Gujarat High Court Civil Manual (subordinate court practice), 1960
By virtue of the provisions of section 79 of the Provincial Insolvency Act (V of 1920), and of all other powers thereunto enabling the High Court of Judicature at Bombay has, with the previous sanction of the Provincial Government, and in supersession of the Bombay Provincial Insolvency Rules, 1909, made the following rules for carrying into effect the provisions of the said Act :— I. These rules may be called "The Bombay Provincial Insolvency Rules, 1924", and shall apply to all proceedings under the Provincial Insolvency Act, 1920, in any Court subordinate to the High Court of Judicature at Bombay. They shall come into force on the 1st day of December 1924, and shall apply to all proceedings thereafter instituted and, as far as may be, to all proceedings then pending. II. The forms mentioned in these rules are the forms in Appendix D at page 433, Vol. II and shall be used with such variations as circumstances may require. (4) The notice shall require the debtor to pay to the creditor the amount claimed or to furnish security for the payment of the amount to the satisfaction of the creditor or his agent. (5) There shall also be endorsed on every notice an intimation to the debtor that if he has a counter-claim, or set-off, which equals or exceeds the decretal amount or the amount ordered to be paid by him and which he could not lawfully set up in the suit or proceeding in which the decree or order was made against him, he must within the time specified in the notice apply to the Court to set aside the notice. (6) Non-compliance by the debtor with the requirements of the notice within the specified period will be treated as an act of insolvency on the debtor's part. (7) The insolvency notice shall be served on the debtor personally or by registered post. (8) If the notice is refused, or unserved for any other reason, it shall be published in the local newspaper and such publication shall be deemed to be sufficient service of notice. (9) Any person served with an insolvency notice may within the time allowed for compliance with that notice or such further time as the Court may for sufficient reasons see fit to allow apply to the Court to set aside the insolvency notice :— (a) on the ground that he has paid the amount claimed or furnished security for the payment of the amount to the satisfaction of the creditor or his agent ; (b) on the ground that he has a counter-claim or set-off which equals or exceeds the decretal amount or the amount ordered to be paid by him and which he could not lawfully set up in the suit or proceeding in which the decree or order was made ; or (c) on any other ground which would in law entitle him to have the notice set aside. (10) Where an application to set aside the insolvency notice has been made and it cannot be disposed of until after the expiry of the time specified in the notice as the day on which the act of insolvency will be complete, no act of insolvency shall be deemed to have been committed under the notice until the application shall be disposed of. be given a serial number in that register and all subsequent proceedings in the same matter shall bear the same number. (2) Every petition, application, affidavit or order in any proceeding under the Act or under these rules shall be headed by a cause-title in Form No. 1. (3) As soon as may be after proof of any debt is tendered, the Court shall, by order in writing, admit the creditor's claim in whole or in part or reject it, provided that when a claim is rejected in whole or in part the order shall state briefly the reasons for the rejection. (4) A copy of every order rejecting a claim, or admitting it in part only, shall be sent by the Court by registered post to the person making the claim within seven days from the date of the order. (8) The notice to be given under section 33 (3) of the Act shall be served only on the debtor and on the creditors whose names appear in the schedule of creditors and may, if the Court so directs, be served on any or all such creditors by registered post. (9) The Court may instead of or in addition to forwarding a notice by registered post under the foregoing rules cause it to be served in the manner prescribed for the service of summons. (10) In addition to the prescribed methods of publication any notice may be published otherwise in such manner as the Court may direct, for instance, by affixing copies in the Court house or by beat of a drum in the village in which the debtor resides. (11) It shall not be necessary to give notice of the date to which the hearing of a petition or of an application for discharge or the consideration of a proposal is adjourned. (5) An adjudication order made against a firm shall operate as if it were an adjudication order made against each of the persons who at the date of the order is a partner in that firm. (6) In cases of partnership the debtors shall submit a schedule of their partnership affairs, and each debtor shall submit a schedule of his separate affairs. (7) The joint creditors, and each set of separate creditors, may severally accept compositions or schemes of arrangement. So far as circumstances will allow, a proposal accepted by joint creditors may be approved in the prescribed manner, notwithstanding that the proposals or proposal of some one or more of the debtors made to their or his separate creditors may not be accepted. (8) Where proposals for compositions or schemes are made by a firm, and by the partners therein individually, the proposals made to the joint creditors shall be considered and voted upon by them apart from every set of separate creditors; and the proposal made to each set of creditors shall be considered and voted upon by such separate set of creditors apart from all other creditors. Such proposals may vary in character and amount. Where a composition or scheme is approved, the adjudication order shall be annulled only so far as it relates to the estate the creditors of which have confirmed the composition or scheme. (9) If any two or more of the members of a partnership constitute a separate and independent firm, the creditors of such last mentioned firm shall be deemed to be a separate set of creditors, and to be on the same footing as the separate creditors of any individual member of the firm. And when any surplus shall arise upon the administration of the assets of such separate or independent firm, the same shall be carried over to the separate estates of the partners in such separate and independent firm according to their respective rights therein.