Protection from liability

Notwithstanding any provisions of this Act or any other law to the contrary, no action, prosecution, suit or proceedings whatsoever shall lie against the Official Receiver, trustee, the Accountant General, the Registrar or any other person in respect of any act or omission made bona fide in the exercise of his duties and functions under this Act. 85 SCHEDULE 1 BANKRUPTCY ACT Meeting of Creditors (Section 13) 1. The first meeting of creditors shall be summoned for a day not later than one month after the date of the receiving order, unless the court for any special reason deems it expedient that the meeting be summoned for a later day. 2. The Official Receiver shall summon the meeting by giving not less than fifteen days’ notice of the time and place thereof in the Gazette and in a local paper. 3. The Official Receiver shall also, as soon as practicable, send to each creditor mentioned in the debtor’s statement of affairs, a notice of the time and place of the first meeting of creditors, accompanied by a summary of the debtor’s statement of affairs, including the causes of his failure, and any observation thereon which the Official Receiver may think fit to make; but the proceedings at the first meeting shall not be invalidated by reason of any such notice or summary not having been sent or received before the meeting. 4. The meeting shall be held at such place as is in the opinion of the Official Receiver most convenient for the majority of the creditors. 5. The Official Receiver or the trustee may at any time summon a meeting of creditors and shall do so whenever so directed by the court, or so requested in writing by one-sixth in value of the creditors, Provided that the creditors so requesting shall deposit with the trustee or the Official Receiver, as the case may be, a sum 86 Bankruptcy sufficient to pay the costs of summoning the meeting, such sum to be repaid to them out of the estate if the creditors or the court so direct. 6. Meetings subsequent to the first meeting, shall be summoned by sending notice of the time and place thereof to each creditor at the address given in his proof, or if he has not proved, at the address given in the debtor’s statement of affairs, or at such other address as may be known to the person summoning the meeting. 7. The Official Receiver, or some person nominated by him, shall be the Chairperson at the first meeting. The Chairperson at subsequent meetings shall be such person as the meeting by resolution appoints. 8. A person shall not be entitled to vote as a creditor at the first or any other meeting of creditors unless he has duly proved a debt provable in bankruptcy to be due to him from the debtor, and the proof has been duly lodged before the time appointed for the meeting. 9. A creditor shall not vote at any such meeting in respect of any un- liquidated or contingent debt, or any debt the value of which is not ascertained. 10. For the purpose of voting, a secured creditor shall, unless he surrenders his security, state in his proof the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance (if any) due to him, after deducting the value of his security. If he votes in respect of the whole debt, he shall be deemed to have surrendered his security, unless the court on application is satisfied that the omission to value the security has arisen from inadvertence. 11. A creditor shall not vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him, unless he is willing to treat the liability to him thereon Bankruptcy 87 of every person who is liable thereon antecedently to the debtor, and against whom a receiving order has not been made, as a security in his hands, and to estimate the value thereof and for the purposes of voting, but not for the purposes of dividend, to deduct it from his proof. 12. It shall be competent to the trustee or to the Official Receiver within twenty-eight days after a proof estimating the value of a security as aforesaid has been made use of in voting at any meeting, to require the creditor to give up the security for the benefit of the creditors generally on payment of the value so estimated, with an addition thereto of twenty per centum, Provided that where a creditor has put a value on such security, he may at any time before he has been required to give up such security as aforesaid, correct such valuation by a new proof, and deduct such new value from his debt, but in that case such addition of twenty per centum shall not be made if the trustee requires the security to be given up. 13. If a receiving order is made against one partner of a firm, any creditor to whom that partner is indebted jointly with the other partners of the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors and shall be entitled to vote thereat. 14. The Chairperson of a meeting shall have power to admit or reject a proof for the purpose of voting, but his decision shall be subject to appeal to the court. If he is in doubt whether the proof of a creditor should be admitted or rejected, he shall mark the proof as objected to, and shall allow the creditor to vote, subject to the vote being declared invalid in the event of the objection being sustained. 15. A creditor may vote either in person or by proxy. 16. Every instrument of proxy shall be in the prescribed form, and shall be issued by the Official Receiver, or, after the 88 Bankruptcy appointment of a trustee, by the trustee, and every insertion therein shall be in the handwriting of the person giving the proxy, or of any manager or clerk or other person in his regular employment or of any justice of the peace. 17. General and special forms of proxy shall be sent to the creditors, together with a notice summoning a meeting of creditors, and neither the name nor the description of the Official Receiver, or of any other person, shall be printed or inserted in the body of any instrument of proxy before it is so sent. 18. A creditor may give a general proxy to his manager or clerk or any other person in his regular employment. In such case the instrument of proxy shall state the relation in which the person to act thereunder stands to the creditor. 19. A creditor may give a special proxy to any person to vote at any specified meeting or adjournment thereof on all or any of the following matters, (a) for or against any specific proposal for a composition or scheme of arrangement; (b) for or against the appointment of any specified person as trustee at a specified rate of remuneration, or as member of the committee of inspection, or for or against the continuance in office of any specified person as trustee or member of a committee of inspection; (c) on all questions relating to any matter, other than those above referred to, arising at any specified meeting or adjournment thereof. 20. A proxy shall not be used unless it is deposited with the Official Receiver or trustee before the meeting at which it is to be used. Bankruptcy 89 21. Where it appears to the satisfaction of the court that any solicitation has been used by or on behalf of a trustee or receiver in obtaining proxies or in procuring the trusteeship, or receivership except by the direction of a meeting of creditors, the court shall have power, if it thinks fit, to order that no remuneration shall be allowed to the person by whom or on whose behalf such solicitation may have been exercised, notwithstanding any resolution of the committee of inspection or of the creditors to the contrary. 22. A creditor may appoint the Official Receiver to act in the manner prescribed as his general or special proxy. 23. The Chairperson of a meeting may, with the consent of the meeting, adjourn the meeting from time to time and from place to place. 24. A meeting shall not be competent to act for any purpose except the election of a Chairperson, the proving of debts, and the adjournment of the meeting, unless there are present, or represented thereat, at least three creditors, or all the creditors if their number does not exceed three. 25. If within half an hour from the time appointed for the meeting, a quorum of creditors is not present or represented, the meeting shall be adjourned to the same day in the following week at the same time and place, or to such other day as the Chairperson may appoint, not being less than seven or more than twenty-one days. 26. The Chairperson of every meeting shall cause minutes of the proceedings at the meeting to be drawn up, and fairly entered in a book kept for that purpose, and the minutes shall be signed by him or by the Chairperson of the next ensuing meeting. 27. No person acting either under a general or special proxy shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer, in a position 90 Bankruptcy to receive any remuneration out of the estate of the debtor otherwise than as a creditor rateably with the other creditors of the debtor, Provided that where any person holds special proxies to vote for the appointment of himself as trustee, he may use the said proxies and vote accordingly. Bankruptcy 91 SCHEDULE 2 BANKRUPTCY ACT Proof of Debts (Section 36) Proof in Ordinary Cases 1. Every creditor shall prove his debt as soon as may be after the making of a receiving order. 2. A debt may be proved by delivering or sending through the post in a prepaid letter to the Official Receiver, or, if a trustee has been appointed, to the trustee, an affidavit verifying the debt. 3. The affidavit may be made by the creditor himself or by some person authorised by or on behalf of the creditor. If made by a person so authorised, it shall state his authority and means of knowledge. 4. The affidavit shall contain or refer to a statement of account showing the particulars of the debt, and shall specify the vouchers, if any, by which the same can be substantiated. The Official Receiver or trustee may at any time call for the production of the vouchers. 5. The affidavit shall state whether the creditor is or is not a secured creditor. 6. A creditor shall bear the cost of proving his debt, unless the court otherwise specially orders. 7. Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors before the first meeting and at all reasonable times. 92 Bankruptcy 8. A creditor proving his debt shall deduct therefrom all trade discounts, but he shall not be compelled to deduct any discount, not exceeding six per centum on the net amount of his claim, which he may have agreed to allow for payment in cash. Proof by Secured Creditors 9. If a secured creditor realises his security, he may prove for the balance due to him, after deducting the net amount realised. 10. If a secured creditor surrenders his security to the Official Receiver or trustee for the general benefit of the creditors, he may prove for his whole debt. 11. If a secured creditor does not either realise or surrender his security, he shall, before ranking for dividend, state in his proof the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him after deducting the value so assessed. 12. (a) Where a security is so valued, the trustee may at any time redeem it on payment to the creditor of the assessed value. (b) If the trustee is dissatisfied with the value at which a security is assessed, he may require that the property comprised in any security so valued be offered for sale at such times and on such terms and conditions as may be agreed on between the creditor and the trustee, or as, in default of such agreement, the court may direct. If the sale be by public auction, the creditor, or the trustee on behalf of the estate, may bid or purchase, Bankruptcy 93 Provided that the creditor may at any time by notice in writing, require the trustee to elect whether he will or will not exercise his power of redeeming the security or requiring it to be realised, and if the trustee does not, within six months after receiving the notice, signify in writing to the creditor his election to exercise the power, he shall not be entitled to exercise it, and the equity of redemption, or any other interest in the property comprised in the security which is vested in the trustee, shall vest in the creditor and the amount of his debt shall be reduced by the amount at which the security has been valued. 13. Where a creditor has so valued his security, he may at any time amend the valuation and proof on showing to the satisfaction of the trustee or the court, that the valuation and proof were made bona fide on a mistaken estimate, or that the security has diminished or increased in value since its previous valuation; but every such amendment shall be made at the cost of the creditor, and upon such terms as the court shall order, unless the trustee shall allow the amendment without application to the court. 14. Where a valuation has been amended in accordance with the foregoing rule, the creditor shall forthwith repay any surplus dividend which he may have received in excess of that to which he would have been entitled on the amended valuation, or as the case may be, shall be entitled to be paid out of any money for the time being available for dividend, any dividend or share of dividend which he may have failed to receive by reason of the inaccuracy of the original valuation, before that money is made applicable to the payment of any future dividend, but he shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment. 15. If a creditor, after having valued his security, subsequently realises it, or if it is realised under rule 12, the net amount realised shall be substituted for the amount of any 94 Bankruptcy valuation previously made by the creditor, and shall be treated in all respects as an amended valuation made by the creditor. 16. If a secured creditor does not comply with the foregoing rules, he shall be excluded from all share in any dividend. 17. Subject to the provisions of rule 12, a creditor shall in no case receive more than one hundred cents in the dollar, and interest as provided by this Act. Proof in Respect of Distinct Contracts 18. If a debtor was at the date of the receiving order liable in respect of distinct contracts as a member of two or more distinct firms, or as a sole contractor, and also as member of a firm, the circumstance that the firms are in whole or in part composed of the same individuals, or that the sole contractor is also one of the joint contractors, shall not prevent proof in respect of the contracts, against the properties respectively liable on the contracts. Periodical Payments 19. When any rent or other payment falls due at stated periods, and the receiving order is made at any time other than one of those periods, the person entitled to the rent or payment may prove for a proportionate part thereof up to the date of the order as if the rent or payment became due from day to day. Interest 20. On any debt or sum certain, payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the receiving order and provable in bankruptcy, the creditor may prove for interest at a rate not exceeding six per centum per annum to the date of the order from the time when the debt or sum was payable, if the Bankruptcy 95 debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made giving the debtor notice that interest will be claimed from the date of the demand until the time of payment. 21. Where a debt has been proved upon a debtor’s estate, and such debt includes interest, or any pecuniary consideration in lieu of interest, such interest or consideration shall, for the purposes of dividend, be calculated at a rate not exceeding six per centum per annum, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full. Debt Payable at a Future Time 22. A creditor may prove for a debt not payable when the debtor committed an act of bankruptcy, as if it were payable presently, and may receive dividends equally with the other creditors, deducting only thereout a rebate of interest at the rate of six per centum per annum computed from the declaration of a dividend to the time when the debt would have become payable, according to the terms on which it was contracted. Admission or Rejection of Proof 23. The trustee shall examine every proof and the grounds of the debt and in writing admit or reject it, in whole or in part, or require further evidence in support of it. If he rejects a proof, he shall state in writing to the creditor the grounds of the rejection. 24. If the trustee thinks that a proof has been improperly admitted, the court may, on the application of the trustee, after notice to the creditor who made the proof, expunge the proof or reduce its amount. 96 Bankruptcy 25. If a creditor is dissatisfied with the decision of the trustee in respect of a proof, the court may, on the application of the creditor, reverse or vary the decision. 26. The court may also expunge or reduce a proof upon the application of a creditor if the trustee declines to interfere in the matter, or, in the case of a composition or scheme, upon the application of the debtor. 27. For the purpose of any of his duties in relation to proofs, the trustee may administer oaths and take affidavits. 28. The Official Receiver, before the appointment of a trustee, shall have all the powers of a trustee with respect to the examination, admission and rejection of proofs, and any act or decision of his in relation thereto shall be subject to the like appeal.