REGISTERED No.
रजिस्ट्रीसं ० डी-(डी) -72
DDFCRETARIATLIBA R
CE INDIA *
भारत का राजपत्र The Gazette of India
असाधारण
EXTRAORDINARY
भाग II-खण्ड 1
PART I- Section 1
प्राधिकार से प्रकाशित
PUBLISHED BY AUTHORITY
सं० 29]
नई दिल्ली, शनिवार, अगस्त 5 , 1978/ श्रवण 14 , 1900
No. 29]
NEW DELHI , SATURDAY, AUGUST 5 , 1978 / SRAVANA 14, 1500
इस भाग में भिन्न पृष्ठ संख्या दी जाती हैं जिससे कि यह अलग संकलन के रूप में रखा जा सके ।
Separate paging is given to this Part in order that it may be filed as a separate compilation
MINISTRY OF LAW , JUSTICE AND COMPANY AFFAIRS
(Legislative Department )
New Delhi , the 5th August , 1978 / Sravana 14, 1900 ( Saka ) .
The following Act of Parliament received the assent of the President on the 4th August , 1978 , and is hereby published for general informa tion:-
THE INSOLVENCY LAWS (AMENDMENT ) ACT , 1978
No. 28 OF 1978
[4th August , 1978 ]
An Act further to amend the Presidency - towns Insolvency Act , 1909 and the Provincial Insolvency Act , 1920
BE it enacted by Parliament in the Twenty -ninth Year of the Republic of India as follows :-
1. (1 ) This Act may be called the Insolvency Laws (Amendment) Act, 1978 .
Short title and commen- cement , (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette , appoint .
2.In the Presidency- towns Insolvency Act , 1909,-
Amend- mentof Act 3 of 1909.
(a) section 9 ( excluding the Explanation ) shall be renumbered as sub -section ( 1) thereof, and after sub - section ( 1 ) as so renumber ed, the following sub - sections shall be inserted, namely:-
" (2) Without prejudice to the provisions of sub - section ( 1 ) , a debtor commits an act of insolvency if a creditor , who has obtained a decree or order against him for the payment of money (being a decree or order which has become final and the execu- tion whereof has not been stayed ) , has served on him a notice (hereafter in this section referred to as the insolvency notice ) as provided in sub- section ( 3 ) and the debtor does not comply with that notice within the period specified therein:
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Provided that where a debtor makes an application under sub -section (5) for setting aside an insolvency notice-
(a) in a case where such application is allowed by the Court, he shall not be deemed to have committed an act of insolvency under this sub- section; and
(b) in a case where such application is rejected by the Court, he shall be deemed to have committed an act of in- solvency under this sub -section on the date of rejection of the application or the expiry of the period specified in the insolvency notice for its compliance, whichever is later:
Provided further that no insolvency notice shall be served on a debtor residing , whether permanently or temporarily , out- side India, unless the creditor obtains the leave of the Court . therefor.
(3 ) An insolvency notice under sub - section (2 ) shall-
(a) be in the prescribed form;
(b ) be served in the prescribed manner ;
( c) specify the amount due under the decree or order and require the debtor to pay the same or to furnish security for the payment of such amount to the satisfaction of the creditor or his agent ;
(d) specify for its compliance a period of not less than one month after its service on the debtor or , if it is to be served on a debtor residing, whether permanently or tem- porarily , outside India, such period ( being not less than one month) as may be specified by the order of the Court grant- ing leave for the service of such notice;
(e) state the consequences of non - compliance with the. notice.
(4) No insolvency notice shall be deemed to be invalid by reason only that the sum specified therein as the amount due under the decree or order exceeds the amount actually due, un- less the debtor , within the period specifled in the insolvency notice for its compliance , gives notice to the creditor that the sum specified in the insolvency notice does not correctly represent the amount due under the decree or order :
Provided that if the debtor does not give any such notice as aforesaid, he shall be deemed to have complied with the insol- vency notice if , within the period specified therein for its com- pliance, he takes such steps as would have constituted a com- pliance with the insolvency notice had the actual amount due been correctly specified therein .
(5) Any person served with an insolvency notice may, with- in the period specified therein for its compliance, apply to the Court to set aside the insolvency notice on any of the following grounds , namely:--
(a) that he has a counter- claim or set off against the creditor which is equal to or is in excess of the amount due SEC . 1 ]
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under the decree or order and which he could not , under any law for the time being in force, prefer in the suit or proceeding in which the decree or order was passed;
(b) that he is entitled to have the decree or order set aside under any law providing for the relief of indebtedness and that-
(i) he has made an application before the competent authority under such law for the setting aside of the decree or order ; or
(ii) the time allowed for the making of such appli- cation has not expired;
(c) that the decree or order is not executable under the provisions of any law referred to in clause (b ) on the date of the application. " ;
(b) in section 112, in sub -section (2) , after clause (m ) , the fol- lowing clause shall be inserted, namely : --
" (mm) the form of the insolvency notice under clause (a) , and the manner in which such notice may be served under clause (b ) , of sub - section (3 ) of section 9; " .
3. In the Provincial Insolvency Act , 1920,-
Amend- ment of Act5 of 1920, (a) section 6 (excluding the Explanation ) shall be renumbered as sub - section ( 1 ) thereof, and after sub - section (1) as so renumber- ed, the following sub - sections shall be inserted , namely :-
" (2) Without prejudice to the provisions of sub- section ( 1 ) , a debtor commits an act of insolvency if a creditor, who has obtained a decree or order against him for the payment of money (being a decree or order which has become final and the execu- tion whereof has not been stayed ) , has served on him a notice (hereafter in this section referred to as the insolvency notice) as provided in sub -section ( 3 ) and the debtor does not comply with that notice within the period specified therein:
Provided that where a debtor makes an application under sub -section ( 5) for setting aside an insolvency notice-
(a) in a case where such application is allowed by the District Court , he shall not be deemed to have committed an act of insolvency under this sub-section ; and
(b) in a case where such application is rejected by the District Court, he shall be deemed to have committed an act of insolvency under this sub-section on the date of rejection of the application or the expiry of the period specified in the insolvency notice for its compliance , whichever is later :
Provided further that no insolvency notice shall be served on a debtor residing , whether permanently or temporarily, out- side India , unless the creditor obtains the leave of the District Court therefor .
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(3) An insolvency notice under sub- section ( 2) shall--
(a) be in the prescribed form;
(b) be served in the prescribed manner;
(c) specify the amount due under the decree or order and require the debtor to pay the same or to furnish security for the payment of such amount to the satisfaction of the creditor or his agent;
(d) specify for its compliance a period of not less than one month after its service on the debtor or, if it is to be served on a debtor residing , whether permanently or tem- porarily , outside India, such period ( being not less than one month) as may be specified by the order of the District Court granting leave for the service of such notice ;
(e) state the consequences of non - compliance with the notice.
(4) No insolvency notice shall be deemed to be invalid by reason only that the sum specified therein as the amount due under the decree or order exceeds the amount actually due, un- less the debtor, within the period specified in the insolvency notice for its compliance , gives notice to the creditor that the sum specified in the insolvency notice does not correctly represent the amount due under the decree or order : Provided that if the debtor does not give any such notice as aforesaid , he shall be deemed to have complied with the insolv- ency notice if , within the period specified therein for its compli- ance , he takes such steps as would have constituted a compli- ance with the insolvency notice had the actual amount due been correctly specified therein .
(5) Any person served with an insolvency notice may , with- in the period specified therein for its compliance , apply to the District Court to set aside the insolvency notice on any of the following grounds , namely : -
(a) that he has a counter- claim or set- off against the creditor which is equal to or is in excess of the amount due under the decree or order and which he could not , under any law for the time being in force , prefer in the suit or pro- ceeding in which the decree or order was passed;
(b) that he is entitled to have the decree or order set aside under any law providing for the relief of indebtedness and that-
(i) he has made an application before the competent authority under such law for the setting aside of the decree or order ; or
(ii) the time allowed for the making of such appli- cation has not expired;
Sec. 11
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(c) that the decree or order is not executable under the provisions of any law referred to in clause (b ) on the date of the application. " ;
(b) in section 79 , in sub-section ( 2 ) , clause (a) shall be re- lettered as clause ( aa ) thereof , and before clause (aa) as so re- lettered, the following clause shall be inserted, namely : -
"(a) the form of the insolvency notice under clause ( a) , and the manner in which such notice may be served under clause ( b ) , of sub- section ( 3 ) of section 6 ; " .
S. HARIHARA IYER , Secy . to the Govt . of India .
PRINTED BY THE GENERAL MANAGER , GOVERNMENT OF INDIA PRESS , MINTO ROAD , NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS , DELHI, 1978