Law of Insolvency

LAW OF INSOLVENCY

In India, the law of insolvency is contained in two enactments, i.e. the Presidency Towns Insolvency Act 1909, which applies to the Presidency Towns ( Bombay, Calcutta and Madras) and the Provincial Insolvency Act 1920, which applies to the mofussil, i.e., the whole of the rest of India except Part B States and the schedule districts. Over and above these two statues certain rules made by various High Courts under the rule making power granted them by section 112 of the Presidency Towns Insolvency Act and section 70 of the Provincial Insolvency Act supplement the law of insolvency in India. These rule contain important provisions with regard to practice and procedure in insolvency. Both the presidency Towns Insolvency Act and the Provincial Insolvency Act are based on the English bankruptcy Law inasmuch as many of the provinces of the latter are incorporated in each of the former statutes. The decisions on the English bankruptcy Acts are considered whenever necessary in constructing the provisions of the Indian statutes.

a)   Petition by debtor to be adjudged an insolvent,

b)   Petition by creditor to adjudge debtor insolvent,

c)    Petition for discharge,

d)   Agreement for composition with creditors with surety