallnot execute any such conveyance within thetime directed by the order, such insolventand all persons claiming under him shall bestopped from objecting to the validity ofsuch conveyance, and all estate, right, ortitle which such insolvent had therein shallbe as effectually barred by such order as ifsuch conveyance had been executed by him.

76. If any insolvent shall have granted,conveyed, assured, or pledged any real orpersonal estate, or deposited any deeds,such grant, conveyance, assurance, pledge,or deposit being upon condition or power ofredemption at a future day by payment ofmoney or otherwise, the assignees may,before the time of the performance of suchcondition, make tender or payment of

money or other performance, according tosuch condition, as fully as the insolventmight have done, and after such tender,payment, or performance such real orpersonal estate may be sold and disposed offor the benefit of the creditors.

77. In every case the assignees may, withthe approbation of the District Court,appoint the insolvent himself to superintendthe management of the estate or to carry onthe trade of such insolvent for behoof of thecreditors, and in all or any other respectsthey may think fit to aid them inadministering the insolvent's estate andeffects, in such manner and on such terms asthey may think best for the benefit of thepersons interested in the estate.

78. The assignees shall be subject to theorders of the District Court in their conductas assignees; and it shall be lawful for thecourt at all times to summon the assignees,and require them to produce all books,papers, deeds, writings, and otherdocuments relating to the insolvency in theirpossession, and to direct them to pay anddeliver over to the court all moneys, books,papers, deeds, writings, and otherdocuments which may have come to theirpossession or custody as such assignees.

79. If any person adjudged insolventshall at the time of the adjudication ofinsolvency be a member of a firm, it shall belawful for the District Court to authorizethe assignees, upon their application tocommence or prosecute any action in thename of such assignees and of the remainingpartner against any debtor of thepartnership, and such judgment, decree, ororder may be obtained therein as if suchaction had been instituted with the consentof such partner, and if such partner shallexecute any release of the debt or demandfor which such action is instituted suchrelease shall be void :

Provided that every such partner shallhave notice given him of such application,and be at liberty to show cause against it,and if no benefit be claimed by him byvirtue of the said proceedings shall be"indemnified against the payment of anycosts in respect of such action in suchmanner as the court may direct; and it shallbe lawful for such court, upon theapplication of such partner, to direct that hemay receive so much of the proceeds of suchaction as such court shall direct.

Assignees mayappoint theinsolvent tomanage theestate.

Assignees tosubject toorders of thecourt.

Where one offirm isinsolvent, thecourt mayauthorizeaction in nameof the assignee;and of theother partner.

Partner to havenotice, andmay showcause.

V/42

INSOLVENTS [Cap.103

As to sale ofestates byassignees,conditions ofsale, &c.

As to wearingapparel, tools,&c., ofinsolvent.

Assignees, withleave of thecourt, maybring or defendactions;

may compounddebts;

80. The assignees shall, subject to thedirections of the creditors given at anymeeting of such creditors, forthwith proceedto make sale of all the property belongingto the insolvent, real and personal, givingdue notice thereof in the Gazette, and alsosuch other notice as they shall think f i t :

Provided that from the sale of the saidpersonal property shall be excepted, untilthe creditors shall determine thereon, thewearing apparel, bedding, householdfurniture, and tools of trade of the insolventand his family ; and

Provided that the sale of all real propertyshall take place in such manner and undersuch conditions as shall be determined onby the greater part in number and value ofthe creditors present at any meeting dulysummoned;

Provided, however, that such conditionsshall be subject to the approval ordisapproval of the District Court on theapplication of any person interested therein.

81. It shall be lawful for the assignees,with the consent of the greater part innumber and value of the creditors who shallhave proved their debts present at anymeeting of creditors whereof, and of thepurpose of which ten days' notice shall havebeen given in the Gazette, to permit theinsolvent to retain, for his own use, thewhole or such part of his wearing apparel,bedding, household furniture and tools oftrade excepted from the sale of his personalproperty, as the said creditors shall agree toallow to the said insolvent:

Provided that every such permission shallbe subject to the approval or disapproval ofthe District Court on the application of anyperson interested in the due administrationof the estate.

82. The assignees, with the leave of theDistrict Court first obtained, uponapplication to such court, but not otherwise,may commence, prosecute, or defend anyaction which the insolvent might havecommenced and prosecuted or defended,and in such case the costs to which they maybe put in respect of such action shall beallowed out of the proceeds of the estateand effects of the insolvent; and withlike leave of the court, after notice to thecreditors, and subject to such condition(if any) as to obtaining the consent of

creditors, or any proportion of them as thecourt shall think fit to direct, the assigneesmay take such reasonable part of any debtdue to the insolvent's estate as may bycomposition be obtained, or may give timeor take security for the payment of suchdebts, and may, with like leave of the court,submit to arbitration any difference ordispute between the assignees and any otherperson for or on account or by reason ofanything relating to the estate and effects ofthe insolvent.

83. If the assignees shall agree inmanner aforesaid to refer any matter indispute to arbitration, such agreement ofreference may be made a rule of court,whether such agreement contain a clause tothat effect or not.

84. All persons from whom theassignees shall have recovered any real orpersonal estate, either by judgment ordecree, are hereby discharged, in case thepetition for sequestration or theadjudication of insolvency thereunder beafterwards annulled or dismissed, from alldemands which may thereafter be made inrespect of the same by the person againstwhom such adjudication was made, and allpersons claiming under him ; and all personswho shall, without action, bona fide deliverup possession of any real or personal estateto the assignees, or pay any debt claimed bythem, are hereby discharged from all claimof any such person as aforesaid in respect ofthe same, or any person claiming underhim;

Provided the person so delivering up anyreal or personal estate, or paying any debt,shall not have had notice of an action orother proceeding to dispute or annul thepetition for sequestration or adjudicationthereunder, and such action or otherproceeding shall not have been commencedand prosecuted within the time and inmanner allowed by this Ordinance-

85. If any assignee, indebted to theestate of which he is such assignee in respectof money, being part of the estate of theinsolvent retained or employed by him,become insolvent, and obtain his certificate,it shall have the effect only of freeing hisperson from arrest and imprisonment, buthis future effects, (his tools of trade,necessary household goods, and thenecessary wearing apparel of himself, hiswife, and children excepted,) shall remain

and referdisputes toarbitrators.

Reference toarbitrationmay be made arule of court.

If petition oradjudication beannulled, &c.,persons fromwhom theassignees haverecovered, orwho have bonafide paid theassignees, &c.,dischargedfrom claims bythe insolvent.

Assigneeindebted to theestatebecominginsolvent, hisfuture propertyliable,

V/43

Cap. 103] INSOLVENTS

Suits not toabate by deathor removal ofassignees.

Inactionagainst adebtor to theestate, in whatcase he maypay money intocourt.

Limitation ofactions.

liable for so much of his debt to the estateof which he was assignee as shall not bepaid by dividends under his insolvency, andfor interest at the rate of nine per centumper annum on the whole debt.

86. Whenever any assignee shall die orbe removed, or a new assignee shall bechosen, no action shall be thereby abated,but the court in which any action isdepending may, upon the suggestion of suchdeath or removal and new choice, allow thename of the surviving or new assignee to besubstituted in the place of the former, andsuch action shall be prosecuted in the nameor names of the said surviving or newassignee or assignees in the same manner asif he had originally commenced the same.

87. If the assignees commence anyaction for any money due to the insolvent'sestate before the time allowed for theinsolvent to dispute the insolvency shallhave elapsed, any defendant in any suchaction shall be entitled, after notice given tothe assignees, to pay the same or any partthereof into the court in which such actionis brought, and all proceedings with respectto the money so paid into court shallthereupon be stayed until such time shallhave elapsed ; and if within that time the-insolvent shall not have commenced suchaction or other proceeding as allowed bythis Ordinance, and prosecuted the samewith due diligence, the money shall be paidout of court to the assignees, but otherwiseshall abide the event of such action or otherproceeding, and upon such event shall bepaid out of court, either to the assignees orthe person adjudged insolvent, as the courtshall direct; and after such payment ofmoney so made into court it shall not belawful for the person so adjudged insolventto proceed against the defendant forrecovery of the same money.

88. Every action brought against anyperson for anything done in pursuance ofthis Ordinance shall be commenced withinthree months next after the act committed ;and if there be a judgment for thedefendant, or if the plaintiff shall benonsuited or discontinue his action afterappearance thereto, the defendant shallreceive such indemnity as to all costs,charges, and expenses incurred in and about

any such action as shall be taxed by theproper officer in that behalf, subject to bereviewed in like manner and by the sameauthority as any other taxation of costs bysuch officer.

LAST EXAMINATION

89. The last examination of theinsolvent shall be at the second publicsitting of the court for the insolvent tosurrender and conform, as advertised in theGazette, and the insolvent shall preparesuch balance sheet and accounts, and insuch form, as the court shall direct, andshall subscribe such balance sheet andaccounts, and file the same in court, anddeliver a copy thereof to the assignees tendays at least before the day appointed forthe last examination, or the adjournmentday thereof for that purpose ; and suchbalance sheet and accounts, before such lastexamination, may be amended from time totime as occasion shall require and suchcourt shall direct ; and the insolvent shallmake oath of the truth of such balance sheetand accounts whenever he shall be dulyrequired by the court so to do ; and the lastexamination of the insolvent shall in no casebe passed unless his balance sheet shall havebeen duly filed as aforesaid , and the courtmay on the application of the assignees orof the insolvent make such allowanceout of the estate of the insolvent for thepreparation of such balance sheet andaccounts, and to such person, as the courtshall think fit, in any case in which it shallbe made to appear to the satisfaction of thecourt, from the nature of the accounts orother good cause, that the insolventrequired assistance in that behalf.

90. If any insolvent apprehended by anywarrant of the court shall, within the timeallowed for him to surrender, submit to beexamined, and in all things conform, heshall have the same benefit as if he hadvoluntarily surrendered.9

91. It shall be lawful for the court, at thetime appointed for the last examination ofthe insolvent, or at any enlargement oradjournment thereof, to adjourn suchexamination sine die ; and in such case theinsolvent shall be free from arrest orimprisonment for such time (if any) as such

The insolventto preparebalance sheetand accounts,&c,

Insolventsapprehendedby warrant.

Court mayadjourn lastexaminationsine die.

V/44

INSOLVENTS [Cap.103

court shall from time to time byendorsement on the summons of theinsolvent, think fit to appoint.

92. Whenever any insolvent is in prisonor in custody under any process,attachment, execution, commitment orsentence, the court may appoint a person toattend him from time to time to produce tohim his books, papers, and writings, inorder that he may prepare his balance sheet,and show the particulars of his estate andeffects, previous to his last examination anddiscovery thereof.

PROOF OF DEBTS AND PAYMENTS IN FULL

93. At the sittings appointed by thecourt under section 30 of this Ordinance,and at every adjournment thereof, and atevery other sitting held for proof of debts,and whereof and of the purport whereof tendays' notice shall have been given in theGazette, every creditor of the insolvent mayprove his debt by his own oath or affidavit ;and all bodies politic and public companiesincorporated or authorized to sue or bringactions may prove by an agent, providedsuch agent shall in his deposition swear thathe is such agent, and that he is authorized tomake such proof:

Provided always that if it shall appear tothe court that any clerk, agent, or otherperson is more fully cognizant of the natureof the debt sought to be proved than thecreditor is, the said court shall allow suchclerk, agent, or other person to prove suchdebt by his oath or affidavit ; and

Provided that any creditor who is out ofSri Lanka may, in case he have no knownagent in Sri Lanka capable of proving thealleged debt, make the necessary affidavitbefore some person duly qualified toadminister oaths in the place where heresides, such person being certified to be soqualified by some sufficient authority in thatbehalf;

Provided also that it shall be lawful forthe court to examine upon oath, either byword of mouth or by interrogatories inwriting, every person claiming to prove adebt, or to require such further proof, andto examine such other persons in relationthereto, as such court shall think fit.

94. Every person with whom any Bonafideinsolvent shall have really and bona fide creditors for debtscontracted any debt or demand before the contractedfiling of the petition for sequestration of his after an act ofestate shall, notwithstanding any prior act insolvency mayof insolvency committed by such insolvent, provebe admitted to prove the same as if no suchact of insolvency had been committed ;provided such person had not at the timethe same was contracted notice of any act ofinsolvency by such insolvent committed.

95. The court, out of the estate andeffects of the insolvent, shall order paymentof all taxes due by the insolvent at the timeof his insolvency up to the end of thecurrent quarter.

96. If any person already appointed oremployed, or who may be hereafterappointed to or employed, in any office inthe National Savings Bank, or in the LoanBoard, or in any friendly society dulyincorporated, and being intrusted with thekeeping of the accounts, or having in hishands or possession by virtue of his office oremployment any moneys or effectsbelonging to such Savings Bank, LoanBoard, or society, or any deeds or securitiesrelating to the same, shall become insolvent,the court shall, upon application made bythe order of any such society, or anycommittee thereof, or the major part ofthem assembled at any meeting thereof,order