The Presidency-Towns Insolvency Act, 1909

The Presidency-towns Insolvency Act, 1909, is a significant piece of legislation that governs insolvency proceedings in the major presidency towns of India. This Act outlines the procedures for declaring a debtor insolvent, the administration of the insolvent’s property, and the rights and liabilities of creditors. It establishes the framework for the adjudication of insolvency petitions, the appointment of official assignees, and the distribution of assets among creditors. The Act is crucial for understanding the legal framework related to insolvency in major Indian cities.

Act Background and Ministry:
The Presidency-towns Insolvency Act, 1909, was enacted during the British colonial rule in India. It was designed to amend the existing laws relating to insolvency in the presidency towns. The Act falls under the purview of the then-existing legislative council of India, which was under the British administration. Currently, the subject matter of the Act would fall under the domain of the Ministry of Law and Justice or the equivalent ministry dealing with insolvency matters in the central and state governments of India.

Enactment Date, Number of Chapters, Number of Sections:
The Act was enacted on March 12, 1909. It is structured into 127 sections, divided into 12 parts.

Act Governed By:
The Act is primarily governed by the High Courts in the Presidency towns of Calcutta, Madras, and Bombay. The Act also outlines the roles and responsibilities of various officials, including the official assignee, the Registrar, and other officers of the Court.

On Whom it is Applicable:
The Act is applicable to debtors and creditors in the Presidency towns of Calcutta, Madras, and Bombay. It applies to individuals, firms, and other entities who are subject to insolvency proceedings within these jurisdictions.

Penalties/Punishments:
The Act does not specify penalties or punishments in the traditional sense. Instead, it focuses on establishing clear procedures and consequences for insolvency, including:

• Imprisonment: For failing to attend meetings, to submit to examination, or to deliver up property.

• Contempt of Court: If an insolvent wilfully fails to perform their duties, they may be deemed guilty of contempt of court.

• Refusal of Discharge: The Court may refuse to grant an absolute discharge to an insolvent who has committed an offense under the Act.

Important Pointers:

• Acts of Insolvency: The Act defines various acts of insolvency that can lead to an adjudication order.

• Insolvency Petition: The Act outlines the conditions under which a creditor or a debtor may file an insolvency petition.

• Order of Adjudication: The Act specifies the effect of an order of adjudication, which vests the insolvent’s property in the official assignee.

• Official Assignee: The Act establishes the role of the official assignee, who is responsible for the administration of the insolvent’s property.

• Public Examination: The Act provides for the public examination of the insolvent to investigate their affairs.

• Composition and Schemes of Arrangement: The Act allows for the submission of proposals for composition or schemes of arrangement with creditors.

• Discharge of Insolvent: The Act outlines the conditions for the discharge of an insolvent from their debts.

• Proof of Debts: The Act specifies the rules for proving debts in insolvency.

• Priority of Debts: The Act establishes the priority of certain debts in the distribution of the insolvent’s property.

Act Copy: