Section 208 in Civil Court Rules of the High Court of Judicature at Patna
208.
The following rules may be cited as "the Provincial Insolvency Rules"-(1)Every insolvency petition shall be entered in the Register of Insolvency petitions in Form No. (R) 2-A.(2)All insolvency proceedings may, at such times and subject to such restrictions as the District Judge may prescribe, be inspected by the Receiver, the debtor and any creditor who has proved, or any legal representative on their behalf.(3)[ (i) The insolvency notice to be given under Section 6 (2) of the Act shall be in Form No. (P) 65A. [Inserted by C.S. No. 52, dated 7.1.1980.](ii)The notice shall state-(a)the name and address of the creditor (s).(b)the name and address of the debtor, decree (s) or order (s) for payment of money on which the creditors or creditors claims are based with particulars thereof (viz., the number of the suit or proceeding in which the decree (s) or order (s) has/have been made the date thereof and the amount as claimed due thereunder).(c)the aggregate amount due to the creditor (s) (in case there are more than one decree or order); the fact that the decree (s) or order (s) has/have become final and that the execution thereof has not been stayed.(d)particulars of decree (s) or order (s) viz., the number of the suit or proceeding in which the decree (s) or order (s) has/have been made, the date thereof and the amount due thereunder to such creditor (s).(e)in case there are more than one decree or order, aggregate amount due thereunder to the creditor (s).(f)the date (which shall not be less than one month from the date of the service of the notice) before which compliance with the requirements of the notice is asked for.(iii)The notice shall require the debtor to pay to the creditor (s) the amount claimed or to furnish security for the payment of the amount to the satisfaction of the creditor (s) or his/their agent(s).(iv)Service of insolvency notice shall be personal. Notice shall be served in the manner provided in Rules 9 to 19 of Order V of the Code of Civil Procedure or by the registered post.(v)If the notice is refused, or it is returned unserved and the Court is satisfied that the debtor is keeping out of the way for the purpose of avoiding service, it shall be published in a local daily newspaper and such publication shall be deemed to be sufficient service of notice.(vi)Any person served with an insolvency notice may within the period allowed for compliance with that notice, apply to the Court to set aside the insolvency notice on any of the grounds specified in sub-section (5) of Section 6 of the Act.(vii)Where an application to set aside the insolvency notice has been made and it cannot be disposed of until after the expiry of the period specified in the notice as the day on which the act of insolvency will be complete, no act of insolvency shall be deemed to have been committed under the notice until the application shall be disposed of.]Notices(3)Whenever publication of any notice or other matter is required by the Act, to be made in an Official Gazette, a memorandum referring to and giving the date on which such advertisement appeared, shall be filed with the record and noted in the order-sheet.(4)Notice for an order fixing the date of the hearing of a petition under Section 19(1) shall be forwarded by registered post to each creditor to the address given in the petition. Such notice, where the Court so directs, may, in addition, also be published in the local official Gazette or in some selected newspapers, or in both. The same procedure shall be followed in respect of notices of the date for consideration of a proposal for composition or scheme of arrangement under Section 38 (i).(5)Notice of an order of adjudication under Section 30 is required by the Act to be published in the local official Gazette. The Court may also order that it should be published in such local newspapers as it may direct. When the debtor is a Government servant, a copy of the order shall be sent to the head of the office in which he is employed. The same procedure shall be followed in regard to notices of orders annulling an adjudication under Section 37 (2).(6)The notice to be given by the Court under Section 50 shall be served on the creditor or his pleader and shall be sent through the post by registered letter.(7)The notice to be issued by the Receiver under Section 64 before the declaration of a final dividend to the persons whose claims to be creditors have been notified but not proved, shall be sent through the post by registered letter.(8)Notices of the date of hearing of an application for discharge under Section 41 shall be published in the local Official Gazette or in such local newspapers as the Judge may direct, and copies shall be sent by registered post to all creditors whether they have proved or not.(9)A certificate of an officer of the Court or of an Official Receiver, or an affidavit by a Receiver that any of the notices referred to in the preceding Rules has been duly posted accompanied by the post office receipt, shall be sufficient evidence of such notice having been duly sent to the person to whom the same was addressed.(10)The Court may instead of or in addition to forwarding a notice by registered post under the foregoing Rules cause it to be served in the manner prescribed for the service of summons.(11)In addition to the prescribed methods of publication any notice may be published otherwise in such manner as the Court may direct, for instance, by affixing copies in the Court-house or by beat of drum in the village in which the insolvent resides.Receivers(12)Every appointment of a Receiver shall be by order in writing signed by the Court. Copies of this order sealed with the seal of the Court should be served on the debtor, and forwarded to the person appointed.(13)(i)A Court when fixing the remuneration of a Receiver should, as a Rule, direct it to be in the nature of a commission or percentage of which one part should be payable on the amount realised after deducting any sums paid to secured creditors, out of the proceeds of their securities and the other part on the amount distributed in dividends.(ii)When a Receiver realizes the security of a secured creditor, the Court may direct it additional remuneration to be paid to him with reference to the amount of work which he has done and the benefit resulting to the creditors,(14)The Receiver shall keep a cash-book and such books and other papers as to give a correct view of his administration of the estate, and shall submit his accounts at such times and in such forms as the Court may direct. Such accounts shall be audited by such person or persons as the Court may direct. The costs of the audit shall be fixed by the Court, and shall be paid out of the estate.(15)Any creditor who has proved his debt may apply to the Court for a copy of the Receiver's accounts (or any part thereof) relating to the estate as shown by the cash-book up to date, and shall be entitled to such copy on payment of the charges laid down in Rules of this Court regarding the grant of copies.(15A)The Receiver shall keep a record of his proceedings and shall state in it his reasons for all important acts and decisions. Any person affected by any such act or decision shall be entitled to a copy of the proceedings relating thereto on payment of the charges laid down in the Rules of this Court regarding the grant of copies.(16)In any case in which a meeting of creditors is necessary and in any case in which the debtor proposes a composition or scheme under Section 38, the Receiver shall give seven days' notice to the debtor and every creditor of the time and place appointed for each meeting. Such notices shall be served by registered post.(16A)If on the expiry of one year after the date of the order of adjudication the Receiver has not been able to realize all the property of the insolvent, he shall refer the case to the Court for decision under Section 64 of the Act whether as much has been realized as can be realised without needlessly protracting the receivership.Proof of Debts.(17)A creditor's proofs should be in Form No. (M) 27 with such variations as circumstances may require.(18)In any case in which it shall appear from the debtor's statement that there are numerous claims for wages by workmen and others employed by the debtor, it shall be sufficient if one proof for all such claims is made either by the debtor or by some other person on behalf of all such creditors. Such proof should be in Form No. (M) 28.Procedure where the Debtor is a Firm.(19)Where any notice, declaration, petition, or other document requiring attestation is signed by a firm of creditors or debtors in the firm's name, the partner signing for the firm shall also add his own signature, e.g. "Brown and Co., by James Green, a partner in the said firm."(20)Any notice or petition for which personal service is necessary, shall be deemed to be duly served on all the members of a firm if it is served at the principal place of business of the firm within the jurisdiction of the Court, on any one of the partners, or upon any person having at the time of service the control or management of the partnership business there.(21)The provisions of the last preceding rule shall, so far as the nature of the case will admit, apply in the case of any person carrying on business within the jurisdiction in a name or style other than his own.(22)Where a firm of debtors files an insolvency petition the same shall contain the names in full of the individual partners, and if such petition is signed in the firm's name the petition shall be accompanied by an affidavit made by the partner who signs the petition showing that all the partners concur in filing of the same.(23)An adjudication order made against a firm shall operate as if it were an adjudication order made against each of the persons who at the date of the order is a partner in that firm.(24)In cases of partnership the debtors shall submit a schedule of their partnership affairs, and each debtor shall submit a schedule of his separate affairs.(25)The joint creditors, and each set of separate creditors, may severally accept compositions or schemes of arrangement. So far as circumstances will allow, a proposal accepted by joint creditors may be approved in the prescribed manner, notwithstanding that the proposals or proposal of some or one of the debtors made to their or his separate creditors may not be accepted.(26)Where proposals for compositions or schemes are made by a firm, and by the partners therein individually, the proposals made to the joint creditors shall be considered and then voted upon by them apart from every set of separate creditors; and the proposal made to each set of creditors shall be considered and voted upon by such separate set of creditors apart from all other creditors. Such proposals may vary in character and amount. Where a composition or scheme is approved, the adjudication order shall be annulled only so far as it relates to the estate, the creditors of which have confirmed the composition or scheme.(27)If any two or more of the members of a partnership constitute a separate and independent firm, the creditors of such last mentioned firm shall be deemed to be a separate set of creditors, and to be on the same footing as the separate creditors of any individual member of the firm. And when any surplus shall arise upon the administration of the assets of such separate or independent firm the same shall be carried over to the separate estates of the partners in such separate and independent firm according to their respective rights therein.Sale of Immovable Property of Insolvent.(28)If no Receiver is appointed and the Court, in exercise of its powers under Section 58 of the Act, sells any immovable property of the insolvent, the deed of sale of the said property shall be prepared by the purchaser at his own cost, and shall be signed toy the Presiding Officer of the Court.Dividends.(29)The amount of the dividend may, at the request and risk of the creditor, be transmitted to him by post.(30)When an estate is ordered to be administered in a summary manner under Section 75 of the Act-(i)There shall be no advertisement of any proceedings in the local Government Gazette or in a local newspaper.(ii)The petition and all subsequent proceedings shall be endorsed "Summary case".(iii)The notice of the hearing of the petition to the creditors shall be in Form No. (P) 65.Costs.(31)All proceedings under the Act down to and including the making of an order of adjudication shall be at the cost of the party prosecuting them, but when an order of adjudication has been made, the costs of the petitioning creditor including the costs of the publication of all gazette notices required by the Act or Rules which, by the Act or Rules, the petitioning creditor is required to pay shall be taxed and be payable out of the estate.(32)Before making an order in an insolvency petition presented by a debtor, the Court may require the debtor to deposit in Court a sum sufficient to cover the costs of sending the prescribed notices of the hearing of petition and the costs of the publication of all gazette notices required by the Act or Rules which, by the Act or Rules, the debtor is required to pay.(33)The cost of the publication in the Gazette of-(a)An order fixing the date for the hearing of an insolvency petition under Section 19 (2) shall when the petition is by creditor, be paid by the creditor, and, when the petition is by the debtor, be paid out of the sum deposited in Court by the debtor under clause (32);(b)Notice of a proposal for a composition under Section 38 (1) and notice of an application for discharge under Section 41 (1) shall be paid by the debtor.(34)The publication in the Gazette of-(a)Notice of adjudication under Section 30,(b)Notice to creditors whose claims have been notified but not proved under Section 64,(c)Notice of an order annulling an adjudication under Section 37 (2), shall be made free of charge.(35)No costs incurred by a debtor of, or incidental to, an application to approve a composition or scheme shall be allowed out of the estate if the Court refuses to approve the composition or scheme.(36)If the assets available are not sufficient in any case for taking proceedings necessary for the administration of the estate, the Receiver or Interim Receiver or Official Receiver, as the case may be, may call upon the creditors or any of them to advance the necessary funds, or to indemnify him against the cost of such proceedings. Any assets realized by such proceedings shall be applied, in the first place, towards the repayment of such advances with interest thereon at 6 per cent per annum.Rules For The Disposal of Audit Objections and Audit Reports Relating to Estates Under The Fiduciary Control of The Civil Courts.
