ashish verma (law officer) 18 February 2014

Can creditor file insolvency suit

in one of my case, DRT has issued RC in favor of Bank , title deed mortgaged with the Bank is fake , though the borrower is traceable,but there is no known property of the borrower ,

now my question is what bank should do in such situation should case be adjouned sine die .

somebody suggested me that we should file insolvency suit against the borrower, i donot know how it will help us .

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3 Replies

T. Kalaiselvan, Advocate (Advocate) 19 February 2014

Insolvency suit/petition can be filed by the borrower and not against the borrower.

ashish verma (law officer) 19 February 2014

thanks for your reply

Does it mean that THE PROVINCIAL INSOLVENCY ACT 1920 SECTION 6(2) has become meaning less today?

narendra.s.p (Chief Manager(Law)) 23 February 2014

Insolvency petition can be filed by the creditor. The object is to bring pressure on the Borrower or guarantor to pay the Loan or debt. A notice can be issued to the Borrower or guarantor in the format and as per Rules prescribed in this behalf by each state. If a person is declared as an undischarged insolvent, then he has to forgo his following rights:

1. His contractual rights are suspended

2. If he holds a pubic office or is a public servant, he will be liable to vacate the office on this ground alone.

3. A director of a company declared as insolvent cannot hold on to the post.

4. A member of legislature or parliament will have to forgo his seat.

A threat by way of such notice will do the magic, especially in respect of willful defaulters